II 

Calendar No. 184 

111TH CONGRESS 

1ST SESSION S. 1796 

[Report No. 111–89] 

To provide affordable, quality health care for all Americans and reduce 

the growth in health care spending, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 19, 2009 

Mr. BAUCUS, from the Committee on Finance reported the following original 

bill; which was read twice and placed on the calendar 

A BILL 

To provide affordable, quality health care for all Americans 

and reduce the growth in health care spending, and 

for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘America’s Healthy Future Act of 2009’’. 

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

7 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—HEALTH CARE COVERAGE 

Subtitle A—Insurance Market Reforms 

Sec. 1001. Insurance market reforms in the individual and small group markets. 

‘‘TITLE XXII—HEALTH INSURANCE COVERAGE 

‘‘Sec. 2200. Ensuring essential and affordable health benefits coverage for 

all Americans. 

‘‘PART A—INSURANCE REFORMS

‘‘SUBPART 1—REQUIREMENTS IN INDIVIDUAL AND SMALL GROUP MARKETS

‘‘Sec. 2201. General requirements and definitions. 

‘‘Sec. 2202. Prohibition on preexisting condition exclusions. 

‘‘Sec. 2203. Guaranteed issue and renewal for insured plans. 

‘‘Sec. 2204. Premium rating rules. 

‘‘Sec. 2205. Use of uniform outline of coverage documents. 

‘‘SUBPART 2—REFORMS RELATING TO ALLOCATION OF RISKS

‘‘Sec. 2211. Rating areas; pooling of risks; phase in of rating rules in 

small group markets. 

‘‘Sec. 2212. Risk adjustment. 

‘‘Sec. 2213. Establishment of transitional reinsurance program for individual markets in each State. 

‘‘Sec. 2214. Establishment of risk corridors for plans in individual and 

small group markets. 

‘‘Sec. 2215. Temporary high risk pools for individuals with preexisting 

conditions. 

‘‘Sec. 2216. Reinsurance for retirees covered by employer-based plans. 

‘‘SUBPART 3—PRESERVATION OF RIGHT TO MAINTAIN EXISTING COVERAGE

‘‘Sec. 2221. Grandfathered health benefits plans. 

‘‘SUBPART 4—CONTINUED ROLE OF STATES

‘‘Sec. 2225. Continued State enforcement of insurance regulations. 

‘‘Sec. 2226. Waiver of health insurance reform requirements. 

‘‘Sec. 2227. Provisions relating to offering of plans in more than one 

State. 

‘‘Sec. 2228. State flexibility to establish basic health programs for low-income individuals not eligible for Medicaid. 

‘‘SUBPART 5—OTHER DEFINITIONS AND RULES

‘‘Sec. 2230. Other definitions and rules. 

Subtitle B—Exchanges and Consumer Assistance 

Sec. 1101. Establishment of qualified health benefits plan exchanges. 

‘‘PART B—EXCHANGE AND CONSUMER ASSISTANCE


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‘‘SUBPART 1—INDIVIDUALS AND SMALL EMPLOYERS OFFERED AFFORDABLE

CHOICES

‘‘Sec. 2231. Rights and responsibilities regarding choice of coverage 

through exchange. 

‘‘Sec. 2232. Qualified individuals and small employers; access limited to 

citizens and lawful residents. 

‘‘SUBPART 2—ESTABLISHMENT OF EXCHANGES

‘‘Sec. 2235. Establishment of exchanges by States. 

‘‘Sec. 2236. Functions performed by Secretary, States, and exchanges. 

‘‘Sec. 2237. Duties of the Secretary to facilitate exchanges. 

‘‘Sec. 2238. Procedures for determining eligibility for exchange participation, premium credits and cost-sharing subsidies, and individual responsibility exemptions. 

‘‘Sec. 2239. Streamlining of procedures for enrollment through an exchange and State Medicaid, CHIP, and health subsidy 

programs. 

Sec. 1102. Encouraging meaningful use of electronic health records. 

Subtitle C—Making Coverage Affordable 

PART I—ESSENTIAL BENEFITS COVERAGE

Sec. 1201. Provisions to ensure coverage of essential benefits. 

‘‘PART C—MAKING COVERAGE AFFORDABLE

‘‘SUBPART 1—ESSENTIAL BENEFITS COVERAGE

‘‘Sec. 2241. Requirements for qualified health benefits plan. 

‘‘Sec. 2242. Essential benefits package defined. 

‘‘Sec. 2243. Levels of coverage. 

‘‘Sec. 2244. Application of certain rules to plans in group markets. 

‘‘Sec. 2245. Special rules relating to coverage of abortion services. 

Sec. 1202. Application of State and Federal laws regarding abortion. 

Sec. 1203. Application of emergency services laws. 

PART II—PREMIUM CREDITS, COST-SHARING SUBSIDIES, AND SMALL

BUSINESS CREDITS

SUBPART A—PREMIUM CREDITS AND COST-SHARING SUBSIDIES

Sec. 1205. Refundable credit providing premium assistance for coverage under 

a qualified health benefits plan. 

‘‘Sec. 36B. Refundable credit for coverage under a qualified health benefits 

plan. 

Sec. 1206. Cost-sharing subsidies and advance payments of premium credits 

and cost-sharing subsidies. 

‘‘SUBPART 2—PREMIUM CREDITS AND COST-SHARING SUBSIDIES

‘‘Sec. 2246. Premium credits. 

‘‘Sec. 2247. Cost-sharing subsidies for individuals enrolling in qualified 

health benefit plans. 

‘‘Sec. 2248. Advance determination and payment of premium credits and 

cost-sharing subsidies. 


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Sec. 1207. Disclosures to carry out eligibility requirements for certain programs. 

Sec. 1208. Premium credit and subsidy refunds and payments disregarded for 

Federal and Federally-assisted programs. 

Sec. 1209. Fail-safe mechanism to prevent increase in Federal budget deficit. 

SUBPART B—CREDIT FOR SMALL EMPLOYERS

Sec. 1221. Credit for employee health insurance expenses of small businesses. 

‘‘Sec. 45R. Employee health insurance expenses of small employers. 

Subtitle D—Shared Responsibility 

PART I—INDIVIDUAL RESPONSIBILITY

Sec. 1301. Excise tax on individuals without essential health benefits coverage. 

‘‘CHAPTER 48—MAINTENANCE OF ESSENTIAL HEALTH BENEFITS COVERAGE

‘‘Sec. 5000A. Failure to maintain essential health benefits coverage. 

Sec. 1302. Reporting of health insurance coverage. 

‘‘SUBPART D—INFORMATION REGARDING HEALTH INSURANCE COVERAGE

‘‘Sec. 6055. Reporting of health insurance coverage. 

PART II—EMPLOYER RESPONSIBILITY

Sec. 1306. Employer shared responsibility requirement. 

‘‘Sec. 4980H. Employer responsibility to provide health coverage. 

Sec. 1307. Reporting of employer health insurance coverage. 

‘‘Sec. 6056. Large employers required to report on health insurance coverage. 

Subtitle E—Federal Program for Health Care Cooperatives 

Sec. 1401. Establishment of Federal program for health care cooperatives. 

‘‘PART D—FEDERAL PROGRAM FOR HEALTH CARE COOPERATIVES

‘‘Sec. 2251. Federal program to assist establishment and operation of nonprofit, member-run health insurance issuers. 

Subtitle F—Transparency and Accountability 

Sec. 1501. Provisions ensuring transparency and accountability. 

‘‘Sec. 2229. Requirements relating to transparency and accountability. 

Sec. 1502. Reporting on utilization of premium dollars and standard hospital 

charges. 

Sec. 1503. Development and utilization of uniform outline of coverage documents. 

Sec. 1504. Development of standard definitions, personal scenarios, and annual 

personalized statements. 

Subtitle G—Role of Public Programs 

PART I—MEDICAID COVERAGE FOR THE LOWEST INCOME POPULATIONS

Sec. 1601. Medicaid coverage for the lowest income populations. 


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Sec. 1602. Income eligibility for nonelderly determined using modified gross income. 

Sec. 1603. Requirement to offer premium assistance for employer-sponsored insurance. 

Sec. 1604. Payments to territories. 

Sec. 1605. Medicaid Improvement Fund rescission. 

PART II—CHILDREN’S HEALTH INSURANCE PROGRAM

Sec. 1611. Additional federal financial participation for CHIP. 

Sec. 1612. Technical corrections. 

PART III—ENROLLMENT SIMPLIFICATION

Sec. 1621. Enrollment Simplification and coordination with State health insurance exchanges. 

Sec. 1622. Permitting hospitals to make presumptive eligibility determinations 

for all Medicaid eligible populations. 

Sec. 1623. Promoting transparency in the development, implementation, and 

evaluation of Medicaid and CHIP waivers and section 1937 

State plan amendments. 

Sec. 1624. Standards and best practices to improve enrollment of vulnerable 

and underserved populations. 

PART IV—MEDICAID SERVICES

Sec. 1631. Coverage for freestanding birth center services. 

Sec. 1632. Concurrent care for children. 

Sec. 1633. Funding to expand State Aging and Disability Resource Centers. 

Sec. 1634. Community First Choice Option. 

Sec. 1635. Protection for recipients of home and community-based services 

against spousal impoverishment. 

Sec. 1636. Incentives for States to offer home and community-based services as 

a long-term care alternative to nursing homes. 

Sec. 1636A. Removal of barriers to providing home and community-based services. 

Sec. 1637. Money Follows the Person Rebalancing Demonstration. 

Sec. 1638. Clarification of definition of medical assistance. 

Sec. 1639. State eligibility option for family planning services. 

Sec. 1640. Grants for school-based health centers. 

Sec. 1641. Therapeutic foster care. 

Sec. 1642. Sense of the Senate regarding long-term care. 

PART V—MEDICAID PRESCRIPTION DRUG COVERAGE

Sec. 1651. Prescription drug rebates. 

Sec. 1652. Elimination of exclusion of coverage of certain drugs. 

Sec. 1653. Providing adequate pharmacy reimbursement. 

Sec. 1654. Study of barriers to appropriate utilization of generic medicine in 

federal health care programs. 

PART VI—MEDICAID DISPROPORTIONATE SHARE HOSPITAL (DSH) 

PAYMENTS

Sec. 1655. Disproportionate share hospital payments. 

PART VII—DUAL ELIGIBLES


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Sec. 1661. 5-year period for demonstration projects. 

Sec. 1662. Providing Federal coverage and payment coordination for low-income Medicare beneficiaries. 

PART VIII—MEDICAID QUALITY

Sec. 1671. Adult health quality measures. 

Sec. 1672. Payment Adjustment for Health Care-Acquired Conditions. 

Sec. 1673. Demonstration project to evaluate integrated care around a hospitalization. 

Sec. 1674. Medicaid Global Payment System Demonstration Project. 

Sec. 1675. Pediatric Accountable Care Organization Demonstration Project. 

Sec. 1676. Medicaid emergency psychiatric demonstration project. 

PART IX—IMPROVEMENTS TO THE MEDICAID AND CHIP PAYMENT AND

ACCESS COMMISSION (MACPAC) 

Sec. 1681. MACPAC assessment of policies affecting all Medicaid beneficiaries. 

PART X—AMERICAN INDIANS AND ALASKA NATIVES

Sec. 1691. Special rules relating to Indians. 

Sec. 1692. Elimination of sunset for reimbursement for all medicare part B 

services furnished by certain indian hospitals and clinics. 

Subtitle H—Addressing Health Disparities 

Sec. 1701. Standardized collection of data. 

Sec. 1702. Required collection of data. 

Sec. 1703. Data sharing and protection. 

Sec. 1704. Inclusion of information about the importance of having a health 

care power of attorney in transition planning for children aging 

out of foster care and independent living programs. 

Subtitle I—Maternal and Child Health Services 

Sec. 1801. Maternal, infant, and early childhood home visiting programs. 

Sec. 1802. Support, education, and research for postpartum depression. 

Sec. 1803. Personal responsibility education for adulthood training. 

Sec. 1804. Restoration of funding for abstinence education. 

Subtitle J—Programs of Health Promotion and Disease Prevention 

Sec. 1901. Programs of health promotion and disease prevention. 

Subtitle K—Elder Justice Act 

Sec. 1911. Short title of subtitle. 

Sec. 1912. Definitions. 

Sec. 1913. Elder Justice. 

Subtitle L—Provisions of General Application 

Sec. 1921. Protecting Americans and ensuring taxpayer funds in government 

health care plans do not support or fund physician-assisted suicide; prohibition against discrimination on assisted suicide. 

Sec. 1922. Protection of access to quality health care through the Department 

of Veterans Affairs and the Department of Defense. 

Sec. 1923. Continued application of antitrust laws. 


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TITLE II—PROMOTING DISEASE PREVENTION AND WELLNESS 

Subtitle A—Medicare 

Sec. 2001. Coverage of annual wellness visit providing a personalized prevention plan. 

Sec. 2002. Removal of barriers to preventive services. 

Sec. 2003. Evidence-based coverage of preventive services. 

Sec. 2004. GAO study and report on medicare beneficiary access to vaccines. 

Sec. 2005. Incentives for healthy lifestyles. 

Subtitle B—Medicaid 

Sec. 2101. Improving access to preventive services for eligible adults. 

Sec. 2102. Coverage of comprehensive tobacco cessation services for pregnant 

women. 

Sec. 2103. Incentives for healthy lifestyles. 

Sec. 2104. State option to provide health homes for enrollees with chronic conditions. 

Sec. 2105. Funding for Childhood Obesity Demonstration Project. 

Sec. 2106. Public awareness of preventive and obesity-related services. 

TITLE III—IMPROVING THE QUALITY AND EFFICIENCY OF 

HEALTH CARE 

Subtitle A—Transforming the Health Care Delivery System 

PART I—LINKING PAYMENT TO QUALITY OUTCOMES UNDER THE

MEDICARE PROGRAM

Sec. 3001. Hospital Value-Based purchasing program. 

Sec. 3002. Improvements to the physician quality reporting system. 

Sec. 3003. Improvements to the physician feedback program. 

Sec. 3004. Quality reporting for long-term care hospitals, inpatient rehabilitation hospitals, and hospice programs. 

Sec. 3005. Quality reporting for PPS-exempt cancer hospitals. 

Sec. 3006. Plans for a Value-Based purchasing program for skilled nursing facilities and home health agencies. 

Sec. 3007. Value-based payment modifier under the physician fee schedule. 

Sec. 3008. Payment adjustment for conditions acquired in hospitals. 

PART II—STRENGTHENING THE QUALITY INFRASTRUCTURE

Sec. 3011. National strategy. 

Sec. 3012. Interagency Working Group on Health Care Quality. 

Sec. 3013. Quality measure development. 

Sec. 3014. Quality measure endorsement. 

PART III—ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS

Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation 

within CMS. 

Sec. 3022. Medicare shared savings program. 

Sec. 3023. National pilot program on payment bundling. 

Sec. 3024. Independence at home pilot program. 

Sec. 3025. Hospital readmissions reduction program. 

Sec. 3026. Community-Based Care Transitions Program. 

Sec. 3027. Extension of gainsharing demonstration. 


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PART IV—STRENGTHENING PRIMARY CARE AND OTHER WORKFORCE

IMPROVEMENTS

Sec. 3031. Expanding access to primary care services and general surgery services. 

Sec. 3031A. Medicare Federally qualified health center improvements. 

Sec. 3032. Distribution of additional residency positions. 

Sec. 3033. Counting resident time in outpatient settings and allowing flexibility 

for jointly operated residency training programs. 

Sec. 3034. Rules for counting resident time for didactic and scholarly activities 

and other activities. 

Sec. 3035. Preservation of resident cap positions from closed and acquired hospitals. 

Sec. 3036. Workforce Advisory Committee. 

Sec. 3037. Demonstration projects To address health professions workforce 

needs; extension of family-to-family health information centers. 

Sec. 3038. Increasing teaching capacity. 

Sec. 3039. Graduate nurse education demonstration program. 

PART V—HEALTH INFORMATION TECHNOLOGY

Sec. 3041. Free clinics and certified EHR technology. 

Subtitle B—Improving Medicare for Patients and Providers 

PART I—ENSURING BENEFICIARY ACCESS TO PHYSICIAN CARE AND OTHER

SERVICES

Sec. 3101. Increase in the physician payment update. 

Sec. 3102. Extension of the work geographic index floor and revisions to the 

practice expense geographic adjustment under the Medicare 

physician fee schedule. 

Sec. 3103. Extension of exceptions process for Medicare therapy caps. 

Sec. 3104. Extension of payment for technical component of certain physician 

pathology services. 

Sec. 3105. Extension of ambulance add-ons. 

Sec. 3106. Extension of certain payment rules for long-term care hospital services and of moratorium on the establishment of certain hospitals and facilities. 

Sec. 3107. Extension of physician fee schedule mental health add-on. 

Sec. 3108. Permitting physician assistants to order post-Hospital extended care 

services and to provide for recognition of attending physician 

assistants as attending physicians to serve hospice patients. 

Sec. 3109. Recognition of certified diabetes educators as certified providers for 

purposes of Medicare diabetes outpatient self-management 

training services. 

Sec. 3110. Exemption of certain pharmacies from accreditation requirements. 

Sec. 3111. Part B special enrollment period for disabled TRICARE beneficiaries. 

Sec. 3112. Payment for bone density tests. 

Sec. 3113. Revision to the Medicare Improvement Fund. 

Sec. 3114. Treatment of certain complex diagnostic laboratory tests. 

Sec. 3115. Improved access for certified-midwife services. 

Sec. 3116. Working Group on Access to Emergency Medical Care. 

PART II—RURAL PROTECTIONS


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Sec. 3121. Extension of outpatient hold harmless provision. 

Sec. 3122. Extension of Medicare reasonable costs payments for certain clinical 

diagnostic laboratory tests furnished to hospital patients in certain rural areas. 

Sec. 3123. Extension of the Rural Community Hospital Demonstration Program. 

Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program. 

Sec. 3125. Temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals. 

Sec. 3126. Improvements to the demonstration project on community health integration models in certain rural counties. 

Sec. 3127. MedPAC study on adequacy of Medicare payments for health care 

providers serving in rural areas. 

Sec. 3128. Technical correction related to critical access hospital services. 

Sec. 3129. Extension of and revisions to Medicare rural hospital flexibility program. 

PART III—IMPROVING PAYMENT ACCURACY

Sec. 3131. Payment adjustments for home health care. 

Sec. 3132. Hospice reform. 

Sec. 3133. Improvement to medicare disproportionate share hospital (DSH) 

payments. 

Sec. 3134. Misvalued codes under the physician fee schedule. 

Sec. 3135. Modification of equipment utilization factor for advanced imaging 

services. 

Sec. 3136. Revision of payment for power-driven wheelchairs. 

Sec. 3137. Hospital wage index improvement. 

Sec. 3138. Treatment of certain cancer hospitals. 

Sec. 3139. Payment for biosimilar biological products. 

Sec. 3140. Public meeting and report on payment systems for new clinical laboratory diagnostic tests. 

Sec. 3141. Medicare hospice concurrent care demonstration program. 

Sec. 3142. Application of budget neutrality on a national basis in the calculation of the Medicare hospital wage index floor for each allurban and rural state. 

Sec. 3143. HHS study on urban Medicare-dependent hospitals. 

Subtitle C—Provisions Relating to Part C 

Sec. 3201. Medicare Advantage payment. 

Sec. 3202. Benefit protection and simplification. 

Sec. 3203. Application of coding intensity adjustment during MA payment 

transition. 

Sec. 3204. Simplification of annual beneficiary election periods. 

Sec. 3205. Extension for specialized MA plans for special needs individuals. 

Sec. 3206. Extension of reasonable cost contracts. 

Sec. 3207. Technical correction to MA private fee-for-service plans. 

Sec. 3208. Making senior housing facility demonstration permanent. 

Sec. 3209. Development of new standards for certain Medigap plans. 

Subtitle D—Medicare Part D Improvements for Prescription Drug Plans and 

MA–PD Plans 

Sec. 3301. Medicare prescription drug discount program for brand-Name 

drugs. 


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Sec. 3302. Improvement in determination of Medicare part D low-income 

benchmark premium. 

Sec. 3303. Voluntary de minimus policy for subsidy eligible individuals under 

prescription drug plans and MA–PD plans. 

Sec. 3304. Special rule for widows and widowers regarding eligibility for lowincome assistance. 

Sec. 3305. Improved information for subsidy eligible individuals reassigned to 

prescription drug plans and MA–PD plans. 

Sec. 3306. Funding outreach and assistance for low-income programs. 

Sec. 3307. Improving formulary requirements for prescription drug plans and 

MA–PD plans with respect to certain categories or classes of 

drugs. 

Sec. 3308. Reducing part D premium subsidy for high-income beneficiaries. 

Sec. 3309. Simplification of plan information. 

Sec. 3310. Limitation on removal or change of coverage of covered part D 

drugs under a formulary under a prescription drug plan or an 

MA–PD plan. 

Sec. 3311. Elimination of cost sharing for certain dual eligible individuals. 

Sec. 3312. Reducing wasteful dispensing of outpatient prescription drugs in 

long-term care facilities under prescription drug plans and 

MA–PD plans. 

Sec. 3313. Improved Medicare prescription drug plan and MA–PD plan complaint system. 

Sec. 3314. Uniform exceptions and appeals process for prescription drug plans 

and MA–PD plans. 

Sec. 3315. Office of the Inspector General studies and reports. 

Sec. 3316. HHS study and annual reports on coverage for dual eligibles. 

Sec. 3317. Including costs incurred by AIDS drug assistance programs and Indian Health Service in providing prescription drugs toward the 

annual out-of-pocket threshold under part D. 

Subtitle E—Ensuring Medicare Sustainability 

Sec. 3401. Revision of certain market basket updates and incorporation of productivity improvements into market basket updates that do not 

already incorporate such improvements. 

Sec. 3402. Temporary adjustment to the calculation of part B premiums. 

Sec. 3403. Medicare Commission. 

Sec. 3404. Ensuring medicare savings are kept in the medicare program. 

Subtitle F—Comparative Effectiveness Research 

Sec. 3501. Comparative effectiveness research. 

Sec. 3502. Coordination with Federal coordinating council for comparative effectiveness research. 

Sec. 3503. GAO report on national coverage determinations process. 

Subtitle G—Administrative Simplification 

Sec. 3601. Administrative Simplification. 

Subtitle H—Sense of the Senate Regarding Medical Malpractice 

Sec. 3701. Sense of the Senate regarding medical malpractice. 

TITLE IV—TRANSPARENCY AND PROGRAM INTEGRITY 


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Subtitle A—Limitation on Medicare Exception to the Prohibition on Certain 

Physician Referrals for Hospitals 

Sec. 4001. Limitation on Medicare exception to the prohibition on certain physician referrals for hospitals. 

Subtitle B—Physician Ownership and Other Transparency 

Sec. 4101. Transparency reports and reporting of physician ownership or investment interests. 

Sec. 4102. Disclosure requirements for in-office ancillary services exception to 

the prohibition on physician self-referral for certain imaging 

services. 

Sec. 4103. Prescription drug sample transparency. 

Subtitle C—Nursing Home Transparency and Improvement 

PART I—IMPROVING TRANSPARENCY OF INFORMATION

Sec. 4201. Required disclosure of ownership and additional disclosable parties 

information. 

Sec. 4202. Accountability requirements for skilled nursing facilities and nursing 

facilities. 

Sec. 4203. Nursing home compare Medicare website. 

Sec. 4204. Reporting of expenditures. 

Sec. 4205. Standardized complaint form. 

Sec. 4206. Ensuring staffing accountability. 

Sec. 4207. GAO study and report on Five-Star Quality Rating System. 

PART II—TARGETING ENFORCEMENT

Sec. 4211. Civil money penalties. 

Sec. 4212. National independent monitor pilot program. 

Sec. 4213. Notification of facility closure. 

Sec. 4214. National demonstration projects on culture change and use of information technology in nursing homes. 

PART III—IMPROVING STAFF TRAINING

Sec. 4221. Dementia and abuse prevention training. 

Subtitle D—Nationwide Program for National and State Background Checks 

on Direct Patient Access Employees of Long-term Care Facilities and Providers 

Sec. 4301. Nationwide program for National and State background checks on 

direct patient access employees of long-term care facilities and 

providers. 

Subtitle E—Pharmacy Benefit Managers 

Sec. 4401. Pharmacy benefit managers transparency requirements. 

TITLE V—FRAUD, WASTE, AND ABUSE 

Subtitle A—Medicare and Medicaid 

Sec. 5001. Provider screening and other enrollment requirements under Medicare and Medicaid. 


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Sec. 5002. Enhanced Medicare and Medicaid program integrity provisions. 

Sec. 5003. Elimination of duplication between the Healthcare Integrity and 

Protection Data Bank and the National Practitioner Data 

Bank. 

Sec. 5004. Maximum period for submission of Medicare claims reduced to not 

more than 12 months. 

Sec. 5005. Physicians who order items or services required to be Medicare enrolled physicians or eligible professionals. 

Sec. 5006. Requirement for physicians to provide documentation on referrals to 

programs at high risk of waste and abuse. 

Sec. 5007. Face to face encounter with patient required before physicians may 

certify eligibility for home health services or durable medical 

equipment under Medicare. 

Sec. 5008. Enhanced penalties. 

Sec. 5009. Medicare self-referral disclosure protocol. 

Sec. 5010. Adjustments to the Medicare durable medical equipment, prosthetics, orthotics, and supplies competitive acquisition program. 

Sec. 5011. Expansion of the Recovery Audit Contractor (RAC) program. 

Subtitle B—Additional Medicaid Provisions 

Sec. 5101. Termination of provider participation under Medicaid if terminated 

under Medicare or other State plan. 

Sec. 5102. Medicaid exclusion from participation relating to certain ownership, 

control, and management affiliations. 

Sec. 5103. Billing agents, clearinghouses, or other alternate payees required to 

register under Medicaid. 

Sec. 5104. Requirement to report expanded set of data elements under MMIS 

to detect fraud and abuse. 

Sec. 5105. Prohibition on payments to institutions or entities located outside of 

the United States. 

Sec. 5106. Overpayments. 

Sec. 5107. Enhanced funding for program integrity activities. 

Sec. 5108. Mandatory State use of national correct coding initiative. 

Sec. 5109. General effective date. 

TITLE VI—REVENUE PROVISIONS 

Subtitle A—Revenue Offset Provisions 

Sec. 6001. Excise tax on high cost employer-sponsored health coverage. 

Sec. 6002. Inclusion of cost of employer-sponsored health coverage on W–2. 

Sec. 6003. Distributions for medicine qualified only if for prescribed drug or insulin. 

Sec. 6004. Increase in additional tax on distributions from HSAs not used for 

qualified medical expenses. 

Sec. 6005. Limitation on health flexible spending arrangements under cafeteria 

plans. 

Sec. 6006. Expansion of information reporting requirements. 

Sec. 6007. Additional requirements for charitable hospitals. 

Sec. 6008. Imposition of annual fee on branded prescription pharmaceutical 

manufacturers and importers. 

Sec. 6009. Imposition of annual fee on medical device manufacturers and importers. 

Sec. 6010. Imposition of annual fee on health insurance providers. 

Sec. 6011. Study and report of effect on veterans health care. 


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Sec. 6012. Elimination of deduction for expenses allocable to Medicare Part D 

subsidy. 

Sec. 6013. Modification of itemized deduction for medical expenses. 

Sec. 6014. Limitation on excessive remuneration paid by certain health insurance providers. 

Subtitle B—Other Provisions 

Sec. 6021. Exclusion of health benefits provided by Indian tribal governments. 

Sec. 6022. Establishment of simple cafeteria plans for small businesses. 

Sec. 6023. Qualifying therapeutic discovery project credit. 

1 TITLE I—HEALTH CARE 

2 COVERAGE 

3 Subtitle A—Insurance Market 

4 Reforms 

5 SEC. 1001. INSURANCE MARKET REFORMS IN THE INDI6 VIDUAL AND SMALL GROUP MARKETS. 

7 The Social Security Act (42 U.S.C. 301 et seq.) is 

8 amended by adding at the end the following: 

9 ‘‘TITLE XXII—HEALTH 

10 INSURANCE COVERAGE 

11 ‘‘SEC. 2200. ENSURING ESSENTIAL AND AFFORDABLE 

12 HEALTH BENEFITS COVERAGE FOR ALL 

13 AMERICANS. 

14 ‘‘It is the purpose of this title to ensure that all 

15 Americans have access to affordable and essential health 

16 benefits coverage— 

17 ‘‘(1) by requiring that all new health benefits 

18 plans offered to individuals and employees in the in19 dividual and small group markets be qualified health 

20 benefits plans that meet the insurance rating reVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 forms and essential health benefits coverage require2 ments established under parts A and C; 

3 ‘‘(2) by establishing State exchanges under part 

4 B that provide individuals and employees in the indi5 vidual and small group markets greater access to 

6 qualified health benefits plans and to information 

7 concerning these health plans; 

8 ‘‘(3) by making health benefits coverage more 

9 affordable by establishing premium credits and cost10 sharing subsidies under part C for individuals enroll11 ing in a health benefits plan through an exchange; 

12 and 

13 ‘‘(4) by establishing the CO-OP program under 

14 part D to encourage the establishment of nonprofit 

15 health care cooperatives. 

16 ‘‘PART A—INSURANCE REFORMS 

17 ‘‘Subpart 1—Requirements in Individual and Small 

18 Group Markets 

19 ‘‘SEC. 2201. GENERAL REQUIREMENTS AND DEFINITIONS. 

20 ‘‘(a) NEW PLANS MUST BE QUALIFIED HEALTH

21 BENEFITS PLANS.—Except as provided in subpart 3 (re22 lating to preservation of existing coverage), each State 

23 shall provide that each health benefits plan which is of24 fered in the individual or small group market within the 

25 State shall be a qualified health benefits plan. 


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1 ‘‘(b) QUALIFIED HEALTH BENEFITS PLAN.—For 

2 purposes of this title, a health benefits plan which is of3 fered in the individual or small group market shall be a 

4 qualified health benefits plan with respect to a State if— 

5 ‘‘(1) the plan has in effect a certification (which 

6 may include a seal or other indication of approval) 

7 issued or recognized by the State that such plan 

8 meets the applicable requirements of— 

9 ‘‘(A) this part (relating to requirements for 

10 insurance market reforms); and 

11 ‘‘(B) part C (relating to requirements to 

12 make health insurance affordable); and 

13 ‘‘(2) the offeror of the plan— 

14 ‘‘(A) is licensed by the State (and in good 

15 standing with the State) to offer a health bene16 fits plan in the State; and 

17 ‘‘(B) complies with such other require18 ments as the Secretary or the State may estab19 lish pursuant to this title for qualified health 

20 benefits plans. 

21 ‘‘(c) TERMS RELATING TO HEALTH BENEFITS

22 PLANS.—In this title: 

23 ‘‘(1) HEALTH BENEFITS PLAN.— 


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1 ‘‘(A) IN GENERAL.—The term ‘health ben2 efits plan’ means health insurance coverage and 

3 a group health plan. 

4 ‘‘(B) EXCEPTION FOR SELF-INSURED

5 PLANS AND MEWAS.—Except to the extent spe6 cifically provided by this title, the term ‘health 

7 benefits plan’ shall not include a group health 

8 plan or multiple employer welfare arrangement 

9 to the extent the plan is not subject to State in10 surance regulation under section 514 of the 

11 Employee Retirement Income Security Act of 

12 1974. 

13 ‘‘(2) HEALTH INSURANCE COVERAGE AND

14 ISSUER.—The terms ‘health insurance coverage’ and 

15 ‘health insurance issuer’ have the meanings given 

16 such terms by section 9832(b) of the Internal Rev17 enue Code of 1986. 

18 ‘‘(3) GROUP HEALTH PLAN.—The term ‘group 

19 health plan’ has the meaning given such term by 

20 section 5000(b) of such Code. 

21 ‘‘(4) HEALTH BENEFITS PLAN OFFEROR.—The 

22 terms ‘health benefits plan offeror’ and ‘offeror’ 

23 mean in the case of— 

24 ‘‘(A) health insurance coverage, the health 

25 insurance issuer offering the coverage; and 


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1 ‘‘(B) a group health plan— 

2 ‘‘(i) the plan sponsor; or 

3 ‘‘(ii) in the case of a plan maintained 

4 jointly by 1 or more employers and 1 or 

5 more employee organizations and with re6 spect to which an employer is the primary 

7 source of financing, such employer. 

8 ‘‘(d) DEFINITIONS RELATING TO MARKETS.—In this 

9 title: 

10 ‘‘(1) GROUP MARKET.—The term ‘group mar11 ket’ means the health insurance market under which 

12 individuals obtain health insurance coverage (directly 

13 or through any arrangement) on behalf of them14 selves (and their dependents) through a group health 

15 plan maintained by an employer. 

16 ‘‘(2) INDIVIDUAL MARKET.—The term ‘indi17 vidual market’ means the market for health insur18 ance coverage offered to individuals other than in 

19 connection with a group health plan. 

20 ‘‘(3) LARGE AND SMALL GROUP MARKETS.— 

21 The terms ‘large group market’ and ‘small group 

22 market’ mean the health insurance market under 

23 which individuals obtain health insurance coverage 

24 (directly or through any arrangement) on behalf of 

25 themselves (and their dependents) through a group 


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1 health plan maintained by a large employer (as de2 fined in section 2230(a)(1)) or by a small employer 

3 (as defined in section 2230(a)(2)), respectively. 

4 ‘‘SEC. 2202. PROHIBITION ON PREEXISTING CONDITION EX5 CLUSIONS. 

6 ‘‘(a) PROHIBITION.—A health benefits plan shall be 

7 treated as a qualified health benefits plan only if the plan 

8 does not— 

9 ‘‘(1) impose any preexisting condition exclusion 

10 with respect to the plan; or 

11 ‘‘(2) otherwise impose any limit or condition on 

12 the coverage under the plan with respect to an indi13 vidual or dependent of an individual based on any 

14 health status-related factors in relation to the indi15 vidual or dependent. 

16 ‘‘(b) PREEXISTING CONDITION EXCLUSION.—For 

17 purposes of this section, the term ‘preexisting condition 

18 exclusion’ means, with respect to coverage, a limitation or 

19 exclusion of benefits relating to a condition based on the 

20 fact that the condition was present before the date of en21 rollment for such coverage, whether or not any medical 

22 advice, diagnosis, care, or treatment was recommended or 

23 received before such date. 

24 ‘‘(c) HEALTH STATUS-RELATED FACTORS.—For 

25 purposes of this section, the term ‘health status-related 


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1 factors’ means health status, medical condition (including 

2 both physical and mental illnesses), claims experience, re3 ceipt of health care, medical history, genetic information, 

4 evidence of insurability (including conditions arising out 

5 of acts of domestic violence), and disability. 

6 ‘‘SEC. 2203. GUARANTEED ISSUE AND RENEWAL FOR IN7 SURED PLANS. 

8 ‘‘(a) IN GENERAL.—Except as provided in this sec9 tion, a health benefits plan shall be treated as a qualified 

10 health benefits plan only if the offeror of the plan— 

11 ‘‘(1) in the case of a plan offered— 

12 ‘‘(A) in the individual market in a State, 

13 must accept every individual that applies for en14 rollment in the plan; 

15 ‘‘(B) in the small group market in a State, 

16 must accept— 

17 ‘‘(i) every small employer in the State 

18 that applies for enrollment of its employees 

19 under the plan; and 

20 ‘‘(ii) every individual who is eligible to 

21 enroll in the plan by reason of a relation22 ship to the employer as is determined— 

23 ‘‘(I) in accordance with the terms 

24 of such plan; 


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1 ‘‘(II) as provided by the offeror 

2 under rules of the offeror that are 

3 uniformly applicable to small employ4 ers in the small group market within 

5 a State; and 

6 ‘‘(III) in accordance with all ap7 plicable State laws governing the of8 feror and the small group market; and 

9 ‘‘(2) must renew or continue in force coverage 

10 under the plan at the option of the individual or 

11 small employer, as applicable. 

12 An offeror of a plan shall not be treated as meeting the 

13 requirements of this subsection unless the plan also ac14 cepts, renews, or continues in force coverage of an indi15 vidual who is eligible for enrollment in the plan by reason 

16 of their relationship to the named insured under the plan. 

17 ‘‘(b) SPECIAL RULES FOR GUARANTEED ISSUE.— 

18 ‘‘(1) ENROLLMENT.—Each offeror of a health 

19 benefits plan shall establish annual and special en20 rollment periods meeting the requirements of section 

21 2236(d)(2) and may restrict enrollment described in 

22 subsection (a)(1) to such enrollment periods. 

23 ‘‘(2) CAPACITY LIMITS.—For purposes of apply24 ing subsection (a)(1), if, as determined under regu25 lations prescribed by the Secretary, a plan has a caVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 pacity limit, the plan may limit enrollment to that 

2 capacity limit but only if the plan selects individuals 

3 for enrollment on the basis of the order in which the 

4 individuals applied for enrollment and in a manner 

5 that does not discriminate in any manner prohibited 

6 under section 2202. 

7 ‘‘(c) GUARANTEED RENEWABILITY.—For purposes 

8 of applying subsection (a)(2)— 

9 ‘‘(1) rescissions of coverage shall be treated in 

10 the same manner as non-renewals of coverage; and 

11 ‘‘(2) the premium rate at the time of renewal 

12 shall be determined using only the same categories 

13 of rate adjustment factors that were used at issue. 

14 The Secretary may prescribe rules for the application of 

15 paragraph (2) during any period during which the reforms 

16 under this subpart are being phased in by a State. 

17 ‘‘SEC. 2204. PREMIUM RATING RULES. 

18 ‘‘(a) IN GENERAL.—A health benefits plan shall be 

19 treated as a qualified health benefits plan only if the pre20 mium rate charged for any benefit level of the plan may 

21 not vary except as provided in this section. 

22 ‘‘(b) LIMITS BASED ON SPECIFIC RATIOS.— 

23 ‘‘(1) IN GENERAL.—In the case of a health ben24 efits plan offered in a rating area, the premium rate 


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1 charged under the plan may vary only as provided 

2 in paragraphs (2) and (3). 

3 ‘‘(2) BY FAMILY ENROLLMENT.—The premium 

4 rate may vary by family enrollment (such as vari5 ations within categories and compositions of fami6 lies) so long as the ratio of the premium for the fol7 lowing types of enrollment to the premium for indi8 vidual enrollment does not exceed the following ra9 tios: 

10 ‘‘(A) Individual, 1 to 1. 

11 ‘‘(B) Adult with child, 1.8 to 1. 

12 ‘‘(C) Two adults, 2 to 1. 

13 ‘‘(D) Family, 3 to 1. 

14 ‘‘(3) AGE AND TOBACCO USE.—Within any fam15 ily enrollment category, the portion of the premium 

16 attributable to each individual covered by the health 

17 benefits plan in that category may vary as follows: 

18 ‘‘(A) LIMITED AGE VARIATION PER19 MITTED.—By age (within the standard age 

20 bands established under subsection (c)) so long 

21 as the ratio of the highest such premium to the 

22 lowest such premium does not exceed the ratio 

23 of 4 to 1. 

24 ‘‘(B) TOBACCO USE.—By tobacco use so 

25 long as the ratio of the highest such premium 


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1 to the lowest such premium does not exceed the 

2 ratio of 1.5 to 1. 

3 ‘‘(c) STANDARD AGE CATEGORIES.—The Secretary 

4 shall establish standard age bands between which pre5 mium rates may vary as provided in subsection (b)(3)(A). 

6 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec7 tion shall be construed to allow a health benefits plan to 

8 vary a premium rate on the basis of health status-related 

9 factors, gender, class of business, claims experience, or 

10 any other factor not described in subsection (b). 

11 ‘‘SEC. 2205. USE OF UNIFORM OUTLINE OF COVERAGE DOC12 UMENTS. 

13 ‘‘A health benefits plan shall provide an outline of 

14 the plan’s health insurance coverage meeting the stand15 ards of uniformity adopted by the Secretary under section 

16 1503 of the America’s Healthy Future Act of 2009 to— 

17 ‘‘(1) an applicant at the time of application; 

18 ‘‘(2) an enrollee at the time of enrollment; and 

19 ‘‘(3) a policyholder or certificate holder of the 

20 plan at the time the policy is issued or the certificate 

21 is delivered. 


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1 ‘‘Subpart 2—Reforms Relating to Allocation of Risks 

2 ‘‘SEC. 2211. RATING AREAS; POOLING OF RISKS; PHASE IN 

3 OF RATING RULES IN SMALL GROUP MAR4 KETS. 

5 ‘‘(a) RATING AREAS.— 

6 ‘‘(1) IN GENERAL.—Each State shall establish 

7 1 or more rating areas within that State for pur8 poses of applying the requirements of this title. 

9 ‘‘(2) SECRETARIAL REVIEW.—The Secretary 

10 shall review the rating areas established by each 

11 State under subsection (a) to ensure the adequacy of 

12 such areas for purposes of carrying out the require13 ments of this title. If the Secretary determines a 

14 State’s rating areas are not so adequate, the Sec15 retary may establish rating areas for that State. 

16 ‘‘(b) SINGLE RISK POOL.— 

17 ‘‘(1) IN GENERAL.—For purposes of applying 

18 the insurance reform requirements under subpart 

19 1— 

20 ‘‘(A) INDIVIDUAL MARKET.—The offeror of 

21 an insured qualified health benefits plan offered 

22 in the individual market in an area covered by 

23 an exchange shall consider all enrollees in the 

24 plan, including individuals who do not purchase 

25 such a plan through an exchange, to be mem26 bers of a single risk pool. 


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1 ‘‘(B) SMALL GROUP MARKET.—The offeror 

2 of a qualified health benefits plan offered in the 

3 small group market in an area covered by an 

4 exchange shall consider all enrollees in the plan, 

5 including individuals who do not purchase such 

6 a plan through an exchange, to be members of 

7 a single risk pool. 

8 ‘‘(2) STATE ELECTION.—A State may elect to 

9 combine the individual and small group markets 

10 within the State for purposes of applying this sub11 section. 

12 ‘‘(c) PHASE IN OF INSURANCE REFORM RULES IN

13 SMALL GROUP MARKET.—Upon request to, and approval 

14 by, the Secretary, each State shall phase in the application 

15 to the small group market of the insurance reform require16 ments under subpart 1 over a consecutive period of years 

17 (not greater than 5) beginning July 1, 2013. 

18 ‘‘SEC. 2212. RISK ADJUSTMENT. 

19 ‘‘(a) IN GENERAL.—Each State shall adopt a risk ad20 justment model described in subsection (b) to implement 

21 procedures for the application of risk adjustment among 

22 qualified health benefit plans and grandfathered health 

23 benefits plans offered in both the individual and small 

24 group market. Such procedures shall apply to such qualiVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 fied health benefit plans whether or not purchased through 

2 an exchange. 

3 ‘‘(b) RISK ADJUSTMENT MODELS.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall estab5 lish 1 or more risk adjustment models for proper ad6 justments of premium amounts payable among 

7 offerors of qualified health benefits plans that take 

8 into account (in a manner specified by the Sec9 retary) the differences in the risk characteristics of 

10 individuals and employers enrolled under the dif11 ferent plans so as to minimize the impact of adverse 

12 selection of enrollees among the plans. 

13 ‘‘(2) STATE OPTION.—A State may— 

14 ‘‘(A) adopt a risk adjustment model estab15 lished under paragraph (1); or 

16 ‘‘(B) establish its own risk adjustment 

17 model for purposes of subsection (a), but only 

18 if the State establishes to the satisfaction of the 

19 Secretary that such model will produce results 

20 substantially similar to the results of risk ad21 justment models established under paragraph 

22 (1) and will not increase costs to the Federal 

23 government. 

24 ‘‘(3) OPERATION OF RISK ADJUSTMENT SYS25 TEM.—A State may select an entity certified under 


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1 subsection (c) to implement and operate its risk ad2 justment model under this section. 

3 ‘‘(c) CERTIFICATION OF ENTITIES CONDUCTING

4 RISK ADJUSTMENT.—The Secretary shall certify entities 

5 which the Secretary determines have the required exper6 tise to implement the risk adjustment models adopted or 

7 established under subsection (b). The Secretary may not 

8 certify any entity which is a health benefits plan offeror 

9 or any entity owned or operated by such an offeror. 

10 ‘‘SEC. 2213. ESTABLISHMENT OF TRANSITIONAL REINSUR11 ANCE PROGRAM FOR INDIVIDUAL MARKETS 

12 IN EACH STATE. 

13 ‘‘(a) IN GENERAL.—Each State shall, not later than 

14 July 1, 2013— 

15 ‘‘(1) include in the Model Regulation, Federal 

16 standard, or State law or regulation the State 

17 adopts and has in effect under section 2225(a)(2) 

18 the provisions described in subsection (b); and 

19 ‘‘(2) establish (or enter into a contract with) 1 

20 or more applicable reinsurance entities to carry out 

21 the reinsurance program under this section. 

22 ‘‘(b) MODEL REGULATION.— 

23 ‘‘(1) IN GENERAL.—In establishing the Model 

24 Regulation under section 2225 to carry out this 

25 part, the Secretary shall request the National AssoVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ciation of Insurance Commissioners (the ‘NAIC’) to 

2 include provisions that enable States to establish 

3 and maintain a program under which— 

4 ‘‘(A) the offerors of health benefits plans 

5 that are offered in the individual market are re6 quired to make payments to an applicable rein7 surance entity for any plan year beginning in 

8 the 36-month period beginning July 1, 2013; 

9 and 

10 ‘‘(B) the applicable reinsurance entity col11 lects payments under subparagraph (A) and 

12 uses amounts so collected to make reinsurance 

13 payments to offerors of health benefits plans 

14 described in subparagraph (A) that cover high 

15 risk individuals for any plan year beginning in 

16 such 36-month period. 

17 If the NAIC does not include such provisions as part 

18 of the Model Regulation , the Secretary shall include 

19 such provisions in a Federal standard under section 

20 2225(a)(1)(B). 

21 ‘‘(2) HIGH-RISK INDIVIDUAL; PAYMENT

22 AMOUNTS.—The following shall be included in the 

23 provisions under paragraph (1): 

24 ‘‘(A) DETERMINATION OF HIGH-RISK INDI25 VIDUALS.—The method by which individuals 


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1 will be identified as high risk individuals for 

2 purposes of the reinsurance program estab3 lished under this section. Such method shall 

4 provide for identification of individuals as high5 risk individuals on the basis of— 

6 ‘‘(i) a list of at least 50 but not more 

7 than 100 medical conditions that are iden8 tified as high-risk conditions and that may 

9 be based on the identification of diagnostic 

10 and procedure codes that are indicative of 

11 individuals with pre-existing, high-risk con12 ditions; or 

13 ‘‘(ii) any other comparable objective 

14 method of identification recommended by 

15 the American Academy of Actuaries. 

16 ‘‘(B) PAYMENT AMOUNT.— 

17 ‘‘(i) IN GENERAL.—The formula for 

18 determining the amount of payments that 

19 will be paid to the offerors of health bene20 fits plans that insure high-risk individuals. 

21 Such formula shall provide for the equi22 table allocation of available funds through 

23 reconciliation and may be designed— 

24 ‘‘(I) to provide a schedule of pay25 ments that specifies the amount that 


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1 will be paid for each of the conditions 

2 identified under subparagraph (A); or 

3 ‘‘(II) to use any other com4 parable method for determining pay5 ment amounts that is recommended 

6 by the American Academy of Actu7 aries and that encourages the use of 

8 care coordination and care manage9 ment programs for high risk condi10 tions. 

11 ‘‘(ii) COORDINATION WITH COST12 SHARING AND RISK ADJUSTMENT PAY13 MENTS.—Such provisions shall provide 

14 methods to coordinate the payment system 

15 under this section with any cost-sharing 

16 requirements of a plan and the risk-adjust17 ment program under section 2212. 

18 ‘‘(3) DETERMINATION OF REQUIRED CONTRIBU19 TIONS.— 

20 ‘‘(A) IN GENERAL.—The provisions under 

21 paragraph (1) shall include the method for de22 termining the amount each offeror of a health 

23 benefits plan participating in the reinsurance 

24 program under this section is required to con25 tribute under paragraph (1)(A) for each plan 


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1 year beginning in the 36-month period begin2 ning July 1, 2013. The contribution amount for 

3 any plan year may be based on the percentage 

4 of revenue of each offeror or on a specified 

5 amount per enrollee and may be required to be 

6 paid in advance or periodically throughout the 

7 plan year. 

8 ‘‘(B) SPECIFIC REQUIREMENTS.—The 

9 method under this paragraph shall be designed 

10 so that— 

11 ‘‘(i) the contribution amount for each 

12 offeror proportionally reflects each 

13 offeror’s fully insured commercial book of 

14 business for all major medical products 

15 and third party administration fees; 

16 ‘‘(ii) the contribution amount can in17 clude an additional amount to fund the ad18 ministrative expenses of the applicable re19 insurance entity; 

20 ‘‘(iii) subject to clause (iv), the aggre21 gate contribution amounts for all States 

22 shall, based on the best estimates of the 

23 NAIC or the Secretary, whichever is appli24 cable, and without regard to amounts de25 scribed in clause (ii), equal 


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1 $10,000,000,000 for plan years beginning 

2 in the 12-month period beginning July 1, 

3 2013, $6,000,000,000 for plan years be4 ginning in the 12-month period beginning 

5 July 1, 2014, and $4,000,000,000 for plan 

6 years beginning in the 12-month period be7 ginning July 1, 2015; and 

8 ‘‘(iv) in addition to the aggregate con9 tribution amounts under clause (iii), each 

10 offeror’s contribution amount reflects its 

11 proportionate share of the $5,000,000,000 

12 amount used to fund the retiree reinsur13 ance program under section 2216. 

14 Nothing in this subparagraph shall be con15 strued to preclude a State from collecting addi16 tional amounts from offerors on a voluntary 

17 basis. 

18 ‘‘(4) EXPENDITURE OF FUNDS.— 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 subparagraph (B), the provisions under para21 graph (1) shall provide that— 

22 ‘‘(i) the contribution amounts col23 lected for any 12-month period may be al24 located and used in any of the three 12- 

25 month periods for which amounts are colVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 lected based on the reinsurance needs of a 

2 particular period or to reflect experience in 

3 a prior period; and 

4 ‘‘(ii) amounts remaining unexpended 

5 as of June 30, 2016, may be used to make 

6 payments under any reinsurance program 

7 of a State in the individual market in ef8 fect in the 24-month period beginning on 

9 July 1, 2016. 

10 ‘‘(B) TRANSFERS TO SECRETARY FOR RE11 TIREE REINSURANCE.—The provisions under 

12 paragraph (1) shall provide that each applicable 

13 reinsurance entity shall transfer to the Sec14 retary amounts collected that are allocable to 

15 amounts required to be collected under para16 graph (3)(B)(iv). 

17 ‘‘(c) APPLICABLE REINSURANCE ENTITY.—For pur18 poses of this section— 

19 ‘‘(1) IN GENERAL.—The term ‘applicable rein20 surance entity’ means a not-for-profit organization— 

21 ‘‘(A) the purpose of which is to help sta22 bilize premiums for coverage in the individual 

23 market in a State during the first 3 years of 

24 operation of an exchange for that market within 

25 the State when the risk of adverse selection reVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 lated to new rating rules and market changes is 

2 greatest; and 

3 ‘‘(B) the duties of which shall be to carry 

4 out the reinsurance program under this section 

5 by coordinating the funding and operation of 

6 the risk-spreading mechanisms designed to im7 plement the reinsurance program. 

8 ‘‘(2) STATE DISCRETION.—A State may have 

9 more than 1 applicable reinsurance entity to carry 

10 out the reinsurance program under this section with11 in the State and 2 or more States may enter into 

12 agreements to provide for an applicable reinsurance 

13 entity to carry out such program in all such States. 

14 ‘‘(3) ENTITIES ARE TAX-EXEMPT.—An applica15 ble reinsurance entity established under this section 

16 shall be treated as an organization exempt from tax17 ation under section 501(a) of the Internal Revenue 

18 Code of 1986. The preceding sentence shall not 

19 apply to the tax imposed by section 511 such Code 

20 (relating to tax on unrelated business taxable income 

21 of an exempt organization). 

22 ‘‘(d) COORDINATION WITH STATE HIGH-RISK

23 POOLS.—The State shall eliminate or modify any State 

24 high-risk pool to the extent necessary to carry out the re25 insurance program established under this section. The 


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1 State may coordinate the State high-risk pool with such 

2 program to the extent not inconsistent with the provisions 

3 of this section. 

4 ‘‘SEC. 2214. ESTABLISHMENT OF RISK CORRIDORS FOR 

5 PLANS IN INDIVIDUAL AND SMALL GROUP 

6 MARKETS. 

7 ‘‘(a) IN GENERAL.—The Secretary shall establish 

8 and administer a program of risk corridors for plan years 

9 beginning during the 36-month period beginning on July 

10 1, 2013, under which a qualified health benefits plan of11 fered in the individual or small group market may elect 

12 (before the beginning of such 36-month period) to partici13 pate in a payment adjustment system based on the ratio 

14 of the allowable costs of the plan to the plan’s aggregate 

15 premiums. Such program shall be based on the program 

16 for regional participating provider organizations under 

17 part D of title XVIII. 

18 ‘‘(b) PAYMENT METHODOLOGY.— 

19 ‘‘(1) PAYMENTS OUT.—The Secretary shall pro20 vide under the program established under subsection 

21 (a) that if— 

22 ‘‘(A) a participating plan’s allowable costs 

23 for any plan year are more than 103 percent 

24 but not more than 108 percent of the target 

25 amount, the Secretary shall pay to the plan an 


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1 amount equal to 50 percent of the target 

2 amount in excess of 103 percent of the target 

3 amount; and 

4 ‘‘(B) a participating plan’s allowable costs 

5 for any plan year are more than 108 percent of 

6 the target amount, the Secretary shall pay to 

7 the plan an amount equal to the sum of 2.5 

8 percent of the target amount plus 80 percent of 

9 allowable costs in excess of 108 percent of the 

10 target amount. 

11 ‘‘(2) PAYMENTS IN.—The Secretary shall pro12 vide under the program established under subsection 

13 (a) that if— 

14 ‘‘(A) a participating plan’s allowable costs 

15 for any plan year are less than 97 percent but 

16 not less than 92 percent of the target amount, 

17 the plan shall pay to the Secretary an amount 

18 equal to 50 percent of the excess of 97 percent 

19 of the target amount over the allowable costs; 

20 and 

21 ‘‘(B) a participating plan’s allowable costs 

22 for any plan year are less than 92 percent of 

23 the target amount, the plan shall pay to the 

24 Secretary an amount equal to the sum of 2.5 

25 percent of the target amount plus 80 percent of 


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1 the excess of 92 percent of the target amount 

2 over the allowable costs. 

3 ‘‘(c) DEFINITIONS.—In this section: 

4 ‘‘(1) ALLOWABLE COSTS.— 

5 ‘‘(A) IN GENERAL.—The amount of allow6 able costs of a plan for any year is an amount 

7 equal to the total costs (other than administra8 tive costs) of the plan in providing benefits cov9 ered by the plan. 

10 ‘‘(B) REDUCTION FOR RISK ADJUSTMENT

11 AND REINSURANCE PAYMENTS.—Allowable 

12 costs shall be reduced by any risk adjustment 

13 and reinsurance payments received under sec14 tion 2212 and 2213. 

15 ‘‘(2) TARGET AMOUNT.—The target amount of 

16 a plan for any year is an amount equal to the total 

17 premiums (including any premium credits or sub18 sidies under any governmental program) reduced by 

19 the administrative costs of the plan. 

20 ‘‘SEC. 2215. TEMPORARY HIGH RISK POOLS FOR INDIVID21 UALS WITH PREEXISTING CONDITIONS. 

22 ‘‘(a) ESTABLISHMENT OF HIGH RISK POOLS.— 

23 ‘‘(1) IN GENERAL.—Not later than 1 year after 

24 the date of enactment of this title, the Secretary 

25 shall establish 1 or more high risk pools that— 


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1 ‘‘(A) provide to all eligible individuals 

2 health insurance coverage (or comparable cov3 erage) that does not impose any preexisting 

4 condition exclusion with respect to such cov5 erage for all eligible individuals; and 

6 ‘‘(B) provide for health benefits coverage 

7 and premium rates described under subsection 

8 (b). 

9 ‘‘(2) ADMINISTRATION.—The Secretary may 

10 carry out this section— 

11 ‘‘(A) directly; or 

12 ‘‘(B) through agreements, grants, or con13 tracts with States or other persons the Sec14 retary determines appropriate. 

15 ‘‘(b) COVERAGE AND PREMIUM RATES.—Except as 

16 provided in subsection (c)(2)— 

17 ‘‘(1) COVERAGE.—The Secretary shall provide 

18 that the health benefits coverage provided to an eli19 gible individual through a high risk pool under this 

20 section shall— 

21 ‘‘(A) consist of the essential benefits pack22 age described in section 2242; and 

23 ‘‘(B) provide the bronze level of coverage 

24 described in section 2243(b)(1). 

25 ‘‘(2) PREMIUM RATES.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), the premium rate charged to 

3 an eligible individual enrolled in a high risk pool 

4 shall be equal to the standard premium rate for 

5 a health benefits plan providing the essential 

6 benefits package and bronze level of coverage 

7 described in paragraph (1). 

8 ‘‘(B) VARIATION OF PREMIUMS.—The Sec9 retary may vary the premium under subpara10 graph (A) to the same extent, and in the same 

11 manner, as the offeror of a qualified health ben12 efits plan may vary the premium for the plan 

13 under section 2204. 

14 ‘‘(c) FUNDING; TERMINATION OF AUTHORITY.— 

15 ‘‘(1) IN GENERAL.—There is appropriated to 

16 the Secretary, out of any moneys in the Treasury 

17 not otherwise appropriated, $5,000,000,000 to pay 

18 claims against (and administrative costs of) the high 

19 risk pool in excess of the premiums collected from el20 igible individuals enrolled in the high risk pool. Such 

21 funds shall be available without fiscal year limita22 tion. 

23 ‘‘(2) INSUFFICIENT FUNDS.—If the Secretary 

24 estimates for any fiscal year that the aggregate 

25 amounts available for payment of expenses of the 


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1 high risk pool will be less than the amount of the 

2 expenses, the Secretary shall make such adjustments 

3 as are necessary to eliminate such deficit, including 

4 reducing benefits, increasing premiums, or estab5 lishing waiting lists. 

6 ‘‘(3) TERMINATION OF AUTHORITY.— 

7 ‘‘(A) IN GENERAL.—Except as provided in 

8 subparagraph (B), coverage of eligible individ9 uals under a high risk pool shall terminate as 

10 of the end of June 30, 2013. 

11 ‘‘(B) TRANSITION TO EXCHANGE.—The 

12 Secretary shall develop procedures to provide 

13 for the transition of eligible individuals enrolled 

14 in health insurance coverage offered through a 

15 high risk pool established under this section 

16 into qualified health benefits plans offered 

17 through an exchange. Such procedures shall en18 sure that there is no lapse in coverage with re19 spect to the individual and may extend coverage 

20 after June 30, 2013, if the Secretary deter21 mines necessary to avoid such a lapse. 

22 ‘‘(d) ELIGIBLE INDIVIDUAL.—In this section, the 

23 term ‘eligible individual’ means an individual who dem24 onstrates to the satisfaction of the Secretary that the indi25 vidual— 


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1 ‘‘(1) has been denied health insurance coverage 

2 by reason of a preexisting condition (as defined in 

3 section 2202(b)); 

4 ‘‘(2) has been uninsured for a continuous pe5 riod of at least 6 months before the date of applica6 tion for enrollment in a high risk pool; 

7 ‘‘(3) is not eligible for essential health benefits 

8 coverage (as defined in section 5000A(f)); and 

9 ‘‘(4) is an individual who is, and who is reason10 ably expected to be for the entire period of coverage, 

11 a citizen or national of the United States, an alien 

12 lawfully admitted to the United States for perma13 nent residence, or an alien lawfully present in the 

14 United States. 

15 ‘‘SEC. 2216. REINSURANCE FOR RETIREES COVERED BY EM16 PLOYER-BASED PLANS. 

17 ‘‘(a) ADMINISTRATION.— 

18 ‘‘(1) IN GENERAL.—Not later than 90 days 

19 after the date of enactment of this section, the Sec20 retary shall establish a temporary reinsurance pro21 gram to provide reimbursement to participating em22 ployment-based plans for a portion of the cost of 

23 providing health benefits to retirees during the pe24 riod beginning on the date on which such program 

25 is established and ending on the date on which the 


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1 Secretary estimates that applications for payments 

2 under this section will have been made that equal 

3 the funds made available under this section (reduced 

4 by any administrative costs of the program). 

5 ‘‘(2) REFERENCE.—In this section: 

6 ‘‘(A) HEALTH BENEFITS.—The term 

7 ‘health benefits’ means medical, surgical, hos8 pital, prescription drug, and such other benefits 

9 as shall be determined by the Secretary, wheth10 er self-funded, or delivered through the pur11 chase of insurance or otherwise. 

12 ‘‘(B) EMPLOYMENT-BASED PLAN.—The 

13 term ‘employment-based plan’ means a group 

14 health benefits plan that— 

15 ‘‘(i) is— 

16 ‘‘(I) maintained by one or more 

17 current or former employers (includ18 ing without limitation any State or 

19 local government or political subdivi20 sion thereof), an employee organiza21 tion, a voluntary employees’ bene22 ficiary association, or a committee or 

23 board of individuals appointed to ad24 minister such plan; or 


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1 ‘‘(II) a multiemployer plan (as 

2 defined in section 3(37) of the Em3 ployee Retirement Income Security 

4 Act of 1974); and 

5 ‘‘(ii) provides health benefits to retir6 ees. 

7 ‘‘(C) RETIREES.—The term ‘retirees’ 

8 means individuals who are age 55 and older but 

9 are not eligible for coverage under title XVIII 

10 of the Social Security Act, and who are not ac11 tive employees of an employer maintaining, or 

12 currently contributing to, the employment-based 

13 plan or of any employer that has made substan14 tial contributions to fund such plan. 

15 ‘‘(b) PARTICIPATION.— 

16 ‘‘(1) EMPLOYMENT-BASED PLAN ELIGI17 BILITY.—A participating employment-based plan is 

18 an employment-based plan that— 

19 ‘‘(A) meets the requirements of paragraph 

20 (2) with respect to benefits provided under the 

21 plan; and 

22 ‘‘(B) submits to the Secretary an applica23 tion for participation in the program, at such 

24 time, in such manner, and containing such in25 formation as the Secretary shall require. 


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1 ‘‘(2) PLAN REQUIREMENTS.—An employment2 based plan meets the requirements of this paragraph 

3 if the plan— 

4 ‘‘(A) provides benefits appropriate for indi5 viduals between the ages described in subsection 

6 (a)(2)(C) and that are certified as so appro7 priate by the Secretary; 

8 ‘‘(B) implements programs and procedures 

9 to generate cost-savings with respect to partici10 pants with chronic and high-cost conditions; 

11 and 

12 ‘‘(C) provides documentation of the actual 

13 cost of medical claims involved and for which 

14 reimbursement is sought under this section. 

15 ‘‘(c) PAYMENTS.— 

16 ‘‘(1) SUBMISSION OF CLAIMS.— 

17 ‘‘(A) IN GENERAL.—A participating em18 ployment-based plan shall submit claims for re19 imbursement to the Secretary which shall con20 tain documentation of the actual costs of the 

21 items and services for which each claim is being 

22 submitted. 

23 ‘‘(B) BASIS FOR CLAIMS.—Claims sub24 mitted under paragraph (1) shall be based on 

25 the actual amount expended by the particiVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 pating employment-based plan involved within 

2 the plan year for the appropriate employment3 based health benefits provided to a retiree or 

4 the spouse, surviving spouse, or dependent of 

5 such retiree. In determining the amount of a 

6 claim for purposes of this subsection, the par7 ticipating employment-based plan shall take 

8 into account any negotiated price concessions 

9 (such as discounts, direct or indirect subsidies, 

10 rebates, and direct or indirect remunerations) 

11 obtained by such plan with respect to such 

12 health benefit. For purposes of determining the 

13 amount of any such claim, the costs paid by the 

14 retiree or the retiree’s spouse, surviving spouse, 

15 or dependent in the form of deductibles, co-pay16 ments, or co-insurance shall be included in the 

17 amounts paid by the participating employment18 based plan. 

19 ‘‘(2) PROGRAM PAYMENTS.—If the Secretary 

20 determines that a participating employment-based 

21 plan has submitted a valid claim under paragraph 

22 (1), the Secretary shall reimburse such plan for 80 

23 percent of that portion of the costs attributable to 

24 such claim that exceed $15,000, subject to the limits 

25 contained in paragraph (3). 


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1 ‘‘(3) LIMIT.—To be eligible for reimbursement 

2 under the program, a claim submitted by a partici3 pating employment-based plan under paragraph (1) 

4 with respect to any individual shall not be less than 

5 $15,000 nor greater than $90,000. Such amounts 

6 shall be adjusted each fiscal year based on the per7 centage increase in the Medical Care Component of 

8 the Consumer Price Index for all urban consumers 

9 (rounded to the nearest multiple of $1,000) for the 

10 year involved. 

11 ‘‘(4) USE OF PAYMENTS.—Amounts paid to a 

12 participating employment-based plan under this sub13 section shall be used to lower costs for the plan. 

14 Such payments may be used to reduce premium 

15 costs for an entity described in subsection 

16 (a)(2)(B)(i) or to reduce premium contributions, co17 payments, deductibles, co-insurance, or other out-of18 pocket costs for plan participants. Such payments 

19 shall not be used as general revenues for an entity 

20 described in subsection (a)(2)(B)(i). The Secretary 

21 shall develop a mechanism to monitor the appro22 priate use of such payments by such entities. 

23 ‘‘(5) PAYMENTS NOT TREATED AS INCOME.— 

24 Payments received under this subsection shall not be 

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1 ty described in subsection (a)(2)(B)(i) that is main2 taining or currently contributing to a participating 

3 employment-based plan. 

4 ‘‘(6) APPEALS.—The Secretary shall estab5 lish— 

6 ‘‘(A) an appeals process to permit partici7 pating employment-based plans to appeal a de8 termination of the Secretary with respect to 

9 claims submitted under this section; and 

10 ‘‘(B) procedures to protect against fraud, 

11 waste, and abuse under the program. 

12 ‘‘(d) AUDITS.—The Secretary shall conduct annual 

13 audits of claims data submitted by participating employ14 ment-based plans under this section to ensure that such 

15 plans are in compliance with the requirements of this sec16 tion. 

17 ‘‘(e) AVAILABLE FUNDS.— 

18 ‘‘(1) IN GENERAL.—The Secretary of the 

19 Treasury shall establish a separate account within 

20 the Treasury of the United States for deposit of 

21 amounts transferred to the Secretary of Health and 

22 Human Services under section 2213(b)(4)(B). 

23 ‘‘(2) APPROPRIATIONS.—Amounts in the ac24 count are hereby appropriated for use by the SecVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 retary in carrying out the program under this sec2 tion. 

3 ‘‘(3) LIMITATIONS.—The Secretary has the au4 thority to stop taking applications for participation 

5 in the program if applications will exceed amounts 

6 in the account. 

7 ‘‘Subpart 3—Preservation of Right to Maintain 

8 Existing Coverage 

9 ‘‘SEC. 2221. GRANDFATHERED HEALTH BENEFITS PLANS. 

10 ‘‘(a) IN GENERAL.—In the case of a grandfathered 

11 health benefits plan— 

12 ‘‘(1) nothing in this title shall be construed to 

13 require that an individual terminate coverage under 

14 the plan if such individual was enrolled in the plan 

15 as of the day before the effective date of this title; 

16 ‘‘(2) except as provided in subsection (b), the 

17 requirements of this part shall not apply to the plan; 

18 and 

19 ‘‘(3) the plan shall not be treated as a qualified 

20 health benefits plan for purposes of this title. 

21 ‘‘(b) APPLICATION OF RATING RULES IN SMALL

22 GROUP MARKET.—Each State shall phase in the applica23 tion of the insurance reform requirements under subpart 

24 1 to grandfathered health benefits plans offered in the 

25 small group market within the State over a consecutive 


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1 period of years (not greater than 5) beginning July 1, 

2 2013. 

3 ‘‘(c) GRANDFATHERED HEALTH BENEFITS PLAN.— 

4 In this title: 

5 ‘‘(1) IN GENERAL.—The term ‘grandfathered 

6 health benefits plan’ means any of the following that 

7 was offered and was in force and effect on the effec8 tive date of this title: 

9 ‘‘(A) Health insurance coverage in the in10 dividual market. 

11 ‘‘(B) A group health plan. 

12 ‘‘(2) LIMITED NEW ENROLLMENT.— 

13 ‘‘(A) IN GENERAL.—Except as provided in 

14 subparagraphs (B) and (C), a health benefits 

15 plan shall cease to be a grandfathered health 

16 benefits plan if it enrolls individuals who were 

17 not enrolled in the plan as of the day before the 

18 date described in paragraph (1). 

19 ‘‘(B) ALLOWANCE FOR FAMILY MEMBERS

20 TO JOIN CURRENT COVERAGE.—Family mem21 bers of an individual enrolled in a health bene22 fits plan as of the day before the date described 

23 in paragraph (1) may enroll in the plan on or 

24 after such date. 


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1 ‘‘(C) ALLOWANCE FOR NEW EMPLOYEES

2 TO JOIN CURRENT PLAN.—A group health plan 

3 of an employer that provides coverage as of the 

4 day before the date described in paragraph (1) 

5 may provide for the enrolling of new employees 

6 (and their families) in such plan. 

7 ‘‘(3) SPECIAL RULE FOR CATASTROPHIC

8 PLANS.—If health insurance coverage offered and in 

9 force in the individual market as of the day before 

10 the effective of this title is actuarially equivalent to 

11 a catastrophic plan described in section 2243(c), 

12 such coverage shall be treated as a grandfathered 

13 health benefits plan for purposes of this section. 

14 ‘‘Subpart 4—Continued Role of States 

15 ‘‘SEC. 2225. CONTINUED STATE ENFORCEMENT OF INSUR16 ANCE REGULATIONS. 

17 ‘‘(a) IN GENERAL.— 

18 ‘‘(1) MODEL REGULATION.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 request the National Association of Insurance 

21 Commissioners (in this section referred to as 

22 the ‘NAIC’) to, not later than 12 months after 

23 the date of enactment of this title, develop and 

24 promulgate a Model Regulation that imple25 ments the requirements set forth in this title 


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1 for health benefit plans offered within a State. 

2 In developing and promulgating the Model Reg3 ulation, the NAIC shall consult with its mem4 bers, health insurance issuers, consumer organi5 zations, and such other individuals as the NAIC 

6 selects in a manner designed to ensure balanced 

7 representation among interested parties. 

8 ‘‘(B) SECRETARIAL ACTION.—The Sec9 retary shall include the Model Regulation estab10 lished under paragraph (1) in the regulations 

11 prescribed by the Secretary to implement the 

12 requirements described in subparagraph (A). If 

13 the NAIC does not promulgate the Model Regu14 lation within the 12-month period under sub15 paragraph (A), the Secretary shall establish a 

16 Federal standard implementing such require17 ments. 

18 ‘‘(2) STATE ACTION.—Each State that elects to 

19 apply the requirements set forth in this title to 

20 health benefit plans offered within the State shall, 

21 not later than July 1, 2013, adopt and have in ef22 fect— 

23 ‘‘(A) the Model Regulation or Federal 

24 standard established under paragraph (1), 

25 whichever is applicable; or 


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1 ‘‘(B) a State law or regulation that the 

2 Secretary determines implements the require3 ments for health benefit plans offered within 

4 the State. 

5 ‘‘(3) FAILURE TO IMPLEMENT PROVISIONS.— 

6 ‘‘(A) IN GENERAL.—If— 

7 ‘‘(i) a State does not elect to apply 

8 the requirements set forth in this title to 

9 health benefit plans offered within the 

10 State; or 

11 ‘‘(ii) the Secretary determines that an 

12 electing State has failed to adopt or sub13 stantially enforce the Model Regulation, 

14 Federal standard, or State law or regula15 tions described in paragraph (2), whichever 

16 is applicable, with respect to health bene17 fits plan offerors in the State, 

18 the Secretary shall implement and enforce such 

19 requirements insofar as they relate to the 

20 issuance, sale, renewal, and offering of health 

21 benefits plans in such State until such time as 

22 the Secretary determines the State has adopted 

23 and is substantially enforcing the requirements. 

24 ‘‘(B) ENFORCEMENT AUTHORITY.—The 

25 provisions of section 2722(b) of the Public 


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1 Health Services Act shall apply to the enforce2 ment under subparagraph (A) of the provisions 

3 of this part (without regard to any limitation on 

4 the application of those provisions to group 

5 health plans). 

6 ‘‘(4) RATINGS REFORMS MUST APPLY UNI7 FORMLY TO ALL OFFERORS.—The Model Regula8 tion, Federal standard, or State law and regulation 

9 implemented by a State under this subsection shall 

10 require that any standard or requirement adopted 

11 pursuant to this title (including any standard or re12 quirement described in subsection (c) that offers 

13 more protection to consumers than the protection of14 fered by any standard or requirement set forth in 

15 this title) shall be applied uniformly to all offerors 

16 of all health benefits plans in the individual or small 

17 group market, whichever is applicable. 

18 ‘‘(b) STATE EXCHANGES.— 

19 ‘‘(1) EXCHANGES FOR QUALIFIED PLANS.— 

20 ‘‘(A) IN GENERAL.—Subject to paragraph 

21 (2), not later than July 1, 2013, an electing 

22 State under subsection (a)(2) shall establish 

23 and have in operation 1 or more exchanges (in24 cluding SHOP exchanges) meeting the require25 ments of part B with respect to the offering of 


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1 qualified health benefits plans through the ex2 change. 

3 ‘‘(B) FAILURE TO ESTABLISH.—If— 

4 ‘‘(i) a State is not an electing State 

5 under subsection (a)(2); or 

6 ‘‘(ii) an electing State does not estab7 lish the exchanges described in subpara8 graph (A) within 24 months after the date 

9 of enactment of this title (or the Secretary 

10 determines at the end of the 24-month pe11 riod that the exchanges will not be oper12 ational by July 1, 2013), 

13 the Secretary shall enter into a contract with a 

14 nongovernmental entity to establish and operate 

15 the exchanges within the State. 

16 ‘‘(2) INTERIM EXCHANGES.—Each electing 

17 State under subsection (a)(2) shall as soon as prac18 ticable establish the exchanges described in section 

19 2235(e) for use by residents of the State during the 

20 period beginning January 1, 2010, and ending June 

21 30, 2013. In the case of a State that is not an elect22 ing State under subsection (a)(2), or if the Secretary 

23 determines that the exchanges in an electing State 

24 will not be operational within a reasonable period of 

25 time after the date of enactment of this title, the 


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1 Secretary shall enter into a contract with a non2 governmental entity to establish and operate the ex3 changes within the State during such period. 

4 ‘‘(c) CONTINUED APPLICABILITY OF STATE LAW

5 WITH RESPECT TO HEALTH BENEFITS PLANS.— 

6 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

7 and (3), this title shall not be construed to super8 sede any provision of State law which establishes, 

9 implements, or continues in effect any standard or 

10 requirement relating to health benefits plan offerors 

11 in connection with a health benefits plan that offers 

12 more protection to consumers than the protection of13 fered by any standard or requirement set forth in 

14 this title. The standards or requirements referred to 

15 in the preceding sentence shall include standards or 

16 requirements relating to— 

17 ‘‘(A) consumer protections, including 

18 claims grievance procedures, external review of 

19 claims determinations, oversight of insurance 

20 agent practices and training, and insurance 

21 market conduct; 

22 ‘‘(B) premium rating reviews; 

23 ‘‘(C) solvency and reserve requirements re24 lating to the licensure of health insurance 

25 issuers operating in the State; and 


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1 ‘‘(D) the assessment of State-based pre2 mium taxes on health insurance issuers. 

3 ‘‘(2) SPECIAL RULE FOR RATING REQUIRE4 MENTS.—For purposes of paragraph (1), in the case 

5 of the ratings requirements under section 2204, a 

6 State law shall not be treated as offering more pro7 tection to consumers than the protection offered by 

8 such requirements if the State law imposes ratios 

9 that are greater than the ratios specified in section 

10 2204(b). 

11 ‘‘(3) CONTINUED PREEMPTION WITH RESPECT

12 TO GROUP HEALTH PLANS.—Nothing in this part 

13 shall be construed to affect or modify the provisions 

14 of section 514 of the Employee Retirement Income 

15 Security Act of 1974 with respect to group health 

16 plans. 

17 ‘‘(d) AUTOMATIC ENROLLMENT.—A State may insti18 tute a program to provide that offerors of qualified health 

19 benefit plans, small employers, and exchanges offering 

20 qualified health benefits plans in the individual and small 

21 group market within the State may automatically enroll 

22 individuals and employees in, or continue enrollment of in23 dividuals in, qualified health benefit plans where appro24 priate to ensure coverage of the individuals. Any auto25 matic enrollment program shall include adequate notice 


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1 and the opportunity for an individual or employee to opt 

2 out of any coverage the individual or employee were auto3 matically enrolled in. 

4 ‘‘(e) CLAIMS REVIEW PROCESS.—Each State shall— 

5 ‘‘(1) require each offeror of a qualified health 

6 benefits plans offered through an exchange— 

7 ‘‘(A) to provide an internal claims appeal 

8 process; 

9 ‘‘(B) to provide notice in clear language 

10 and in the enrollee’s primary language of avail11 able internal and external appeals processes and 

12 the availability of the ombudsman established 

13 under section 2229(a) to assist them with the 

14 appeals processes; and 

15 ‘‘(C) to allow an enrollee to review their 

16 file, to present evidence and testimony as part 

17 of the appeals process, and to receive continued 

18 coverage pending the outcome of the appeals 

19 process; 

20 ‘‘(2) provide an external review process for such 

21 plans that, at a minimum, includes the consumer 

22 protections set forth in the Uniform External Review 

23 Model Act promulgated by the National Association 

24 of Insurance Commissioners and is binding on such 

25 plans; and 


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1 ‘‘(3) ensure enrollees can seek judicial review 

2 through available Federal or State procedures. 

3 ‘‘(f) APPLICABLE STATE AUTHORITY.—In this title, 

4 the term ‘applicable State authority’ means the State in5 surance commissioner or official or officials designated by 

6 the State to enforce the requirements of this title for the 

7 State involved. 

8 ‘‘SEC. 2226. WAIVER OF HEALTH INSURANCE REFORM RE9 QUIREMENTS. 

10 ‘‘(a) APPLICATION.—A State may apply to the Sec11 retary for the waiver of all or any requirements under this 

12 title and section 5000A of the Internal Revenue Code of 

13 1986 with respect to health insurance coverage within that 

14 State for plan years beginning on or after July 1, 2015. 

15 Such application shall— 

16 ‘‘(1) be filed at such time and in such manner 

17 as the Secretary may require; and 

18 ‘‘(2) contain such information as the Secretary 

19 may require, including— 

20 ‘‘(A) a comprehensive description of the 

21 State legislation or program for implementing a 

22 plan meeting the requirements for a waiver 

23 under this section; and 


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1 ‘‘(B) a 10-year budget plan for such plan 

2 that is budget neutral for the Federal govern3 ment. 

4 ‘‘(b) GRANTING OF WAIVERS.—The Secretary may 

5 grant a request for a waiver under this section if the Sec6 retary determines that— 

7 ‘‘(1) the State plan to provide health care cov8 erage to its residents provides coverage that is at 

9 least as comprehensive as the coverage required 

10 under a qualified health benefits plan offered 

11 through exchanges established under this title; and 

12 ‘‘(2) the State plan to provide health care cov13 erage to its residents will lower the growth in health 

14 care spending, will improve delivery system perform15 ance, will provide affordable choices for its citizens, 

16 will expand protection against excessive out-of-pock17 et spending, will provide coverage to the same num18 ber of uninsured as the provisions of this title will 

19 provide, and will not increase the Federal deficit. 

20 ‘‘(c) SCOPE OF WAIVER.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall deter22 mine the scope of a waiver granted to a State under 

23 this section, including which Federal laws and re24 quirements will not apply to the State under the 

25 waiver. 


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1 ‘‘(2) LIMITATION.—The Secretary may not 

2 waive under this section any Federal law or require3 ment that is not within the authority of the Sec4 retary. 

5 ‘‘(d) DETERMINATIONS BY SECRETARY.— 

6 ‘‘(1) TIME FOR DETERMINATION.—The Sec7 retary shall make a determination under this section 

8 not later than 180 days after the receipt of an appli9 cation from a State under subsection (a). 

10 ‘‘(2) EFFECT OF DETERMINATION.— 

11 ‘‘(A) GRANTING OF WAIVERS.—If the Sec12 retary determines to grant a waiver under this 

13 section, the Secretary shall notify the State in14 volved of such determination and the terms and 

15 effectiveness of such waiver. 

16 ‘‘(B) DENIAL OF WAIVER.—If the Sec17 retary determines a waiver should not be grant18 ed under this section, the Secretary shall notify 

19 the State involved, and the appropriate commit20 tees of Congress of such determination and the 

21 reasons therefor. 

22 ‘‘SEC. 2227. PROVISIONS RELATING TO OFFERING OF PLANS 

23 IN MORE THAN ONE STATE. 

24 ‘‘(a) HEALTH CARE CHOICE COMPACTS.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall request 

2 the National Association of Insurance Commis3 sioners to, no later than July 1, 2012, develop model 

4 rules for the creation of health care choice compacts 

5 under which 2 or more States may enter into an 

6 agreement under which— 

7 ‘‘(A) 1 or more qualified health benefits 

8 plans could be offered in the individual markets 

9 in all such States but, except as provided in 

10 subparagraph (B), only be subject to the laws 

11 and regulations of the State in which the plan 

12 was written or issued; 

13 ‘‘(B) the offeror of any qualified health 

14 benefits plan to which the compact applies— 

15 ‘‘(i) would continue to be subject to 

16 market conduct, unfair trade practices, 

17 network adequacy, and consumer protec18 tion standards, including addressing dis19 putes as to the performance of the con20 tract, of the State in which the purchaser 

21 resides; 

22 ‘‘(ii) would be required to be licensed 

23 in each State in which it offers the plan 

24 under the compact or to submit to the ju25 risdiction of each such State with regard to 


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1 the standards described in clause (i) (in2 cluding allowing access to records as if the 

3 insurer were licensed in the State); and 

4 ‘‘(iii) must clearly notify consumers 

5 that the policy may not be subject to all 

6 the laws and regulations of the State in 

7 which the purchaser resides. 

8 If the NAIC does not promulgate the model rules by 

9 July 1, 2012, the Secretary shall, not later than 

10 July 1, 2013, establish a Federal standard imple11 menting such rules. 

12 ‘‘(2) STATE AUTHORITY.—A State may not 

13 enter into an agreement under this subsection unless 

14 the State enacts a law after the date of the enact15 ment of this title that specifically authorizes the 

16 State to enter into such agreements. 

17 ‘‘(3) EFFECTIVE DATE.—A health care choice 

18 compact described in paragraph (1) shall not take 

19 effect before January 1, 2015. 

20 ‘‘(b) AUTHORITY FOR NATIONWIDE PLANS.— 

21 ‘‘(1) IN GENERAL.—Notwithstanding section 

22 2225(c)(1), and except as provided in paragraph (2), 

23 if an offeror of a qualified health benefits plan in the 

24 individual or small group market meets the require25 ments of this subsection— 


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1 ‘‘(A) the offeror of the plan may offer the 

2 qualified health benefits plan in more than 1 

3 State; and 

4 ‘‘(B) any State law mandating benefit cov5 erage by a health benefits plan shall not apply 

6 to the qualified health benefits plan. 

7 ‘‘(2) STATE OPT-OUT.—A State may, by spe8 cific reference in a law enacted after the date of en9 actment of this title, provide that this subsection 

10 shall not apply to that State. Such opt-out shall be 

11 effective until such time as the State by law revokes 

12 it. 

13 ‘‘(3) PLAN REQUIREMENTS.—An offeror meets 

14 the requirements of this subsection with respect to 

15 a qualified health benefits plan if— 

16 ‘‘(A) the plan offers a benefits package 

17 that is uniform in each State in which the plan 

18 is offered and meets the requirements set forth 

19 in paragraph (3); 

20 ‘‘(B) the offeror is licensed in each State 

21 in which it offers the plan and is subject in 

22 such State to the standards and requirements 

23 described in the last sentence of section 

24 2225(c)(1); 


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1 ‘‘(C) the offeror meets all requirements of 

2 this title with respect to a qualified health bene3 fits plan, including the requirement to offer the 

4 silver and gold levels of the plan in each ex5 change in the State for the market in which the 

6 plan is offered; and 

7 ‘‘(D) the offeror determines the premiums 

8 for the plan in any State on the basis of the 

9 ratings rules in effect in that State for the rat10 ings areas in which it is offered. 

11 ‘‘(4) APPLICABLE REGULATIONS.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 request the National Association of Insurance 

14 Commissioners to, no later than 2012, develop 

15 model rules for the offering of a qualified health 

16 benefits plans on a national basis. Such rules 

17 shall establish standards for— 

18 ‘‘(i) the implementation of benefit cat19 egories, taking into account how each ben20 efit is offered in a majority of States; and 

21 ‘‘(ii) harmonization between applicable 

22 State authorities of State insurance regula23 tions relating to filing of forms and the fil24 ing of premium rates. 


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1 If the NAIC does not promulgate the model 

2 rules by December 31, 2012, the Secretary 

3 shall, not later than December 31, 2013, estab4 lish a Federal standard implementing such 

5 rules. 

6 ‘‘(B) STATE ACTION.—Each State (other 

7 than a State described in paragraph (2)) shall 

8 include the provisions described in subpara9 graph (A) in the Model Regulation, Federal 

10 standard, or State law or regulation the State 

11 adopts and has in effect under section 

12 2225(a)(2). 

13 ‘‘SEC. 2228. STATE FLEXIBILITY TO ESTABLISH BASIC 

14 HEALTH PROGRAMS FOR LOW-INCOME INDI15 VIDUALS NOT ELIGIBLE FOR MEDICAID. 

16 ‘‘(a) ESTABLISHMENT OF PROGRAM.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall estab18 lish a basic health program meeting the require19 ments of this section under which a State may enter 

20 into contracts to offer 1 or more standard health 

21 plans providing at least an essential benefits package 

22 described in section 2242 to eligible individuals in 

23 lieu of offering such individuals coverage through an 

24 exchange established under part B. 


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1 ‘‘(2) CERTIFICATIONS AS TO BENEFIT COV2 ERAGE AND COSTS.—Such program shall provide 

3 that a State may not establish a basic health pro4 gram under this section unless the State establishes 

5 to the satisfaction of the Secretary, and the Sec6 retary certifies, that— 

7 ‘‘(A) in the case of an eligible individual 

8 enrolled in a standard health plan offered 

9 through the program, the State provides— 

10 ‘‘(i) that the amount of the monthly 

11 premium an eligible individual is required 

12 to pay for coverage under the standard 

13 health plan for the individual and the indi14 vidual’s dependents does not exceed the 

15 amount of the monthly premium that the 

16 eligible individual would have been required 

17 to pay if the individual had enrolled in the 

18 applicable second lowest cost silver plan 

19 (as defined in section 36B(b)(3)(B) of the 

20 Internal Revenue Code of 1986) offered to 

21 the individual through an exchange; and 

22 ‘‘(ii) that the cost-sharing an eligible 

23 individual is required to pay under the 

24 standard health plan does not exceed— 


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1 ‘‘(I) the cost-sharing required 

2 under a platinum plan in the case of 

3 an eligible individual with household 

4 income not in excess of 150 percent of 

5 the poverty line for the size of the 

6 family involved; and 

7 ‘‘(II) the cost-sharing required 

8 under a gold plan in the case of an el9 igible individual; and 

10 ‘‘(B) the benefits provided under the 

11 standard health plans offered through the pro12 gram cover at least benefits required under an 

13 essential benefits package described in section 

14 2242. 

15 For purposes of subparagraph (A)(i), the amount of 

16 the monthly premium an individual is required to 

17 pay under either the standard health plan or the ap18 plicable second lowest cost silver plan shall be deter19 mined after reduction for any premium credits and 

20 premium subsidies allowable with respect to either 

21 plan. 

22 ‘‘(b) STANDARD HEALTH PLAN.—In this section, the 

23 term ‘standard heath plan’ means a health benefits plan 

24 that the State contracts with under this section— 


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1 ‘‘(1) under which the only individuals eligible to 

2 enroll are eligible individuals; 

3 ‘‘(2) that provides at least an essential benefits 

4 package described in section 2242; and 

5 ‘‘(3) in the case of a plan that provides health 

6 insurance coverage offered by a health insurance 

7 issuer, that has a medical loss ratio of at least 85 

8 percent. 

9 ‘‘(c) CONTRACTING PROCESS.— 

10 ‘‘(1) IN GENERAL.—A State basic health pro11 gram shall establish a competitive process for enter12 ing into contracts with standard health plans under 

13 subsection (a), including negotiation of premiums 

14 and cost-sharing and negotiation of benefits in addi15 tion to those required by an essential benefits pack16 age described in section 2242. 

17 ‘‘(2) SPECIFIC ITEMS TO BE CONSIDERED.—A 

18 State shall, as part of its competitive process under 

19 paragraph (1), include at least the following: 

20 ‘‘(A) INNOVATION.—Negotiation with 

21 offerors of a standard health plan for the inclu22 sion of innovative features in the plan, includ23 ing— 


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1 ‘‘(i) care coordination and care man2 agement for enrollees, especially for those 

3 with chronic health conditions; 

4 ‘‘(ii) incentives for use of preventive 

5 services; and 

6 ‘‘(iii) the establishment of relation7 ships between providers and patients that 

8 maximize patient involvement in health 

9 care decision-making, including providing 

10 incentives for appropriate utilization under 

11 the plan. 

12 ‘‘(B) HEALTH AND RESOURCE DIF13 FERENCES.—Consideration of, and the making 

14 of suitable allowances for, differences in health 

15 care needs of enrollees and differences in local 

16 availability of, and access to, health care pro17 viders. Nothing in this subparagraph shall be 

18 construed as allowing discrimination on the 

19 basis of pre-existing condition or other health 

20 status-related factors. 

21 ‘‘(C) MANAGED CARE.—Contracting with 

22 managed care systems, or with systems that 

23 offer as many of the attributes of managed care 

24 as are feasible in the local health care market. 


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1 ‘‘(D) PERFORMANCE MEASURES.—Estab2 lishing specific performance measures and 

3 standards for offerors of standard health plans 

4 that focus on quality of care and improved 

5 health outcomes, requiring such plan to report 

6 to the State with respect to the measures and 

7 standards, and making the performance and 

8 quality information available to enrollees in a 

9 useful form. 

10 ‘‘(3) ENHANCED AVAILABILITY.— 

11 ‘‘(A) MULTIPLE PLANS.—A State shall, to 

12 the maximum extent feasible, seek to make 

13 multiple standard health plans available to eligi14 ble individuals within a State to ensure individ15 uals have a choice of such plans. 

16 ‘‘(B) REGIONAL COMPACTS.—A State may 

17 negotiate a regional compact with other States 

18 to include coverage of eligible individuals in all 

19 such States in agreements with offerors of 

20 standard health plans. 

21 ‘‘(4) COORDINATION WITH OTHER STATE PRO22 GRAMS.—A State shall, to the maximum extent fea23 sible, seek to coordinate the administration of, and 

24 provision of benefits under, its program under this 

25 section with the State medicaid program under title 


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1 XIX, the State child health plan under title XXI, 

2 and other State-administered health programs to 

3 maximize the efficiency of such programs and to im4 prove the continuity of care. 

5 ‘‘(d) TRANSFER OF FUNDS TO STATES.— 

6 ‘‘(1) IN GENERAL.—If the Secretary determines 

7 that a State electing the application of this section 

8 meets the requirements of the program established 

9 under subsection (a), the Secretary shall transfer to 

10 the State for each fiscal year for which 1 or more 

11 standard health plans are operating within the State 

12 the amount determined under paragraph (3). 

13 ‘‘(2) USE OF FUNDS.—A State shall establish a 

14 trust for the deposit of the amounts received under 

15 paragraph (1) and amounts in the trust fund shall 

16 only be used to reduce the premiums and cost-shar17 ing of, or to provide additional benefits for, eligible 

18 individuals enrolled in standard health plans within 

19 the State. Amounts in the trust fund, and expendi20 tures of such amounts, shall not be included in de21 termining the amount of any non-Federal funds for 

22 purposes of meeting any matching or expenditure re23 quirement of any federally-funded program. 

24 ‘‘(3) AMOUNT OF PAYMENT.— 

25 ‘‘(A) SECRETARIAL DETERMINATION.— 


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1 ‘‘(i) IN GENERAL.—The amount de2 termined under this paragraph for any fis3 cal year is the amount the Secretary deter4 mines is equal to 85 percent of the credits 

5 under section 36B of the Internal Revenue 

6 Code of 1986, and the cost-sharing sub7 sidies under section 2247, that would have 

8 been provided for the fiscal year to eligible 

9 individuals enrolled in standard health 

10 plans in the State if such eligible individ11 uals were allowed to enroll in qualified 

12 health benefits plans through an exchange 

13 established under part B. 

14 ‘‘(ii) SPECIFIC REQUIREMENTS.—The 

15 Secretary shall make the determination 

16 under clause (i) on a per enrollee basis and 

17 shall take into account all relevant factors 

18 necessary to determine the value of the 

19 credits and subsidies that would have been 

20 provided to eligible individuals described in 

21 clause (i). 

22 ‘‘(B) CORRECTIONS.—The Secretary shall 

23 adjust the payment for any fiscal year to reflect 

24 any error in the determinations under subpara25 graph (A) for any preceding fiscal year. 


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1 ‘‘(4) APPLICATION OF ABORTION COVERAGE RE2 QUIREMENTS.—The rules of section 2245 shall apply 

3 to a State basic health program, and to standard 

4 health plans offered through such program, in the 

5 same manner as such rules apply to qualified basic 

6 health benefits plans. 

7 ‘‘(e) ELIGIBLE INDIVIDUAL.— 

8 ‘‘(1) IN GENERAL.—In this section, the term 

9 ‘eligible individual’ means, with respect to any State, 

10 an individual— 

11 ‘‘(A) who a resident of the State who is 

12 not eligible to enroll in the State’s medicaid 

13 program under title XIX for benefits that at a 

14 minimum consist of the essential benefits pack15 age described in section 2242; 

16 ‘‘(B) whose household income exceeds 133 

17 percent but does not exceed 200 percent of the 

18 poverty line for the size of the family involved; 

19 ‘‘(C) who is not eligible for essential health 

20 benefits coverage (as defined in section 

21 5000A(f)) or is eligible for an employer-spon22 sored plan that is not affordable coverage (as 

23 determined under section 5000A(e)(2)); and 

24 ‘‘(D) who has not attained age 65 as of 

25 the beginning of the plan year. 


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1 Such term shall not include any individual who is 

2 not eligible under section 2232(c) to be covered by 

3 a qualified health benefits plan offered through an 

4 exchange. 

5 ‘‘(2) ELIGIBLE INDIVIDUALS MAY NOT USE EX6 CHANGE.—An eligible individual shall not be treated 

7 as a qualified individual under section 2223 eligible 

8 for enrollment in a qualified health benefits plan of9 fered through an exchange established under part B. 

10 ‘‘(f) SECRETARIAL OVERSIGHT.—The Secretary shall 

11 each year conduct a review of each State program to en12 sure compliance with the requirements of this section, in13 cluding ensuring that the State program meets— 

14 ‘‘(1) eligibility verification requirements for par15 ticipation in the program; 

16 ‘‘(2) the requirements for use of Federal funds 

17 received by the program; and 

18 ‘‘(3) the quality and performance standards 

19 under this section. 

20 ‘‘(g) STANDARD HEALTH PLAN OFFERORS.—A 

21 State may provide that persons eligible to offer standard 

22 health plans under a basic health program established 

23 under this section may include a licensed health mainte24 nance organization, a licensed health insurance insurer, or 


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1 a network of health care providers established to offer 

2 services under the program. 

3 ‘‘(h) DEFINITIONS.—Any term used in this section 

4 which is also used in section 36B of the Internal Revenue 

5 Code of 1986 shall have the meaning given such term by 

6 such section. 

7 ‘‘Subpart 5—Other Definitions and Rules 

8 ‘‘SEC. 2230. OTHER DEFINITIONS AND RULES. 

9 ‘‘(a) EMPLOYERS.—In this title: 

10 ‘‘(1) LARGE EMPLOYER.—The term ‘large em11 ployer’ means, in connection with a group health 

12 plan with respect to a calendar year and a plan year, 

13 an employer who employed an average of at least 

14 101 employees on business days during the pre15 ceding calendar year and who employs at least 1 em16 ployee on the first day of the plan year. 

17 ‘‘(2) SMALL EMPLOYER.—The term ‘small em18 ployer’ means, in connection with a group health 

19 plan with respect to a calendar year and a plan year, 

20 an employer who employed an average of at least 1 

21 but not more than 100 employees on business days 

22 during the preceding calendar year and who employs 

23 at least 1 employee on the first day of the plan year. 

24 Unless an employer elects otherwise, if an employer 

25 is treated as a small employer for any plan year to 


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1 which this title applies, then such employer shall 

2 continue to be treated as a small employer for any 

3 subsequent plan year even if the number of employ4 ees exceeds the number in effect under this subpara5 graph. 

6 ‘‘(3) STATE OPTION TO TREAT 50 EMPLOYEES

7 AS SMALL.—In the case of plan years beginning be8 fore January 1, 2015, a State may elect to apply 

9 this subsection by substituting ‘51 employees’ for 

10 ‘101 employees’ in paragraph (1) and by sub11 stituting ‘50 employees’ for ‘100 employees’ in para12 graph (2). 

13 ‘‘(4) RULES FOR DETERMINING EMPLOYER

14 SIZE.—For purposes of this subsection— 

15 ‘‘(A) APPLICATION OF AGGREGATION RULE

16 FOR EMPLOYERS.—All persons treated as a sin17 gle employer under subsection (b), (c), (m), or 

18 (o) of section 414 of the Internal Revenue Code 

19 of 1986 shall be treated as 1 employer. 

20 ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN

21 PRECEDING YEAR.—In the case of an employer 

22 which was not in existence throughout the pre23 ceding calendar year, the determination of 

24 whether such employer is a small or large em25 ployer shall be based on the average number of 


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1 employees that it is reasonably expected such 

2 employer will employ on business days in the 

3 current calendar year. 

4 ‘‘(C) PREDECESSORS.—Any reference in 

5 this subsection to an employer shall include a 

6 reference to any predecessor of such employer. 

7 ‘‘(b) TERMS RELATING TO PLANS.—In this title: 

8 ‘‘(1) PLAN SPONSOR.—The term ‘plan sponsor’ 

9 has the meaning given such term in section 3(16)(B) 

10 of the Employee Retirement Income Security Act of 

11 1974. 

12 ‘‘(2) PLAN YEAR.—The term ‘plan year’ 

13 means— 

14 ‘‘(A) with respect to a group health plan, 

15 a plan year as specified under such plan; or 

16 ‘‘(B) with respect to another health bene17 fits plan, the calendar year, the 12-month pe18 riod beginning on July 1 of each year, or such 

19 other 12-month period as may be specified by 

20 the Secretary.’’. 


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1 Subtitle B—Exchanges and 

2 Consumer Assistance 

3 SEC. 1101. ESTABLISHMENT OF QUALIFIED HEALTH BENE4 FITS PLAN EXCHANGES. 

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

6 Act, as added by section 1001, is amended by adding at 

7 the end the following: 

8 ‘‘PART B—EXCHANGE AND CONSUMER 

9 ASSISTANCE 

10 ‘‘Subpart 1—Individuals and Small Employers 

11 Offered Affordable Choices 

12 ‘‘SEC. 2231. RIGHTS AND RESPONSIBILITIES REGARDING 

13 CHOICE OF COVERAGE THROUGH EXCHANGE. 

14 ‘‘(a) RIGHT TO ENROLL THROUGH AN EXCHANGE.— 

15 ‘‘(1) QUALIFIED INDIVIDUALS.—Each qualified 

16 individual shall have the choice to enroll or to not 

17 enroll in a qualified health benefits plan offered 

18 through an exchange that is established under this 

19 title, that covers the State in which the individual 

20 resides, and that covers qualified health benefits 

21 plans in the individual market. 

22 ‘‘(2) QUALIFIED SMALL EMPLOYERS.— 

23 ‘‘(A) IN GENERAL.—In the case of a quali24 fied small employer— 


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1 ‘‘(i) such employer may elect to offer 

2 to its employees qualified health benefits 

3 plans offered through an exchange that is 

4 established under this title, that covers the 

5 State in which the employees resides, and 

6 that covers qualified health benefits plans 

7 in the small group market; and 

8 ‘‘(ii) each employee of such employer 

9 shall have the choice to enroll or to not en10 roll in a qualified health benefits plan of11 fered through such exchange. 

12 If a qualified small employer elects to limit the 

13 qualified health benefits plans or levels of cov14 erage under part C that employees may enroll 

15 in through such exchange, employees may only 

16 choose to enroll in those plans or plans in those 

17 levels. 

18 ‘‘(B) SELF-INSURED PLANS.—If a quali19 fied small employer offers its employees cov20 erage under a self-insured health benefits plan, 

21 the employer may not offer its employees quali22 fied health benefits plans through an exchange. 

23 ‘‘(3) MEMBERS OF CONGRESS AND CONGRES24 SIONAL STAFF REQUIRED TO PARTICIPATE IN EX25 CHANGE.— 


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1 ‘‘(A) IN GENERAL.—Notwithstanding 

2 chapter 89 of title 5, United States Code, or 

3 any provision of this title— 

4 ‘‘(i) each Member of Congress and 

5 Congressional employee shall be treated as 

6 a qualified individual entitled to the right 

7 under this paragraph to enroll in a quali8 fied health benefits plan in the individual 

9 market offered through an exchange in the 

10 State in which the Member or employee re11 sides; and 

12 ‘‘(ii) any employer contribution under 

13 such chapter on behalf of the Member or 

14 employee may be paid only to the offeror 

15 of a qualified health benefits plan in which 

16 the Member or employee enrolled in 

17 through such exchange and not to the of18 feror of a plan offered through the Federal 

19 employees health benefit program under 

20 such chapter. 

21 ‘‘(B) PAYMENTS BY FEDERAL GOVERN22 MENT.—The Secretary, in consultation with the 

23 Director of the Office of Personnel Manage24 ment, shall establish procedures under which— 


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1 ‘‘(i) the employer contributions on be2 half of a Member or Congressional em3 ployee are actuarially adjusted for age; and 

4 ‘‘(ii) the employer contributions may 

5 be made directly to an exchange for pay6 ment to an offeror. 

7 ‘‘(C) CONGRESSIONAL EMPLOYEE.—In this 

8 paragraph, the term ‘Congressional employee’ 

9 means an employee whose pay is disbursed by 

10 the Secretary of the Senate or the Clerk of the 

11 House of Representatives. 

12 ‘‘(b) RESPONSIBILITY OF OFFERORS OF QUALIFIED

13 HEALTH BENEFITS PLANS.— 

14 ‘‘(1) ALL PLANS MUST BE OFFERED THROUGH

15 AN EXCHANGE.—An offeror of a qualified health 

16 benefits plan in a State— 

17 ‘‘(A) shall offer the plan through the ex18 change established by the State for the market 

19 in which the plan is being offered; and 

20 ‘‘(B) may offer such plan outside of an ex21 change. 

22 ‘‘(2) OFFERORS MUST OFFER PLANS IN SILVER

23 AND GOLD PLANS.—An offeror of a qualified health 

24 benefits plan in the individual or small group market 

25 within a State— 


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1 ‘‘(A) shall offer within that market at least 

2 one qualified health benefits plan in the silver 

3 coverage level and at least one such plan in the 

4 gold coverage level; and 

5 ‘‘(B) may offer 1 or more qualified health 

6 benefits plan in the bronze and platinum cov7 erage levels, a catastrophic plan described in 

8 section 2243(c), or a child-only plan described 

9 in section 2243(d). 

10 ‘‘(c) RESPONSIBILITY OF EXCHANGES.— 

11 ‘‘(1) IN GENERAL.—Each exchange offering 

12 plans in the individual or small group market within 

13 a State shall offer all qualified health benefits plans 

14 in the State that are licensed by the State to be of15 fered in that market. 

16 ‘‘(2) OFFERING OF STAND-ALONE DENTAL

17 BENEFITS.— 

18 ‘‘(A) IN GENERAL.—Each exchange within 

19 a State shall allow an offeror of a health bene20 fits plan that only provides limited scope dental 

21 benefits meeting the requirements of section 

22 9832(c)(2)(A) of the Internal Revenue Code of 

23 1986 to offer the plan through the exchange 

24 (either separately or in conjunction with a 

25 qualified health benefits plan) if the plan proVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00082 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 vides pediatric dental benefits meeting the re2 quirements of 2242(b)(11) for individuals who 

3 have not attained the age of 21. 

4 ‘‘(B) ELIGIBILITY FOR CREDIT AND SUB5 SIDY.—If an individual enrolls in both a quali6 fied health benefits plan and a plan described 

7 in subparagraph (A) for any plan year, the por8 tion of the premium for the plan described in 

9 subparagraph (A) that (under regulations pre10 scribed by the Secretary) is properly allocable 

11 to individuals covered by the plan who have not 

12 attained the age of 21 before the beginning of 

13 the plan year shall be treated as a premium 

14 payable for a qualified health benefits plan for 

15 purposes of determining the amount of the pre16 mium credit under section 36B of such Code 

17 and cost-sharing subsidies under section 2237 

18 with respect to the plan year. 

19 ‘‘(d) ENROLLMENT THROUGH AGENTS OR BRO20 KERS.—The Secretary shall establish procedures under 

21 which a State is required to allow agents or brokers— 

22 ‘‘(1) to enroll individuals in any qualified health 

23 benefits plans in the individual or small group mar24 ket as soon as the plan is offered through an ex25 change in the State; and 


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1 ‘‘(2) to assist individuals in applying for pre2 mium credits and cost-sharing subsidies for plans 

3 sold through an exchange. 

4 ‘‘SEC. 2232. QUALIFIED INDIVIDUALS AND SMALL EMPLOY5 ERS; ACCESS LIMITED TO CITIZENS AND LAW6 FUL RESIDENTS. 

7 ‘‘(a) QUALIFIED INDIVIDUALS.—In this title: 

8 ‘‘(1) IN GENERAL.—The term ‘qualified indi9 vidual’ means, with respect to an exchange, an indi10 vidual who— 

11 ‘‘(A) is seeking to enroll in a qualified 

12 health benefits plan in the individual market of13 fered through the exchange; and 

14 ‘‘(B) resides in the State that established 

15 the exchange. 

16 ‘‘(2) INCARCERATED INDIVIDUALS EX17 CLUDED.—An individual shall not be treated as a 

18 qualified individual if, at the time of enrollment, the 

19 individual is incarcerated, other than incarceration 

20 pending the disposition of charges. 

21 ‘‘(b) QUALIFIED SMALL EMPLOYER.—In this title, 

22 the term ‘qualified small employer’ means an employer 

23 that is a small employer that elects to make all full-time 

24 employees of such employer eligible for 1 or more qualified 

25 health benefits plans offered through an exchange estabVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 lished under this subtitle that offers qualified health bene2 fits plans in the small group market. 

3 ‘‘(c) ACCESS LIMITED TO LAWFUL RESIDENTS.—If 

4 an individual is not, or is not reasonably expected to be 

5 for the entire plan year for which enrollment is sought, 

6 a citizen or national of the United States, an alien lawfully 

7 admitted to the United States for permanent residence, 

8 or an alien lawfully present in the United States— 

9 ‘‘(1) the individual shall not be treated as a 

10 qualified individual and may not be covered under a 

11 qualified health benefits plan in the individual mar12 ket that is offered through an exchange; and 

13 ‘‘(2) if the individual is an employee of a quali14 fied small employer offering employees the oppor15 tunity to enroll in a qualified health benefits plan in 

16 the small group market through an exchange (or an 

17 individual bearing a relationship to such an em18 ployee that entitles such individual to coverage 

19 under such plan), the individual may not be covered 

20 under such plan. 

21 ‘‘Subpart 2—Establishment of Exchanges 

22 ‘‘SEC. 2235. ESTABLISHMENT OF EXCHANGES BY STATES. 

23 ‘‘(a) IN GENERAL.—Each State shall, not later than 

24 July 1, 2013, establish — 


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1 ‘‘(1) an exchange for the State that is designed 

2 to facilitate the enrollment of qualified individuals in 

3 qualified health benefits plans offered in the indi4 vidual market in the State; and 

5 ‘‘(2) a Small Business Health Options Program 

6 (in this title referred to as a ‘SHOP exchange’) that 

7 is designed to assist qualified small employers in fa8 cilitating the enrollment of their employees in quali9 fied health benefits plans offered in either the indi10 vidual or the small group market in the State. 

11 ‘‘(b) STATE FLEXIBILITY.— 

12 ‘‘(1) MERGER OF INDIVIDUAL AND SHOP EX13 CHANGES.—A State may elect to provide only one 

14 exchange in the State for providing both exchange 

15 and SHOP exchange services to both qualified indi16 viduals and qualified small employers, but only if the 

17 exchange has separate resources to assist individuals 

18 and employers. 

19 ‘‘(2) REGIONAL EXCHANGES.—An exchange or 

20 SHOP exchange may operate in more than 1 State 

21 if— 

22 ‘‘(A) each of the States agrees to the oper23 ation of the exchange in that State; and 

24 ‘‘(B) the Secretary approves of the oper25 ation of the exchange in all such States. 


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1 ‘‘(3) AUTHORITY TO CONTRACT FOR EXCHANGE

2 SERVICES.— 

3 ‘‘(A) CONTRACT WITH SUB-EXCHANGE.— 

4 Subject to such conditions and restrictions as 

5 the Secretary, in consultation with the Sec6 retary of the Treasury, may prescribe under 

7 sections 2238 and 2248— 

8 ‘‘(i) IN GENERAL.—A State may elect 

9 to authorize an exchange established by 

10 the State under this title to contract with 

11 an eligible entity to carry out 1 or more re12 sponsibilities of the exchange, including 

13 marketing and sale of qualified health ben14 efits plans offered by the exchange, enroll15 ment activities, broker relations, customer 

16 service, customer education, premium bill17 ing and collection, member advocacy with 

18 qualified health benefits plans, maintaining 

19 call center support, and performing the du20 ties of the exchange under section 2238 in 

21 determining eligibility to participate in the 

22 exchange and to receive any credit or sub23 sidy. An eligible entity may charge an ad24 ditional fee to be used to pay the adminisVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 trative and operational expenses of the en2 tity. 

3 ‘‘(ii) ELIGIBLE ENTITY.—In this sub4 paragraph, the term ‘eligible entity’ means 

5 a person— 

6 ‘‘(I) incorporated under, and sub7 ject to the laws of, 1 or more States; 

8 ‘‘(II) that has demonstrated ex9 perience on a State or regional basis 

10 in the individual and small group 

11 health insurance and benefits cov12 erage; and 

13 ‘‘(III) that is not a health insur14 ance issuer or that is treated under 

15 subsection (a) or (b) of section 52 as 

16 a member of the same controlled 

17 group of corporations (or under com18 mon control with) a health insurance 

19 issuer. 

20 ‘‘(B) DELEGATION TO STATE MEDICAID

21 AGENCY.—A State may elect to authorize an 

22 exchange established by the State under this 

23 title to enter into an agreement with the State 

24 medicaid agency under title XIX to carry out 

25 the responsibilities of the exchange under this 


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1 section in establishing the eligibility of individ2 uals to participate in the exchange and to re3 ceive the premium credit under section 36B of 

4 the Internal Revenue Code of 1986 and the 

5 cost-sharing subsidy under section 2247. An ex6 change may enter into an agreement under this 

7 subparagraph only if the agreement meets re8 quirements promulgated by the Secretary (after 

9 consultation with the Secretary of the Treas10 ury) ensuring that the agreement lowers overall 

11 administrative costs and reduces the likelihood 

12 of eligibility errors and disruptions in coverage. 

13 ‘‘(c) ESTABLISHMENT OF BROKER RATE SCHED14 ULES.—Each State shall provide for the establishment of 

15 rate schedules for broker commissions paid by health ben16 efits plans offered through an exchange. 

17 ‘‘(d) OFFERING OF PLANS IN LARGE GROUP MAR18 KET.—Beginning in 2017, each State may allow offerors 

19 of health benefits plans in the large group market in the 

20 State to offer the plans through an exchange. Nothing in 

21 this subsection shall be construed as requiring an offeror 

22 to offer such plans through an exchange. 

23 ‘‘(e) INTERIM EXCHANGES BEFORE QUALIFIED

24 PLANS.— 


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1 ‘‘(1) IN GENERAL.—Each State shall, as soon 

2 as practicable after the date of enactment of this 

3 Act, establish an exchange through which enrollment 

4 in eligible health insurance coverage is offered for 

5 coverage during the period beginning January 1, 

6 2010, and ending June 30, 2013. Each State may 

7 use the database established under paragraph 

8 (2)(C)(ii) in the operation of the exchange. 

9 ‘‘(2) ELIGIBLE HEALTH INSURANCE COV10 ERAGE.—In this subsection: 

11 ‘‘(A) IN GENERAL.—The term ‘eligible 

12 health insurance coverage’ means, with respect 

13 to any State, any health insurance coverage 

14 meeting the requirements of section 2244 which 

15 is offered— 

16 ‘‘(i) by an issuer who is licensed to 

17 offer such coverage in that State; and 

18 ‘‘(ii) in the individual or small group 

19 markets within the State. 

20 ‘‘(B) EXCEPTION FOR MINI-MEDICAL

21 PLANS.—Such term shall not include any health 

22 insurance coverage which, as determined under 

23 regulations prescribed by the Secretary, offers 

24 limited benefits or has a low annual limitation 

25 on the amount of benefits provided. 


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1 ‘‘(C) ADMINISTRATION.— 

2 ‘‘(i) IN GENERAL.—The Secretary 

3 shall provide technical assistance to each 

4 State in establishing exchanges under this 

5 subsection. 

6 ‘‘(ii) DATABASE OF PLAN OFFER7 INGS.—The Secretary, either directly or by 

8 grant or contract with a private entity, 

9 shall establish and maintain a database of 

10 health insurance coverage in the individual 

11 and small group markets. The Secretary 

12 shall ensure that individuals and small em13 ployers are able to access the information 

14 in the database that is specific to the State 

15 in which the individuals and employees re16 side. 

17 ‘‘SEC. 2236. FUNCTIONS PERFORMED BY SECRETARY, 

18 STATES, AND EXCHANGES. 

19 ‘‘(a) AGREEMENTS TO PERFORM FUNCTIONS.—The 

20 Secretary shall enter into an agreement with each State 

21 (in this section referred to as the ‘agreement’) setting 

22 forth which of the functions described in this section with 

23 respect to an exchange shall be performed by the Sec24 retary, the State, or the exchange. 


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1 ‘‘(b) CERTIFICATION OF PLANS.—The agreement 

2 shall provide for the State to establish procedures for the 

3 certification, recertification, and decertification of a health 

4 benefits plan as a qualified health benefits plan that meets 

5 the requirements of this title for offering the plan through 

6 exchanges within the State. 

7 ‘‘(c) OUTREACH AND ELIGIBILITY.—The agreement 

8 shall provide for the conduct of the following activities: 

9 ‘‘(1) OUTREACH.— 

10 ‘‘(A) IN GENERAL.—The establishment 

11 and carrying out of a plan to conduct outreach 

12 activities to inform and educate individuals and 

13 employers about the exchange, the annual open 

14 enrollment periods described in subsection 

15 (d)(2), and options for qualified health benefits 

16 plans offered through the exchange. 

17 ‘‘(B) CALL CENTERS.—The establishment 

18 and maintenance of call centers to provide in19 formation to, and answer questions from, indi20 viduals seeking to enroll in qualified health ben21 efit plans through an exchange, including pro22 viding multilingual assistance and mailing of 

23 relevant information to individuals based on 

24 their inquiry and zip code. 


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1 ‘‘(C) INTERNET PORTALS.—The develop2 ment of a model template for an Internet portal 

3 to be used to direct qualified individuals and 

4 qualified small employers to qualified health 

5 benefits plans, to assist individuals and employ6 ers in determining whether they are eligible to 

7 participate in an exchange or eligible for a pre8 mium credit or cost-sharing subsidy, and to 

9 present standardized information regarding 

10 qualified health benefits plans offered through 

11 an exchange to enable easier consumer choice. 

12 Such template shall include with respect to each 

13 qualified health benefits plan offered through 

14 the exchange in each rating area access to the 

15 uniform outline of coverage the plan is required 

16 to provide under section 2205 and to a copy of 

17 the plan’s policy. 

18 ‘‘(D) RATING SYSTEM.—The establishment 

19 of a rating system that would rate qualified 

20 health benefits plans offered through an ex21 change on the basis of the relative quality and 

22 price of plans in the same benefit level. The ex23 change shall include the quality rating in the 

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1 ers through the Internet portal established 

2 under subparagraph (C). 

3 ‘‘(2) ELIGIBILITY.—Subject to section 2238, 

4 the making of timely determinations as to whether— 

5 ‘‘(A) individuals or employers are qualified 

6 individuals or qualified small employers eligible 

7 to participate in the exchange; and 

8 ‘‘(B) an individual is disqualified from par9 ticipation in the exchange or from receiving any 

10 premium credit or cost-sharing subsidy because 

11 the individual is not, or is not reasonably ex12 pected to be for the entire plan year for which 

13 enrollment is sought, a citizen or national of the 

14 United States, an alien lawfully admitted to the 

15 United States for permanent residence, or an 

16 alien lawfully present in the United States. 

17 ‘‘(d) ENROLLMENT.—The agreement shall provide 

18 for the establishment and carrying out of an enrollment 

19 process which— 

20 ‘‘(1) provides for enrollment in person, by mail, 

21 by telephone, or electronically, including— 

22 ‘‘(A) through enrollment in local hospitals 

23 and schools, State motor vehicle offices, local 

24 Social Security offices, locations operated by In25 dian tribes and tribal organizations, and any 


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1 other accessible locations specified by the ex2 change; and 

3 ‘‘(B) through use of the call center and 

4 Web portal established under subsection (c)(1); 

5 ‘‘(2) provides for— 

6 ‘‘(A) an initial open enrollment period 

7 from March 1, 2013, through May 31, 2013; 

8 ‘‘(B) annual open enrollment periods from 

9 March 1 through May 31 of subsequent cal10 endar years; 

11 ‘‘(C) special enrollment periods specified in 

12 section 9801 of the Internal Revenue Code of 

13 1986 and other special enrollment periods 

14 under circumstances similar to such periods 

15 under part D of title XVIII; and 

16 ‘‘(D) special monthly enrollment periods 

17 for Indians (as defined in section 4 of the In18 dian Health Care Improvement Act). 

19 ‘‘(3) subject to section 2239— 

20 ‘‘(A) establishes a uniform enrollment form 

21 that qualified individuals and qualified small 

22 businesses may use (either electronically or on 

23 paper) in enrolling in qualified health benefits 

24 plans offered through an exchange, and that 

25 takes into account criteria that the National 


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1 Association of Insurance Commissioners devel2 ops and submits to the Secretary; and 

3 ‘‘(B) informs individuals of eligibility re4 quirements for the medicaid program under 

5 title XIX, the CHIP program under title XXI, 

6 or any applicable State or local public program 

7 and refers individuals to such programs if a de8 termination is made that the individuals are so 

9 eligible; 

10 ‘‘(4) establishes standardized marketing re11 quirements that are based on the standards used for 

12 Medicare Advantage plans and ensures that mar13 keting practices with respect to qualified health ben14 efits plans offered through the exchange meet the re15 quirements; and 

16 ‘‘(5) provides for a standardized format for pre17 senting health benefits plan options in the exchange, 

18 including use of the uniform outline of coverage es19 tablished under section 1503 of the America’s 

20 Healthy Future Act of 2009. 

21 ‘‘(e) ELIGIBILITY FOR CREDIT AND SUBSIDY.—The 

22 agreement shall provide for the establishment and use of 

23 a calculator to determine the actual cost of coverage after 

24 application of any premium credit or cost-sharing subsidy 

25 and the carrying out of responsibilities under section 2248 


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1 with respect to the advance determination and payment 

2 of such credits or subsidies. 

3 ‘‘(f) CERTIFICATION OF EXEMPTION FROM INDI4 VIDUAL RESPONSIBILITY EXCISE TAX .—Subject to sec5 tion 2238, the agreement shall establish procedures for— 

6 ‘‘(1) granting a certification attesting that, for 

7 purposes of the individual responsibility excise tax 

8 under section 5000A of the Internal Revenue Code 

9 of 1986, an individual is exempt from the individual 

10 requirement or from the tax imposed by such section 

11 because— 

12 ‘‘(A) there is no affordable qualified health 

13 benefits plan available through the exchange, or 

14 the individual’s employer, covering the indi15 vidual; or 

16 ‘‘(B) the individual meets the requirements 

17 for any other such exemption from the indi18 vidual responsibility requirement or tax; and 

19 ‘‘(2) transferring to the Secretary of the Treas20 ury or the Secretary’s delegate a list of the individ21 uals who are so exempt. 

22 The Secretary shall establish the period for which any cer23 tification under this subsection is in effect. 


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1 ‘‘SEC. 2237. DUTIES OF THE SECRETARY TO FACILITATE EX2 CHANGES. 

3 ‘‘(a) CREDIT AND SUBSIDY DETERMINATIONS.—The 

4 Secretary and the Secretary of the Treasury shall carry 

5 out the responsibilities under section 2248 (relating to ad6 vance determination and payment of premium credit and 

7 cost-sharing subsidies) that are delegated specifically to 

8 the Secretary and the Secretary of the Treasury. 

9 ‘‘(b) SHOP EXCHANGE ASSISTANCE.—The Sec10 retary shall designate an office within the Department of 

11 Health and Human Services to provide technical assist12 ance to States to facilitate the participation of qualified 

13 small businesses in SHOP exchanges. 

14 ‘‘(c) FUNDING OF START-UP COSTS.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall pay to 

16 each State the amount the Secretary reasonably esti17 mates to be the unreimbursed start-up costs for any 

18 exchange or SHOP exchange established within a 

19 State. The Secretary shall make separate payments 

20 for the start-up costs of the interim and permanent 

21 exchanges. 

22 ‘‘(2) OPERATIONAL COSTS.—No payments shall 

23 be made under this subsection for any operational 

24 costs of an exchange after the initial start-up is 

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1 fied health benefits plan offered through the ex2 change its proportional share of such costs. 

3 ‘‘SEC. 2238. PROCEDURES FOR DETERMINING ELIGIBILITY 

4 FOR EXCHANGE PARTICIPATION, PREMIUM 

5 CREDITS AND COST-SHARING SUBSIDIES, 

6 AND INDIVIDUAL RESPONSIBILITY EXEMP7 TIONS. 

8 ‘‘(a) IN GENERAL.—The Secretary shall establish a 

9 program meeting the requirements of this section for de10 termining— 

11 ‘‘(1) whether an individual who is to be covered 

12 by a qualified health benefits plan offered through 

13 an exchange, or who is claiming a premium credit or 

14 cost-sharing subsidy, meets the requirements of sec15 tions 2236(c)(2)(B) and 2247(e) of this title and 

16 section 36B(e) of the Internal Revenue Code of 

17 1986 that the individual be a citizen or national of 

18 the United States, an alien lawfully admitted to the 

19 United States for permanent residence, or an alien 

20 lawfully present in the United States; 

21 ‘‘(2) in the case of an individual claiming a pre22 mium credit or cost-sharing subsidy under section 

23 36B of such Code or section 2247— 


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1 ‘‘(A) whether the individual meets the in2 come and coverage requirements of such sec3 tions; and 

4 ‘‘(B) the amount of the credit or subsidy; 

5 ‘‘(3) whether an individual’s coverage under an 

6 employer-sponsored health benefits plan is treated as 

7 unaffordable under sections 36B(c)(2)(C), 

8 4980H(c)(2), and 5000A(e)(2); and 

9 ‘‘(4) whether to grant a certification under sec10 tion 2237(f) attesting that, for purposes of the indi11 vidual responsibility excise tax under section 5000A 

12 of the Internal Revenue Code of 1986, an individual 

13 is entitled to an exemption from either the individual 

14 responsibility requirement or the tax imposed by 

15 such section. 

16 ‘‘(b) INFORMATION REQUIRED TO BE PROVIDED BY

17 APPLICANTS.— 

18 ‘‘(1) IN GENERAL.—An applicant for enrollment 

19 in a qualified health benefits plan offered through an 

20 exchange shall provide— 

21 ‘‘(A) the name, address, and date of birth 

22 of each individual who is to be covered by the 

23 plan (in this subsection referred to as an ‘en24 rollee’); and 


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1 ‘‘(B) the information required by any of 

2 the following paragraphs that is applicable to 

3 an enrollee. 

4 ‘‘(2) CITIZENSHIP OR IMMIGRATION STATUS.— 

5 The following information shall be provided with re6 spect to every enrollee: 

7 ‘‘(A) In the case of an enrollee whose eligi8 bility is based on an attestation of citizenship of 

9 the enrollee, the enrollee’s social security num10 ber. 

11 ‘‘(B) In the case of an individual whose eli12 gibility is based on an attestation of the enroll13 ee’s immigration status, the enrollee’s social se14 curity number (if applicable) and such identi15 fying information with respect to the enrollee’s 

16 immigration status as the Secretary, after con17 sultation with the Secretary of Homeland Secu18 rity, determines appropriate. 

19 ‘‘(3) ELIGIBILITY AND AMOUNT OF CREDIT OR

20 SUBSIDY.—In the case of an enrollee with respect to 

21 whom a premium credit or cost-sharing subsidy 

22 under section 36B of such Code or section 2247 is 

23 being claimed, the following information: 

24 ‘‘(A) INFORMATION REGARDING INCOME

25 AND FAMILY SIZE.—The information described 


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1 in section 6103(l)(21) for the taxable year end2 ing with or within the second calendar year pre3 ceding the calendar year in which the plan year 

4 begins. 

5 ‘‘(B) CHANGES IN CIRCUMSTANCES.—The 

6 information described in section 2248(b)(2), in7 cluding information with respect to individuals 

8 who were not required to file an income tax re9 turn for the taxable year described in subpara10 graph (A) or individuals who experienced 

11 changes in marital status or family size or sig12 nificant reductions in income. 

13 ‘‘(4) EMPLOYER-SPONSORED COVERAGE.—In 

14 the case of an enrollee with respect to whom eligi15 bility for a premium credit under section 36B of 

16 such Code or cost-sharing subsidy under section 

17 2247, is being established on the basis that the en18 rollee’s (or related individual’s) employer is not 

19 treated under section 36B(c)(2)(C) of such Code as 

20 providing essential benefits coverage or affordable 

21 essential benefits coverage, the following informa22 tion: 

23 ‘‘(A) The name, address, and employer 

24 identification number (if available) of the em25 ployer. 


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1 ‘‘(B) Whether the enrollee or individual is 

2 a full-time employee and whether the employer 

3 provides such essential benefits coverage. 

4 ‘‘(C) If the employer provides such essen5 tial benefits coverage, the lowest cost option for 

6 the enrollee’s or individual’s enrollment status 

7 and the enrollee’s or individual’s required con8 tribution (as defined in section 5000A(e)(2) of 

9 such Code) under the employer-sponsored plan. 

10 ‘‘(D) If an enrollee claims an employer’s 

11 essential benefits coverage is unaffordable, the 

12 information described in paragraph (3). 

13 ‘‘(5) EXEMPTIONS FROM INDIVIDUAL RESPON14 SIBILITY REQUIREMENTS.—In the case of an indi15 vidual who is seeking an exemption certificate under 

16 section 2237(f) from any requirement or tax im17 posed by section 5000A, the following information: 

18 ‘‘(A) In the case of an individual seeking 

19 exemption based on the individual’s status as a 

20 member of an exempt religious sect or division, 

21 as a member of a health care sharing ministry, 

22 as an Indian, or as an individual eligible for a 

23 hardship exemption, such information as the 

24 Secretary shall prescribe. 


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1 ‘‘(B) In the case of an individual seeking 

2 exemption based on the lack of affordable cov3 erage or the individual’s status as a taxpayer 

4 with household income less than 100 percent of 

5 the poverty line, the information described in 

6 paragraphs (3) and (4), as applicable. 

7 ‘‘(c) VERIFICATION OF INFORMATION CONTAINED IN

8 RECORDS OF SPECIFIC FEDERAL OFFICIALS.— 

9 ‘‘(1) INFORMATION TRANSFERRED TO SEC10 RETARY.—An exchange shall submit the information 

11 provided by an applicant under subsection (b) to the 

12 Secretary for verification in accordance with the re13 quirements of this subsection and subsection (d). 

14 ‘‘(2) CITIZENSHIP OR IMMIGRATION STATUS.— 

15 ‘‘(A) COMMISSIONER OF SOCIAL SECU16 RITY.—The Secretary shall submit to the Com17 missioner of Social Security the following infor18 mation for a determination as to whether the 

19 information provided is consistent with the in20 formation in the records of the Commissioner: 

21 ‘‘(i) The name, date of birth, and so22 cial security number of each individual for 

23 whom such information was provided 

24 under subsection (b)(2). 


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1 ‘‘(ii) The attestation of an individual 

2 that the individual is a citizen. 

3 ‘‘(B) SECRETARY OF HOMELAND SECU4 RITY.— 

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

6 individual— 

7 ‘‘(I) who attests that the indi8 vidual is an alien lawfully admitted to 

9 the United States for permanent resi10 dence or an alien lawfully present in 

11 the United States; or 

12 ‘‘(II) who attests that the indi13 vidual is a citizen but with respect to 

14 whom the Commissioner of Social Se15 curity has notified the Secretary 

16 under subsection (e)(3) that the attes17 tation is inconsistent with information 

18 in the records maintained by the 

19 Commissioner; 

20 the Secretary shall submit to the Secretary 

21 of Homeland Security the information de22 scribed in clause (ii) for a determination as 

23 to whether the information provided is con24 sistent with the information in the records 

25 of the Secretary of Homeland Security. 


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1 ‘‘(ii) INFORMATION.—The information 

2 described in clause (ii) is the following: 

3 ‘‘(I) The name, date of birth, and 

4 any identifying information with re5 spect to the individual’s immigration 

6 status provided under subsection 

7 (b)(2). 

8 ‘‘(II) The attestation that the in9 dividual is an alien lawfully admitted 

10 to the United States for permanent 

11 residence or an alien lawfully present 

12 in the United States or in the case of 

13 an individual described in clause 

14 (i)(II), the attestation that the indi15 vidual is a citizen. 

16 ‘‘(3) ELIGIBILITY FOR CREDIT AND SUBSIDY.— 

17 The Secretary shall submit the information de18 scribed in subsection (b)(3)(A) provided under para19 graph (3), (4), or (5) of subsection (b) to the Sec20 retary of the Treasury for verification of household 

21 income and family size for purposes of eligibility. 

22 ‘‘(4) METHOD.—The Secretary, in consultation 

23 with the Secretary of the Treasury, the Secretary of 

24 Homeland Security, and the Commissioner of Social 


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1 Security, shall provide that verifications and deter2 minations under this subsection shall be done— 

3 ‘‘(A) through use of an on-line system or 

4 otherwise for the electronic submission of, and 

5 response to, the information submitted under 

6 this subsection with respect to an applicant; or 

7 ‘‘(B) by determining the consistency of the 

8 information submitted with the information 

9 maintained in the records of the Secretary of 

10 the Treasury, the Secretary of Homeland Secu11 rity, or the Commissioner of Social Security 

12 through such other method as is approved by 

13 the Secretary. 

14 ‘‘(d) VERIFICATION BY SECRETARY.—In the case of 

15 information provided under subsection (b) that is not sub16 ject to verification under subsection (c), the Secretary 

17 shall verify the accuracy of such information in such man18 ner as the Secretary determines appropriate, including 

19 delegating responsibility for verification to the exchange. 

20 ‘‘(e) ACTIONS RELATING TO VERIFICATION.— 

21 ‘‘(1) IN GENERAL.—Each person to whom the 

22 Secretary provided information under subsection (c) 

23 shall report to the Secretary under the method es24 tablished under subsection (c)(4) the results of its 

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1 change of such results. Each person to whom the 

2 Secretary provided information under subsection (d) 

3 shall report to the Secretary in such manner as the 

4 Secretary determines appropriate. 

5 ‘‘(2) VERIFICATION.— 

6 ‘‘(A) ELIGIBILITY FOR ENROLLMENT AND

7 SUBSIDIES.—If information provided by an ap8 plicant under paragraphs (1), (2), (3), and (4) 

9 of subsection (b) is verified under subsections 

10 (c) and (d)— 

11 ‘‘(i) the individual’s eligibility to enroll 

12 through the exchange and to apply for pre13 mium credits and cost-sharing subsidies 

14 shall be satisfied; and 

15 ‘‘(ii) the Secretary shall, if applicable, 

16 notify the Secretary of the Treasury under 

17 section 2248(c) of the amount of any ad18 vance payment to be made. 

19 ‘‘(B) EXEMPTION FROM INDIVIDUAL RE20 SPONSIBILITY.—If information provided by an 

21 applicant under subsection (b)(5) is verified 

22 under subsections (c) and (d), the Secretary 

23 shall issue the certification of exemption de24 scribed in section 2236(f). 


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1 ‘‘(3) INCONSISTENCIES.—If the information 

2 provided by an applicant is inconsistent with infor3 mation in the records maintained by persons under 

4 subsection (c) or is not verified under subsection (d), 

5 the Secretary shall notify the exchange and the ex6 change shall take the following actions: 

7 ‘‘(A) REASONABLE EFFORT.—The ex8 change shall make a reasonable effort to iden9 tify and address the causes of such inconsist10 ency, including through typographical or other 

11 clerical errors, by contacting the applicant to 

12 confirm the accuracy of the information, and by 

13 taking such additional actions as the Secretary, 

14 through regulation or other guidance, may iden15 tify. 

16 ‘‘(B) NOTICE AND OPPORTUNITY TO COR17 RECT.—In the case the inconsistency or inabil18 ity to verify is not resolved under subparagraph 

19 (A), the exchange shall— 

20 ‘‘(i) notify the applicant of such fact; 

21 ‘‘(ii) provide the applicant with a rea22 sonable period from the date on which the 

23 notice required under clause (i) is received 

24 by the applicant to either present satisfac25 tory documentary evidence or resolve the 


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1 inconsistency with the person verifying the 

2 information under subsection (c). 

3 ‘‘(4) SPECIFIC ACTIONS.— 

4 ‘‘(A) CITIZENSHIP OR IMMIGRATION STA5 TUS.—If an inconsistency involving citizenship 

6 or immigration status with respect to any en7 rollee is unresolved under this subsection, the 

8 exchange shall notify the applicant that the en9 rollee is not eligible to participate in the ex10 change. 

11 ‘‘(B) ELIGIBILITY OR AMOUNT OF CREDIT

12 OR SUBSIDY.—If an inconsistency involving the 

13 eligibility for, or amount of, any credit or sub14 sidy is unresolved under this subsection, the ex15 change shall notify the applicant of the amount 

16 (if any) of the credit or subsidy. 

17 ‘‘(C) EMPLOYER AFFORDABILITY.—If the 

18 Secretary notifies an exchange that an enrollee 

19 is eligible for a premium credit under section 

20 36B of such Code or cost-sharing subsidy under 

21 section 2247 because the enrollee’s (or related 

22 individual’s) employer does not provide essential 

23 benefits coverage through an employer-spon24 sored plan or that the employer does provide 

25 that coverage but it is not affordable coverage, 


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1 the exchange shall notify the employer of such 

2 fact and that the employer may be liable for the 

3 tax imposed by section 4980H with respect to 

4 an employee. 

5 ‘‘(D) EXEMPTION.—In any case where the 

6 inconsistency involving, or inability to verify, in7 formation provided under subsection (b)(5) is 

8 not resolved, the exchange shall notify an appli9 cant that no certification of exemption from any 

10 requirement or tax under section 5000A will be 

11 issued. 

12 ‘‘(E) APPEALS PROCESS.—The exchange 

13 shall also notify each person receiving notice 

14 under this paragraph of the appeals processes 

15 established under subsection (f). 

16 ‘‘(f) APPEALS AND REDETERMINATIONS.— 

17 ‘‘(1) IN GENERAL.—The Secretary, in consulta18 tion with the Secretary of the Treasury, the Sec19 retary of Homeland Security, and the Commissioner 

20 of Social Security, shall establish procedures by 

21 which the Secretary or one of such other Federal of22 ficers— 

23 ‘‘(A) hears and makes decisions with re24 spect to appeals of any determination under 

25 subsection (c); and 


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1 ‘‘(B) redetermines eligibility on a periodic 

2 basis in appropriate circumstances. 

3 ‘‘(2) EMPLOYER LIABILITY.—The Secretary 

4 shall establish a separate appeals process for em5 ployers who are notified under subsection (e)(4)(C) 

6 that the employer may be liable for the tax imposed 

7 by section 4980H with respect to an employee be8 cause of a determination that the employer does not 

9 provide essential benefits coverage through an em10 ployer-sponsored plan or that the employer does pro11 vide that coverage but it is not affordable coverage 

12 with respect to an employee. Such process shall pro13 vide an employer the opportunity to— 

14 ‘‘(A) present information to the exchange 

15 for review of the determination either by the ex16 change or the person making the determination, 

17 including evidence of the employer-sponsored 

18 plan and employer contributions to the plan; 

19 and 

20 ‘‘(B) have access to the data used to make 

21 the determination to the extent allowable by 

22 law. 

23 Such process shall be in addition to any rights of ap24 peal the employer may have under subtitle F of the 

25 Internal Revenue Code of 1986. 


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1 ‘‘(g) CONFIDENTIALITY OF APPLICANT INFORMA2 TION.—Any person who receives information provided by 

3 an applicant under subsection (b), or receives information 

4 from a Federal agency under subsection (c), (d), or (e) 

5 shall— 

6 ‘‘(1) use the information only for the purposes 

7 of, and to the extent necessary in, ensuring the effi8 cient operation of the exchange, including verifying 

9 the eligibility of an individual to enroll through an 

10 exchange or to claim a premium credit or cost-shar11 ing subsidy or the amount of the credit or subsidy; 

12 and 

13 ‘‘(2) not disclose the information to any other 

14 person except as provided in this section. 

15 ‘‘(h) PENALTIES.— 

16 ‘‘(1) FALSE OR FRAUDULENT INFORMATION.— 

17 ‘‘(A) CIVIL PENALTY.—If— 

18 ‘‘(i) any person fails to provides cor19 rect information under subsection (b); and 

20 ‘‘(ii) such failure is attributable to 

21 negligence or disregard of any rules or reg22 ulations of the Secretary, 

23 such person shall be subject, in addition to any 

24 other penalties that may be prescribed by law, 

25 to a civil penalty of not more than $25,000 with 


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1 respect to any failures involving an application 

2 for a plan year. For purposes of this subpara3 graph, the terms ‘negligence’ and ‘disregard’ 

4 shall have the same meanings as when used in 

5 section 6662 of the Internal Revenue Code of 

6 1986. 

7 ‘‘(B) CRIMINAL PENALTY.—Any person 

8 who knowingly and willfully provides false or 

9 fraudulent information under subsection (b) 

10 shall be guilty of a felony, and upon conviction 

11 thereof, shall be fined not more than $250,000, 

12 imprisoned for not more than 5 years, or both. 

13 ‘‘(2) IMPROPER USE OR DISCLOSURE OF INFOR14 MATION.—Any person who knowingly and willfully 

15 uses or discloses information in violation of sub16 section (g) shall be guilty of a felony, and upon con17 viction thereof, shall be fined not more than 

18 $25,000, imprisoned for not more than 5 years, or 

19 both. 

20 ‘‘SEC. 2239. STREAMLINING OF PROCEDURES FOR ENROLL21 MENT THROUGH AN EXCHANGE AND STATE 

22 MEDICAID, CHIP, AND HEALTH SUBSIDY PRO23 GRAMS. 

24 ‘‘(a) IN GENERAL.—The Secretary shall establish a 

25 system meeting the requirements of this section under 


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1 which residents of each State may apply for enrollment 

2 in, receive a determination of eligibility for participation 

3 in, and continue participation in, applicable State health 

4 subsidy programs. 

5 ‘‘(b) REQUIREMENTS RELATING TO FORMS AND NO6 TICE.— 

7 ‘‘(1) REQUIREMENTS RELATING TO FORMS.— 

8 ‘‘(A) IN GENERAL.—The Secretary shall 

9 develop and provide to each State a single, 

10 streamlined form that— 

11 ‘‘(i) may be used to apply for all ap12 plicable State health subsidy programs 

13 within the State; 

14 ‘‘(ii) may be filed online, in person, by 

15 mail, or by telephone; 

16 ‘‘(iii) may be filed with an exchange 

17 or with State officials operating one of the 

18 other applicable State health subsidy pro19 grams; and 

20 ‘‘(iv) is structured to maximize an ap21 plicant’s ability to complete the form satis22 factorily, taking into account the charac23 teristics of individuals who qualify for ap24 plicable State health subsidy programs. 


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1 ‘‘(B) STATE AUTHORITY TO ESTABLISH

2 FORM.—A State may develop and use its own 

3 single, streamlined form as an alternative to the 

4 form developed under subparagraph (A) if the 

5 alternative form is consistent with standards 

6 promulgated by the Secretary under this sec7 tion. 

8 ‘‘(C) SUPPLEMENTAL ELIGIBILITY

9 FORMS.—The Secretary may allow a State to 

10 use a supplemental or alternative form in the 

11 case of individuals who apply for eligibility that 

12 is not determined on the basis of the household 

13 income (as defined in section 36B of the Inter14 nal Revenue Code of 1986). 

15 ‘‘(2) NOTICE.—The Secretary shall provide that 

16 an applicant filing a form under paragraph (1) shall 

17 receive notice of eligibility for an applicable State 

18 health subsidy program without any need to provide 

19 additional information or paperwork unless such in20 formation or paperwork is specifically required by 

21 law when information provided on the form is incon22 sistent with data used for the electronic verification 

23 under paragraph (3) or is otherwise insufficient to 

24 determine eligibility. 


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1 ‘‘(c) REQUIREMENTS RELATING TO ELIGIBILITY

2 BASED ON DATA EXCHANGES.— 

3 ‘‘(1) DEVELOPMENT OF SECURE INTER4 FACES.—Each State shall develop for all applicable 

5 State health subsidy programs a secure, electronic 

6 interface allowing an exchange of data (including in7 formation contained in the application forms de8 scribed in subsection (b)) that allows a determina9 tion of eligibility for all such programs based on a 

10 single application. Such interface shall be compatible 

11 with the exchange method established for data 

12 verification under section 2238(c)(4). 

13 ‘‘(2) DATA MATCHING PROGRAM.—Each appli14 cable State health subsidy program shall participate 

15 in a data matching arrangement for determining eli16 gibility for participation in the program under para17 graph (3) that— 

18 ‘‘(A) provides access to data described in 

19 paragraph (3); 

20 ‘‘(B) applies only to individuals who— 

21 ‘‘(i) receive assistance from an appli22 cable State health subsidy program; or 

23 ‘‘(ii) apply for such assistance— 

24 ‘‘(I) by filing a form described in 

25 subsection (b); or 


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1 ‘‘(II) by requesting a determina2 tion of eligibility and authorizing dis3 closure of the information described in 

4 paragraph (3) to applicable State 

5 health coverage subsidy programs for 

6 purposes of determining and estab7 lishing eligibility; and 

8 ‘‘(C) consistent with standards promul9 gated by the Secretary, including the privacy 

10 and data security safeguards described in sec11 tion 1946 or that are otherwise applicable to 

12 such programs. 

13 ‘‘(3) DETERMINATION OF ELIGIBILITY.— 

14 ‘‘(A) IN GENERAL.—Each applicable State 

15 health subsidy program shall, to the maximum 

16 extent practicable— 

17 ‘‘(i) establish, verify, and update eligi18 bility for participation in the program 

19 using the data matching arrangement 

20 under paragraph (2); and 

21 ‘‘(ii) determine such eligibility on the 

22 basis of reliable, third party data, includ23 ing information described in sections 1137, 

24 453(i), and 1942(a), obtained through 

25 such arrangement. 


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1 ‘‘(B) EXCEPTION.—This paragraph shall 

2 not apply in circumstances with respect to 

3 which the Secretary determines that the admin4 istrative and other costs of use of the data 

5 matching arrangement under paragraph (2) 

6 outweigh its expected gains in accuracy, effi7 ciency, and program participation. 

8 ‘‘(4) SECRETARIAL STANDARDS.—The Sec9 retary shall, after consultation with persons in pos10 session of the data to be matched and representa11 tives of applicable State health subsidy programs, 

12 promulgate standards governing the timing, con13 tents, and procedures for data matching described in 

14 this subsection. Such standards shall take into ac15 count administrative and other costs and the value 

16 of data matching to the establishment, verification, 

17 and updating of eligibility for applicable State health 

18 subsidy programs. 

19 ‘‘(d) ADMINISTRATIVE AUTHORITY.— 

20 ‘‘(1) AGREEMENTS.—Subject to section 2238 

21 and section 6103(l)(21) of the Internal Revenue 

22 Code of 1986 and any other requirement providing 

23 safeguards of privacy and data integrity, the Sec24 retary may establish model agreements, and enter 


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1 into agreements, for the sharing of data under this 

2 section. 

3 ‘‘(2) AUTHORITY OF EXCHANGE TO CONTRACT

4 OUT.—Nothing in this section shall be construed 

5 to— 

6 ‘‘(A) prohibit contractual arrangements 

7 through which a State medicaid agency deter8 mines eligibility for all applicable State health 

9 subsidy programs, but only if such agency com10 plies with the Secretary’s requirements ensuring 

11 reduced administrative costs, eligibility errors, 

12 and disruptions in coverage; or 

13 ‘‘(B) change any requirement under title 

14 XIX that eligibility for participation in a 

15 State’s medicaid program must be determined 

16 by a public agency. 

17 ‘‘(e) APPLICABLE STATE HEALTH SUBSIDY PRO18 GRAM.—In this section, the term ‘applicable State health 

19 subsidy program’ means— 

20 ‘‘(1) the program under this title for the enroll21 ment in qualified health benefits plans offered 

22 through an exchange, including the premium credits 

23 under section 36B of the Internal Revenue Code of 

24 1986 and cost-sharing subsidies under section 2237; 

25 ‘‘(2) a State medicaid program under title XIX; 


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1 ‘‘(3) a State children’s health insurance pro2 gram (CHIP) under title XXI; and 

3 ‘‘(4) a State program under section 2228 estab4 lishing qualified basic health plans.’’. 

5 (b) STUDY OF ADMINISTRATION OF EMPLOYER RE6 SPONSIBILITY.— 

7 (1) IN GENERAL.—The Secretary of Health and 

8 Human Services shall, in consultation with the Sec9 retary of the Treasury, conduct a study of the proce10 dures that are necessary to ensure that in the ad11 ministration of part B of subtitle A of title XXII of 

12 the Social Security Act (as added by this section) 

13 and section 4980H of the Internal Revenue Code of 

14 1986 (as added by section 1306) that the following 

15 rights are protected: 

16 (A) The rights of employees to preserve 

17 their right to confidentiality of their taxpayer 

18 return information and their right to enroll in 

19 a qualified basic health benefits plan through 

20 an exchange if an employer does not provide af21 fordable coverage. 

22 (B) The rights of employers to adequate 

23 due process and access to information necessary 

24 to accurately determine any tax imposed on em25 ployers. 


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1 (2) REPORT.—Not later than July 1, 2012, the 

2 Secretary of Health and Human Services shall re3 port the results of the study conducted under para4 graph (1), including any recommendations for legis5 lative changes, to the Committees on Finance and 

6 Health, Education, Labor and Pensions of the Sen7 ate and the Committees of Education and Labor and 

8 Ways and Means of the House of Representatives. 

9 SEC. 1102. ENCOURAGING MEANINGFUL USE OF ELEC10 TRONIC HEALTH RECORDS. 

11 (a) STUDY.—The Secretary of Health and Human 

12 Services shall conduct a study of methods that can be em13 ployed by qualified health benefits plans offered through 

14 an exchange to encourage increased meaningful use of 

15 electronic health records by health care providers, includ16 ing— 

17 (1) payment systems established by qualified 

18 health benefit plans that provide higher rates of re19 imbursement for health care providers that engage 

20 in meaningful use of electronic health records; and 

21 (2) promotion of low-cost electronic health 

22 record software packages that are available for use 

23 by health care providers, including software pack24 ages that are available to health care providers 

25 through the Veterans Administration. 


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1 (b) REPORT.— 

2 (1) IN GENERAL.—Not later than 24 months 

3 after the date of enactment of this Act, the Sec4 retary shall submit to Congress a report containing 

5 the results of the study conducted under subsection 

6 (a), together with recommendations for such legisla7 tion and administrative action as the Secretary de8 termines appropriate, including recommendations re9 garding the feasibility and effectiveness of payment 

10 systems established by qualified health benefit plans 

11 offered through an exchange to provide for higher 

12 rates of reimbursement for health care providers 

13 that engage in meaningful use of electronic health 

14 records. 

15 (2) DISSEMINATION TO EXCHANGES.—Not later 

16 than 12 month after submitting the report under 

17 paragraph (1), the Secretary shall provide such re18 port to any regional exchange or exchange estab19 lished within a State. 


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1 Subtitle C—Making Coverage 

2 Affordable 

3 PART I—ESSENTIAL BENEFITS COVERAGE 

4 SEC. 1201. PROVISIONS TO ENSURE COVERAGE OF ESSEN5 TIAL BENEFITS. 

6 Title XXII of the Social Security Act (as added by 

7 section 1001 and amended by section 1101) is amended 

8 by adding at the end the following: 

9 ‘‘PART C—MAKING COVERAGE AFFORDABLE 

10 ‘‘Subpart 1—Essential Benefits Coverage 

11 ‘‘SEC. 2241. REQUIREMENTS FOR QUALIFIED HEALTH BEN12 EFITS PLAN. 

13 ‘‘A health benefits plan shall be treated as a qualified 

14 health benefits plan for purposes of this title only if— 

15 ‘‘(1) the plan provides an essential benefits 

16 package described in section 2242; 

17 ‘‘(2) subject to section 2243(c), the plan pro18 vides either the bronze, silver, gold, or platinum level 

19 of coverage described in section 2243; and 

20 ‘‘(3) the offeror of the plan charges the same 

21 premium rate for the plan without regard to whether 

22 the plan is purchased through an exchange or 

23 whether the plan is purchased directly from the of24 feror or through an agent. 


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1 ‘‘SEC. 2242. ESSENTIAL BENEFITS PACKAGE DEFINED. 

2 ‘‘(a) IN GENERAL.—In this division, the term ‘essen3 tial benefits package’ means, with respect to any health 

4 benefits plan, coverage that— 

5 ‘‘(1) provides payment for the items and serv6 ices described in subsection (b) in accordance with 

7 generally accepted standards of medical or other ap8 propriate clinical or professional practice; 

9 ‘‘(2) limits cost-sharing for such covered health 

10 care items and services in accordance with sub11 section (c); 

12 ‘‘(3) meets the requirements with respect to 

13 specific items and services described in subsection 

14 (d); and 

15 ‘‘(4) does not impose any annual or lifetime 

16 limit on the coverage of such covered health care 

17 items and services. 

18 ‘‘(b) MINIMUM SERVICES TO BE COVERED.—Subject 

19 to subsection (e), the items and services described in this 

20 subsection are the following: 

21 ‘‘(1) Hospitalization. 

22 ‘‘(2) Outpatient hospital and outpatient clinic 

23 services, including emergency department services. 

24 ‘‘(3) Professional services of physicians and 

25 other health professionals. 

26 ‘‘(4) Medical and surgical care. 


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1 ‘‘(5) Such services, equipment, and supplies in2 cident to the services of a physician’s or a health 

3 professional’s delivery of care in institutional set4 tings, physician offices, patients’ homes or place of 

5 residence, or other settings, as appropriate. 

6 ‘‘(6) Prescription drugs. 

7 ‘‘(7) Rehabilitative and habilitative services. 

8 ‘‘(8) Mental health and substance use disorder 

9 services, including behavioral health treatment. 

10 ‘‘(9) Preventive services, including those serv11 ices recommended with a grade of A or B by the 

12 United States Preventive Services Task Force and 

13 those vaccines recommended for use by the Advisory 

14 Committee on Immunization Practices (an advisory 

15 committee established by the Secretary, acting 

16 through the Director of the Centers for Disease 

17 Control and Prevention). 

18 ‘‘(10) Maternity benefits. 

19 ‘‘(11) Well baby and well child care and oral 

20 health, vision, and hearing services, equipment, and 

21 supplies for children under 21 years of age. 

22 ‘‘(c) REQUIREMENTS RELATING TO COST-SHAR23 ING.— 

24 ‘‘(1) NO COST-SHARING FOR PREVENTIVE SERV25 ICES.—There shall be no cost-sharing under an esVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00126 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 sential benefits package for preventive items and 

2 services described in subsection (b)(9). 

3 ‘‘(2) ANNUAL LIMITATION ON COST-SHARING.— 

4 ‘‘(A) 2013.—The cost-sharing incurred 

5 under an essential benefits package with respect 

6 to self-only coverage or coverage other than 

7 self-only coverage for a plan year beginning in 

8 2013 shall not exceed the dollar amounts in ef9 fect under section 223(c)(2)(A) of the Internal 

10 Revenue Code of 1986 for self-only and family 

11 coverage, respectively, for taxable years begin12 ning in 2013. 

13 ‘‘(B) 2014 AND LATER.—In the case of 

14 any plan year beginning in a calendar year 

15 after 2013, the limitation under this paragraph 

16 shall— 

17 ‘‘(i) in the case of self-only coverage, 

18 be equal to the dollar amount under sub19 paragraph (A) for self-only coverage, in20 creased by an amount equal to the product 

21 of that amount and the premium adjust22 ment percentage under paragraph (7) for 

23 the calendar year; and 

24 ‘‘(ii) in the case of other coverage, 

25 twice the amount in effect under clause (i). 


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1 If the amount of any increase under clause (i) 

2 is not a multiple of $50, such increase shall be 

3 rounded to the next lowest multiple of $50. 

4 ‘‘(3) ANNUAL LIMITATION ON DEDUCTIBLES

5 FOR EMPLOYER-SPONSORED PLANS.— 

6 ‘‘(A) IN GENERAL.—In the case of a health 

7 benefits plan offered in the small group market, 

8 the deductible under an essential benefits pack9 age shall not exceed— 

10 ‘‘(i) $2,000 in the case of a plan cov11 ering a single individual; and 

12 ‘‘(ii) $4,000 in the case of any other 

13 plan. 

14 The amounts under clauses (i) and (ii) may be 

15 increased by the maximum amount of reim16 bursement which is reasonably available to a 

17 participant under a flexible spending arrange18 ment described in section 106(c)(2) of the In19 ternal Revenue Code of 1986 (determined with20 out regard to any salary reduction arrange21 ment). 

22 ‘‘(B) INDEXING OF LIMITS.—In the case of 

23 any plan year beginning in a calendar year 

24 after 2013— 


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1 ‘‘(i) the dollar amount under subpara2 graph (A)(i) shall be increased by an 

3 amount equal to the product of that 

4 amount and the premium adjustment per5 centage under paragraph (7) for the cal6 endar year; and 

7 ‘‘(ii) the dollar amount under sub8 paragraph (A)(ii) shall be increased to an 

9 amount equal to twice the amount in effect 

10 under subparagraph (A)(i) for plan years 

11 beginning in the calendar year, determined 

12 after application of clause (i). 

13 If the amount of any increase under clause (i) 

14 is not a multiple of $50, such increase shall be 

15 rounded to the next lowest multiple of $50. 

16 ‘‘(C) LIMITATIONS.— 

17 ‘‘(i) ACTUARIAL VALUE.—The limita18 tion under this paragraph shall be applied 

19 in such a manner so as to not affect the 

20 actuarial value of any qualified health ben21 efits plan, including a plan in the bronze 

22 level. 

23 ‘‘(ii) CATASTROPHIC PLAN.—This 

24 paragraph shall not apply to a catastrophic 

25 plan described in section 2243(c). 


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1 ‘‘(4) PARITY WITHIN CATEGORIES.—In the case 

2 of items and services described in paragraphs (1), 

3 (2), (3), and (5) of subsection (b), the cost-sharing 

4 incurred under an essential benefits package shall be 

5 the same for treatment of conditions within each 

6 such category of covered services. 

7 ‘‘(5) SPECIAL RULE FOR VALUE-BASED DE8 SIGN.— 

9 ‘‘(A) IN GENERAL.—Paragraphs (1) and 

10 (4) shall not apply in the case of a health bene11 fits plan for which a value-based design is used. 

12 ‘‘(B) VALUE-BASED DESIGN.—For pur13 poses of subparagraph (A), a value-based de14 sign is a methodology under which— 

15 ‘‘(i) clinically beneficial preventive 

16 screenings, lifestyle interventions, medica17 tions, immunizations, diagnostic tests and 

18 procedures, and treatments are identified; 

19 and 

20 ‘‘(ii) cost-sharing for items and serv21 ices described in clause (i) is reduced or 

22 eliminated to reflect the high value and ef23 fectiveness of the items and services. 

24 ‘‘(6) COST-SHARING.—In this title, the term 

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1 payments, and similar charges but does not include 

2 premiums or any network payment differential for 

3 covered services or spending for non-covered serv4 ices. 

5 ‘‘(7) PREMIUM ADJUSTMENT PERCENTAGE.— 

6 For purposes of paragraphs (2)(B)(i) and (3)(B)(i), 

7 the premium adjustment percentage for any cal8 endar year is the percentage (if any) by which the 

9 average per capita premium for health insurance 

10 coverage in the United States for the preceding cal11 endar year (as estimated by the Secretary no later 

12 than October 1 of such preceding calendar year) ex13 ceeds such average per capita premium for 2012 (as 

14 determined by the Secretary). 

15 ‘‘(d) SPECIFIC ITEMS AND SERVICES.— 

16 ‘‘(1) PRESCRIPTION DRUGS.—An essential ben17 efits package shall at least meet the class and cov18 erage requirements of part D of title XVIII of this 

19 Act with respect to prescription drugs. 

20 ‘‘(2) MENTAL HEALTH AND SUBSTANCE USE

21 DISORDER SERVICES.—An essential benefits package 

22 shall at least meet the minimum standards required 

23 by Federal or State law for coverage of mental 

24 health and substance use disorder services, including 

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1 ment limitations applicable to such services comply 

2 with the requirements of section 9812(a) of the In3 ternal Revenue Code of 1986 in the same manner as 

4 such requirements apply to a group health plan. 

5 ‘‘(3) TOBACCO CESSATION PROGRAMS.—If a 

6 health benefits plan varies its premium on the basis 

7 of tobacco use, an essential benefits package shall 

8 include coverage for tobacco cessation programs, in9 cluding counseling and pharmacotherapy (involving 

10 either prescription or nonprescription drugs). 

11 ‘‘(4) OTHER ITEMS AND SERVICES.—An essen12 tial benefits package shall include coverage of day 

13 surgery and related anaesthesia, diagnostic images 

14 and screening (including x-rays), and radiation and 

15 chemotherapy. 

16 ‘‘(5) PEDIATRIC DENTAL BENEFITS.—If a 

17 health benefits plan described in section 2231(c)(2) 

18 (relating to stand-alone dental benefits plans) is of19 fered through an exchange, another health benefits 

20 plan offered through such exchange shall not fail to 

21 be treated as a qualified health benefits plan solely 

22 because the plan does not offer coverage of benefits 

23 offered through the stand-alone plan that are other24 wise required under subsection (b)(11). 


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1 ‘‘(6) SPECIAL RULES FOR EMERGENCY DEPART2 MENT SERVICES.—A health benefits plan shall not 

3 be treated as meeting the requirements of subsection 

4 (b)(2) to provide coverage for emergency department 

5 services unless the plan provides that— 

6 ‘‘(A) coverage for such services will be pro7 vided without regard to any requirement under 

8 the plan for prior authorization of services or 

9 any limitation on coverage where the provider 

10 of services does not have a contractual relation11 ship with the plan for the providing of services; 

12 and 

13 ‘‘(B) if such services are provided out-of14 network, any cost-sharing required by the plan 

15 does not exceed the cost-sharing that would be 

16 required if such services were provided in-net17 work. 

18 ‘‘(e) SPECIFICATION AND ANNUAL UPDATE.— 

19 ‘‘(1) IN GENERAL.—Not later than July 1, 

20 2012, the Secretary shall— 

21 ‘‘(A) define the benefit categories estab22 lished under subsection (b) for qualified health 

23 benefits plans offered in the individual market 

24 within a State; and 


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1 ‘‘(B) specify the covered treatments, items, 

2 and services within each of such categories. 

3 The Secretary shall establish such benefits coverage 

4 on the basis of the most recent medical evidence and 

5 information with respect to scientific advancement. 

6 ‘‘(2) ANNUAL UPDATES.—The Secretary shall 

7 annually update the benefits coverage determined 

8 under paragraph (1). The Secretary may address 

9 any gaps in access to coverage or changes in the evi10 dence base by modifying or adding any category of 

11 benefits and covered treatments, items, and services. 

12 ‘‘(3) LIMITATION.—The Secretary shall ensure 

13 that the scope of the benefits coverage under this 

14 subsection is not more extensive than the scope of 

15 the benefits provided under a typical employer plan, 

16 as determined by the Secretary and certified by the 

17 Chief Actuary of the Centers for Medicare & Med18 icaid Services. 

19 ‘‘(4) FLEXIBILITY IN PLAN DESIGN.—The Sec20 retary shall allow flexibility in plan design to the ex21 tent such flexibility does not result in adverse selec22 tion. 

23 ‘‘(f) EXCHANGE REQUIREMENT.—Each State shall 

24 ensure that at least 1 plan offered in each exchange estab25 lished in the State shall offer qualified health benefits 


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1 plans that are at least actuarially equivalent to the stand2 ard option Blue Cross Blue Shield plan offered under the 

3 Federal Employees Health Benefits Program chapter 89 

4 of title 5, United States Code. 

5 ‘‘(g) PAYMENTS TO FEDERALLY-QUALIFIED HEALTH

6 CENTERS.—If any item or service covered by a qualified 

7 health benefits plan is provided by a Federally-qualified 

8 health center (as defined in section 1905(l)(2)(B)) to an 

9 enrollee of the plan, the offeror of the plan shall pay to 

10 the center for the item or service an amount that is not 

11 less than the amount of payment that would have been 

12 paid to the center under section 1902(bb) for such item 

13 or service. 

14 ‘‘SEC. 2243. LEVELS OF COVERAGE. 

15 ‘‘(a) IN GENERAL.—Except as provided in sub16 sections (c) and (d), a health benefits plan shall provide 

17 a bronze, silver, gold, or platinum level of coverage. 

18 ‘‘(b) LEVELS OF COVERAGE DEFINED.—In this title, 

19 a health benefits plan providing an essential benefits pack20 age shall be assigned to 1 of the following levels of cov21 erage: 

22 ‘‘(1) BRONZE LEVEL.—A plan in the bronze 

23 level shall provide a level of coverage that is de24 signed to provide benefits that are actuarially equiv25 alent to 65 percent of the full actuarial value of the 


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1 benefits provided under the essential benefits pack2 age. 

3 ‘‘(2) SILVER LEVEL.—A plan in the silver level 

4 shall provide a level of coverage that is designed to 

5 provide benefits that are actuarially equivalent to 70 

6 percent of the full actuarial value of the benefits 

7 provided under the essential benefits package. 

8 ‘‘(3) GOLD LEVEL.—A plan in the gold level 

9 shall provide a level of coverage that is designed to 

10 provide benefits that are actuarially equivalent to 80 

11 percent of the full actuarial value of the benefits 

12 provided under the essential benefits package. 

13 ‘‘(4) PLATINUM LEVEL.—A plan in the plat14 inum level shall provide a level of coverage that is 

15 designed to provide benefits that are actuarially 

16 equivalent to 90 percent of the full actuarial value 

17 of the benefits provided under the essential benefits 

18 package. 

19 ‘‘(c) CATASTROPHIC PLAN FOR YOUNG INDIVID20 UALS.— 

21 ‘‘(1) IN GENERAL.—A health benefits plan not 

22 providing a bronze, silver, gold, or platinum level of 

23 coverage shall be treated as meeting the require24 ments of this section with respect to any plan year 

25 if— 


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1 ‘‘(A) except as provided in paragraph (3), 

2 the only individuals who are eligible to enroll in 

3 the plan are individuals who have not attained 

4 the age of 26 before the beginning of the plan 

5 year; and 

6 ‘‘(B) the plan provides an essential bene7 fits package meeting the requirements of sec8 tion 2242, except that, subject to paragraph 

9 (2), the plan provides no benefits for any plan 

10 year until the individual has incurred cost-shar11 ing expenses in an amount equal to the annual 

12 limitation in effect under section 2242(c)(2) for 

13 the plan year. 

14 ‘‘(2) PREVENTIVE SERVICES.—A health benefits 

15 plan shall not be treated as described in paragraph 

16 (1) unless the plan requires no cost-sharing with re17 spect to preventive services described in section 

18 2242(b)(9). 

19 ‘‘(3) INDIVIDUALS WITHOUT AFFORDABLE COV20 ERAGE.—If an individual has a certification in effect 

21 for any plan year under section 2236(f) that the in22 dividual is exempt from the requirement under sec23 tion 5000A of the Internal Revenue Code of 1986 by 

24 reason of section 5000A(e)(2), such individual shall 


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1 be eligible to enroll for the plan year in a plan de2 scribed in paragraph (1). 

3 ‘‘(d) CHILD-ONLY PLANS.—If an offeror offers a 

4 qualified health benefits plan in any level of coverage spec5 ified under this section, the offeror may also offer that 

6 plan in that level as a plan in which the only enrollees 

7 are individuals who, as of the beginning of a plan year— 

8 ‘‘(1) have not attained the age of 21; or 

9 ‘‘(2) have attained the age of 21 but are the de10 pendent of another person. 

11 ‘‘(e) ALLOWABLE VARIANCE.—A State may allow a 

12 de minimus variation in the actuarial valuations used in 

13 determining the level of coverage of a plan to account for 

14 differences in actuarial estimates. 

15 ‘‘(f) PLAN REFERENCE.—In this title, any reference 

16 to a bronze, silver, gold, or platinum plan shall be treated 

17 as a reference to a health benefits plan providing a bronze, 

18 silver, gold, or platinum level of coverage, as the case may 

19 be. 

20 ‘‘SEC. 2244. APPLICATION OF CERTAIN RULES TO PLANS IN 

21 GROUP MARKETS. 

22 ‘‘(a) ANNUAL AND LIFETIME LIMITS.—In the case 

23 of a health benefits plan offered in the large or small 

24 group market in a State, the State shall prohibit the plan 

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1 sonable annual or lifetime limits (within the meaning of 

2 section 223 of the Internal Revenue Code of 1986) on en3 rollees in the plan. This subsection shall not apply to a 

4 grandfathered health benefits plan or to a qualified health 

5 benefits plan in the small group market. 

6 ‘‘(b) ADDITIONAL LARGE GROUP REQUIREMENTS.— 

7 In the case of a health benefits plan offered in the large 

8 group market in a State, the State shall require such plan 

9 for plan years beginning after June 30, 2013— 

10 ‘‘(1) to meet the requirements of section 

11 2243(c)(2) (relating to annual limits on cost-shar12 ing); and 

13 ‘‘(2) to provide preventive items and services 

14 described in section 2243(b)(9) and except as pro15 vided in section 2243(c)(5), to require no cost-shar16 ing for such items and services. 

17 ‘‘(c) AUTO ENROLLMENT.—Each State shall require 

18 any large employer that has more than 200 employees and 

19 that offers employees enrollment in 1 or more health bene20 fits plans to automatically enroll new full-time employees 

21 in one of the plans and to continue the enrollment of cur22 rent employees in a health benefits plan offered through 

23 the employer. Any automatic enrollment program shall in24 clude adequate notice and the opportunity for an employee 


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1 to opt out of any coverage the individual was automatically 

2 enrolled in. 

3 ‘‘SEC. 2245. SPECIAL RULES RELATING TO COVERAGE OF 

4 ABORTION SERVICES. 

5 ‘‘(a) VOLUNTARY CHOICE OF COVERAGE OF ABOR6 TION SERVICES.— 

7 ‘‘(1) IN GENERAL.—Notwithstanding any other 

8 provision of this subpart and subject to paragraph 

9 (3)— 

10 ‘‘(A) nothing in this subpart shall be con11 strued to require a health benefits plan to pro12 vide coverage of services described in paragraph 

13 (2)(A) or (2)(B) as part of its essential benefits 

14 package for any plan year; and 

15 ‘‘(B) the offeror of a health benefits plan 

16 shall determine whether or not the plan pro17 vides coverage of services described in para18 graph (2)(A) or (2)(B) as part of such package 

19 for the plan year. 

20 ‘‘(2) ABORTION SERVICES.— 

21 ‘‘(A) ABORTIONS FOR WHICH PUBLIC

22 FUNDING IS PROHIBITED.—The services de23 scribed in this subparagraph are abortions for 

24 which the expenditure of Federal funds appro25 priated for the Department of Health and 


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1 Human Services is not permitted, based on the 

2 law as in effect as of the date that is 6 months 

3 before the beginning of the plan year involved. 

4 ‘‘(B) ABORTIONS FOR WHICH PUBLIC

5 FUNDING IS ALLOWED.—The services described 

6 in this subparagraph are abortions for which 

7 the expenditure of Federal funds appropriated 

8 for the Department of Health and Human 

9 Services is permitted, based on the law as in ef10 fect as of the date that is 6 months before the 

11 beginning of the plan year involved. 

12 ‘‘(3) ASSURED AVAILABILITY OF VARIED COV13 ERAGE THROUGH EXCHANGES.— 

14 ‘‘(A) IN GENERAL.—The Secretary shall 

15 assure that with respect to qualified health ben16 efits plans offered in any exchange established 

17 pursuant to this title— 

18 ‘‘(i) there is at least one such plan 

19 that provides coverage of services described 

20 in subparagraphs (A) and (B) of para21 graph (2); and 

22 ‘‘(ii) there is at least one such plan 

23 that does not provide coverage of services 

24 described in paragraph (2)(A). 


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1 ‘‘(B) SPECIAL RULES.—For purposes of 

2 subparagraph (A)— 

3 ‘‘(i) a plan shall be treated as de4 scribed in subparagraph (A)(ii) if the plan 

5 does not provide coverage of services de6 scribed in either paragraph (2)(A) or 

7 (2)(B); and 

8 ‘‘(ii) if a State has one exchange cov9 ering both the individual and small group 

10 markets, the Secretary shall meet the re11 quirements of subparagraph (A) separately 

12 with respect to each such market. 

13 ‘‘(b) PROHIBITION OF USE OF FEDERAL FUNDS.— 

14 ‘‘(1) IN GENERAL.—If a qualified health bene15 fits plan provides coverage of services described in 

16 subsection (a)(2)(A), the offeror of the plan shall 

17 not use any amount attributable to any of the fol18 lowing for purposes of paying for such services: 

19 ‘‘(A) The credit under section 36B(b) of 

20 the Internal Revenue Code of 1986 (and the 

21 amount of the advance payment of the credit 

22 under section 2248 of the Social Security Act). 

23 ‘‘(B) Any cost-sharing subsidy under sec24 tion 2247. 


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1 ‘‘(2) SEGREGATION OF FUNDS.—In the case of 

2 a plan to which paragraph (1) applies, the offeror of 

3 the plan shall, out of amounts not described in para4 graph (1), segregate an amount equal to the actu5 arial amounts determined under paragraph (3) for 

6 all enrollees from the amounts described in para7 graph (1). 

8 ‘‘(3) ACTUARIAL VALUE OF OPTIONAL SERVICE

9 COVERAGE.— 

10 ‘‘(A) IN GENERAL.—The Secretary shall 

11 estimate the basic per enrollee, per month cost, 

12 determined on an average actuarial basis, for 

13 including coverage under a qualified health ben14 efits plan of the services described in subsection 

15 (a)(2)(A). 

16 ‘‘(B) CONSIDERATIONS.—In making such 

17 estimate, the Secretary— 

18 ‘‘(i) may take into account the impact 

19 on overall costs of the inclusion of such 

20 coverage, but may not take into account 

21 any cost reduction estimated to result from 

22 such services, including prenatal care, de23 livery, or postnatal care; 


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1 ‘‘(ii) shall estimate such costs as if 

2 such coverage were included for the entire 

3 population covered; and 

4 ‘‘(iii) may not estimate such a cost at 

5 less than $1 per enrollee, per month. 

6 ‘‘(c) NO DISCRIMINATION ON THE BASIS OF PROVI7 SION OF ABORTION.—A qualified health benefits plan may 

8 not discriminate against any individual health care pro9 vider or health care facility because of its willingness or 

10 unwillingness to provide, pay for, provide coverage of, or 

11 refer for abortions.’’. 

12 SEC. 1202. APPLICATION OF STATE AND FEDERAL LAWS RE13 GARDING ABORTION. 

14 (a) NO PREEMPTION OF STATE LAWS REGARDING

15 ABORTION.—Nothing in this Act shall be construed to 

16 preempt or otherwise have any effect on State laws regard17 ing the prohibition of (or requirement of) coverage, fund18 ing, or procedural requirements on abortions, including 

19 parental notification or consent for the performance of an 

20 abortion on a minor. 

21 (b) NO EFFECT ON FEDERAL LAWS REGARDING

22 ABORTION.— 

23 (1) IN GENERAL.—Nothing in this Act shall be 

24 construed to have any effect on Federal laws regard25 ing— 


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1 (A) conscience protection; 

2 (B) willingness or refusal to provide abor3 tion; and 

4 (C) discrimination on the basis of the will5 ingness or refusal to provide, pay for, cover, or 

6 refer for abortion or to provide or participate in 

7 training to provide abortion. 

8 (c) NO EFFECT ON FEDERAL CIVIL RIGHTS LAW.— 

9 Nothing in this section shall alter the rights and obliga10 tions of employees and employers under title VII of the 

11 Civil Rights Act of 1964. 

12 SEC. 1203. APPLICATION OF EMERGENCY SERVICES LAWS. 

13 Nothing in this Act shall be construed to relieve any 

14 health care provider from providing emergency services as 

15 required by State or Federal law, including section 1867 

16 of the Social Security Act (popularly known as 

17 ‘‘EMTALA’’). 


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1 PART II—PREMIUM CREDITS, COST-SHARING 

2 SUBSIDIES, AND SMALL BUSINESS CREDITS 

3 Subpart A—Premium Credits and Cost-sharing 

4 Subsidies 

5 SEC. 1205. REFUNDABLE CREDIT PROVIDING PREMIUM AS6 SISTANCE FOR COVERAGE UNDER A QUALI7 FIED HEALTH BENEFITS PLAN. 

8 (a) IN GENERAL.—Subpart C of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 (relating to refundable credits) is amended by insert11 ing after section 36A the following new section: 

12 ‘‘SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A 

13 QUALIFIED HEALTH BENEFITS PLAN. 

14 ‘‘(a) IN GENERAL.—In the case of an applicable tax15 payer, there shall be allowed as a credit against the tax 

16 imposed by this subtitle for any taxable year an amount 

17 equal to the premium assistance credit amount of the tax18 payer for the taxable year. 

19 ‘‘(b) PREMIUM ASSISTANCE CREDIT AMOUNT.—For 

20 purposes of this section— 

21 ‘‘(1) IN GENERAL.—The term ‘premium assist22 ance credit amount’ means, with respect to any tax23 able year, the sum of the premium assistance 

24 amounts determined under paragraph (2) with re25 spect to all coverage months of the taxpayer occur26 ring during the taxable year. 


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1 ‘‘(2) PREMIUM ASSISTANCE AMOUNT.—The pre2 mium assistance amount determined under this sub3 section with respect to any coverage month is the 

4 amount equal to the excess (if any) of— 

5 ‘‘(A) the lesser of— 

6 ‘‘(i) the monthly premiums for such 

7 month for 1 or more qualified health bene8 fits plans offered in the individual market 

9 within a State which cover the taxpayer, 

10 the taxpayer’s spouse, or any dependent 

11 (as defined in section 152) of the taxpayer 

12 and which were enrolled in through an ex13 change established by the State under sub14 part B of title XXII of the Social Security 

15 Act, or 

16 ‘‘(ii) the adjusted monthly premium 

17 for such month for the applicable second 

18 lowest cost silver plan with respect to the 

19 taxpayer, over 

20 ‘‘(B) an amount equal to 1/12 of the prod21 uct of the applicable percentage and the tax22 payer’s household income for the taxable year. 

23 ‘‘(3) OTHER TERMS AND RULES RELATING TO

24 PREMIUM ASSISTANCE AMOUNTS.—For purposes of 

25 paragraph (2)— 


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1 ‘‘(A) APPLICABLE PERCENTAGE.— 

2 ‘‘(i) IN GENERAL.—The applicable 

3 percentage with respect to any taxpayer 

4 for any taxable year is equal to 2 percent, 

5 increased by the number of percentage 

6 points (not greater than 10) which bears 

7 the same ratio to 10 percentage points 

8 as— 

9 ‘‘(I) the taxpayer’s household in10 come for the taxable year in excess of 

11 100 percent of the poverty line for a 

12 family of the size involved, bears to 

13 ‘‘(II) an amount equal to 200 

14 percent of the poverty line for a fam15 ily of the size involved. 

16 ‘‘(ii) INDEXING.—In the case of tax17 able years beginning in any calendar year 

18 after 2013, the Secretary shall adjust the 

19 initial and final applicable percentages for 

20 the calendar year to reflect the excess of 

21 the rate of premium growth between the 

22 preceding calendar year and 2012 over the 

23 rate of income growth for such period. 

24 ‘‘(B) APPLICABLE SECOND LOWEST COST

25 SILVER PLAN.—The applicable second lowest 


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1 cost silver plan with respect to any applicable 

2 taxpayer is the second lowest cost silver plan in 

3 the individual market which— 

4 ‘‘(i) is offered through the same ex5 change through which the qualified health 

6 benefits plans taken into account under 

7 paragraph (2)(A)(i) were offered, and 

8 ‘‘(ii) in the case of— 

9 ‘‘(I) an applicable taxpayer whose 

10 tax for the taxable year is determined 

11 under section 1(c) (relating to unmar12 ried individuals other than surviving 

13 spouses and heads of households), 

14 provides self-only coverage, and 

15 ‘‘(II) any other applicable tax16 payer, provides family coverage. 

17 If a taxpayer files a joint return and no credit 

18 is allowed under this section with respect to 1 

19 of the spouses by reason of subsection (e), the 

20 taxpayer shall be treated as described in clause 

21 (ii)(I) unless a deduction is allowed under sec22 tion 151 for the taxable year with respect to a 

23 dependent other than either spouse. 

24 ‘‘(C) ADJUSTED MONTHLY PREMIUM.— 

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1 ble second lowest cost silver plan is the monthly 

2 premium which would have been charged for 

3 the plan if each individual covered under a 

4 qualified health benefits plan taken into account 

5 under paragraph (2)(A)(i) were covered by the 

6 plan and the premium was adjusted only for the 

7 age of each such individual in the manner al8 lowed under section 2204 of the Social Security 

9 Act. 

10 ‘‘(4) REDUCTION TO ELIMINATE FEDERAL

11 BUDGET DEFICIT.—The premium assistance credit 

12 amount (determined without regard to this para13 graph) with respect to a month in a plan year for 

14 which a reduction is required in such amount under 

15 section 1209 of the America’s Healthy Future Act 

16 of 2009 shall be reduced by the percentage specified 

17 in such section. 

18 ‘‘(c) DEFINITION AND RULES RELATING TO APPLI19 CABLE TAXPAYERS, COVERAGE MONTHS, AND QUALIFIED

20 HEALTH BENEFITS PLAN.—For purposes of this sec21 tion— 

22 ‘‘(1) APPLICABLE TAXPAYER.— 

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

24 taxpayer’ means, with respect to any taxable 

25 year, a taxpayer whose household income for 


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1 the taxable year exceeds 100 percent (133 per2 cent in the case of taxable years beginning in 

3 2013) but does not exceed 400 percent of an 

4 amount equal to the poverty line for a family of 

5 the size involved. 

6 ‘‘(B) SPECIAL RULE FOR CERTAIN INDI7 VIDUALS LAWFULLY PRESENT IN THE UNITED

8 STATES.—In the case of any taxable year begin9 ning after December 31, 2013, if— 

10 ‘‘(i) a taxpayer has a household in11 come which is not greater than 100 per12 cent of an amount equal to the poverty line 

13 for a family of the size involved, and 

14 ‘‘(ii) the taxpayer is an alien lawfully 

15 admitted to the United States for perma16 nent residence, or an alien lawfully present 

17 in the United States, but is not eligible for 

18 the medicaid program under title XIX of 

19 the Social Security Act by reason of such 

20 alien status, 

21 the taxpayer shall be treated as an applicable 

22 taxpayer. 

23 ‘‘(C) MARRIED COUPLES MUST FILE JOINT

24 RETURN.—If the taxpayer is married (within 

25 the meaning of section 7703) at the close of the 


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1 taxable year, the taxpayer shall be treated as an 

2 applicable taxpayer only if the taxpayer and the 

3 taxpayer’s spouse file a joint return for the tax4 able year. 

5 ‘‘(D) DENIAL OF CREDIT TO DEPEND6 ENTS.—No credit shall be allowed under this 

7 section to any individual with respect to whom 

8 a deduction under section 151 is allowable to 

9 another taxpayer for a taxable year beginning 

10 in the calendar year in which such individual’s 

11 taxable year begins. 

12 ‘‘(2) COVERAGE MONTH.—For purposes of this 

13 subsection— 

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

15 month’ means, with respect to an applicable 

16 taxpayer, any month if— 

17 ‘‘(i) as of the first day of such month 

18 the taxpayer, the taxpayer’s spouse, or any 

19 dependent of the taxpayer is covered by a 

20 qualified health benefits plan described in 

21 subsection (b)(2)(A)(i), and 

22 ‘‘(ii) the premium for coverage under 

23 such plan for such month is paid by the 

24 taxpayer (or through advance payment of 


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1 the credit under subsection (a) under sec2 tion 2248 of the Social Security Act). 

3 ‘‘(B) EXCEPTION FOR ESSENTIAL HEALTH

4 BENEFITS COVERAGE.— 

5 ‘‘(i) IN GENERAL.—The term ‘cov6 erage month’ shall not include any month 

7 with respect to an individual if for such 

8 month the individual is eligible for essen9 tial health benefits coverage other than eli10 gibility for coverage under a qualified 

11 health benefits plan in the individual mar12 ket offered through an exchange. 

13 ‘‘(ii) ESSENTIAL HEALTH BENEFITS

14 COVERAGE.—The term ‘essential health 

15 benefits coverage’ has the meaning given 

16 such term by section 5000A. 

17 ‘‘(C) SPECIAL RULE FOR EMPLOYER-SPON18 SORED ESSENTIAL COVERAGE.—For purposes 

19 of subparagraph (B)— 

20 ‘‘(i) COVERAGE MUST BE AFFORD21 ABLE.—Except as provided in clause (iii), 

22 an employee shall not be treated as eligible 

23 for essential health benefits coverage if 

24 such coverage— 


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1 ‘‘(I) consists of an eligible em2 ployer-sponsored plan (as defined in 

3 section 5000A(f)(2)) or a grand4 fathered health benefits plan main5 tained by the employee’s employer, 

6 and 

7 ‘‘(II) the employee’s required 

8 contribution (within the meaning of 

9 section 5000A(e)(2)) with respect to 

10 the plan exceeds 10 percent of the ap11 plicable taxpayer’s household income. 

12 This clause shall also apply to an indi13 vidual who is eligible to enroll in the plan 

14 by reason of a relationship the individual 

15 bears to the employee. 

16 ‘‘(ii) COVERAGE MUST PROVIDE MIN17 IMUM VALUE.—Except as provided in 

18 clause (iii), an employee shall not be treat19 ed as eligible for essential health benefits 

20 coverage if such coverage consists of an eli21 gible employer-sponsored plan (as defined 

22 in section 5000A(f)(2)) or a grandfathered 

23 health benefits plan maintained by the em24 ployee’s employer and the plan’s share of 

25 the total allowed costs of benefits provided 


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1 under the plan is less than 65 percent of 

2 such costs. 

3 ‘‘(iii) EMPLOYEE OR FAMILY MUST

4 NOT BE COVERED UNDER EMPLOYER

5 PLAN.—Clauses (i) and (ii) shall not apply 

6 if the employee (or any individual de7 scribed in the last sentence of clause (i)) is 

8 covered under the eligible employer-spon9 sored plan or the grandfathered health 

10 benefits plan. 

11 ‘‘(iv) INDEXING.—In the case of plan 

12 years beginning in any calendar year after 

13 2013, clause (i)(II) shall be applied by 

14 substituting for 10 percent a percentage 

15 equal to the sum of— 

16 ‘‘(I) 10 percent, plus 

17 ‘‘(II) 10 percent multiplied by 

18 the premium adjustment percentage 

19 (as defined in section 2242(c)(7) of 

20 the Social Security Act) for the cal21 endar year. 

22 ‘‘(D) SPECIAL RULE FOR MEDICAID INDI23 VIDUALS.—An individual shall not be treated as 

24 eligible for essential health benefits coverage if 

25 under title XIX of the Social Security Act the 


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1 individual may elect to enroll in the medicaid 

2 program or in a qualified health benefits plan 

3 in the individual market through an exchange 

4 and elects to enroll in such plan even if under 

5 the medicaid program the individual receives 

6 coverage for items and services or cost-sharing 

7 which is provided under the medicaid program 

8 but not under such plan. 

9 ‘‘(3) DEFINITIONS.—For purposes of this para10 graph— 

11 ‘‘(A) QUALIFIED HEALTH BENEFITS

12 PLAN.—The term ‘qualified health benefits 

13 plan’ has the meaning given such term by sec14 tion 2201(b) of the Social Security Act. 

15 ‘‘(B) GRANDFATHERED HEALTH BENEFITS

16 PLAN.—The term ‘grandfathered health bene17 fits plan’ has the meaning given such term by 

18 section 2221 of the Social Security Act. 

19 ‘‘(d) TERMS RELATING TO INCOME AND FAMILIES.— 

20 For purposes of this section— 

21 ‘‘(1) FAMILY SIZE.—The family size involved 

22 with respect to any taxpayer shall be equal to the 

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1 lowance of deduction for personal exemptions) for 

2 the taxable year. 

3 ‘‘(2) HOUSEHOLD INCOME.— 

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

5 income’ means, with respect to any taxpayer, an 

6 amount equal to the sum of— 

7 ‘‘(i) the modified gross income of the 

8 taxpayer, plus 

9 ‘‘(ii) the aggregate modified gross in10 comes of all other individuals taken into 

11 account in determining the taxpayer’s fam12 ily size under paragraph (1). 

13 ‘‘(B) MODIFIED GROSS INCOME.—The 

14 term ‘modified gross income’ means gross in15 come— 

16 ‘‘(i) decreased by the amount of any 

17 deduction allowable under paragraphs (1), 

18 (3), or (4) of section 62(a), 

19 ‘‘(ii) increased by the amount of inter20 est received or accrued during the taxable 

21 year which is exempt from tax imposed by 

22 this chapter, and 

23 ‘‘(iii) determined without regard to 

24 sections 911, 931, and 933. 

25 ‘‘(3) POVERTY LINE.— 


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1 ‘‘(A) IN GENERAL.—The term ‘poverty 

2 line’ has the meaning given that term in section 

3 2110(c)(5) of the Social Security Act (42 

4 U.S.C. 1397jj(c)(5)). 

5 ‘‘(B) POVERTY LINE USED.—In the case of 

6 any qualified health benefits plan offered 

7 through an exchange for coverage during a tax8 able year beginning in a calendar year, the pov9 erty line used shall be the most recently pub10 lished poverty line as of the 1st day of the reg11 ular enrollment period for coverage during such 

12 calendar year. 

13 ‘‘(e) RULES FOR UNDOCUMENTED ALIENS.— 

14 ‘‘(1) IN GENERAL.—If any individual for whom 

15 the taxpayer is allowed a deduction under section 

16 151 (relating to allowance of deduction for personal 

17 exemptions) for the taxable year is an undocumented 

18 alien— 

19 ‘‘(A) no credit shall be allowed under sub20 section (a) with respect to any portion of any 

21 premium taken into account under clause (i) or 

22 (ii) of subsection (b)(2)(A) which is attributable 

23 to the individual, and 

24 ‘‘(B) the individual shall not be taken into 

25 account in determining the family size involved 


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1 but the individual’s modified gross income shall 

2 be taken into account in determining household 

3 income. 

4 ‘‘(2) UNDOCUMENTED ALIEN.—For purposes of 

5 this section— 

6 ‘‘(A) The term ‘undocumented alien’ 

7 means an individual who is not, or who is rea8 sonably not expected to be for the entire taxable 

9 year, a citizen or national of the United States, 

10 an alien lawfully admitted to the United States 

11 for permanent residence, or an alien lawfully 

12 present in the United States. 

13 ‘‘(B) IDENTIFICATION REQUIREMENT.—An 

14 individual shall be treated as an undocumented 

15 alien unless the information required under sec16 tion 2238(b)(2) of the Social Security Act has 

17 been provided with respect to such individual. 

18 ‘‘(f) RECONCILIATION OF CREDIT AND ADVANCE

19 CREDIT.— 

20 ‘‘(1) IN GENERAL.—The amount of the credit 

21 allowed under this section for any taxable year shall 

22 be reduced (but not below zero) by the amount of 

23 any advance payment of such credit under section 

24 2248 of the Social Security Act. 

25 ‘‘(2) EXCESS ADVANCE PAYMENTS.— 


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1 ‘‘(A) IN GENERAL.—If the advance pay2 ments to a taxpayer under section 2248 of the 

3 Social Security Act for a taxable year exceed 

4 the credit allowed by this section (determined 

5 without regard to paragraph (1)), the tax im6 posed by this chapter for the taxable year shall 

7 be increased by the amount of such excess. 

8 ‘‘(B) LIMITATION ON INCREASE WHERE

9 INCOME LESS THAN 300 PERCENT OF POVERTY

10 LINE.—In the case of an applicable taxpayer 

11 whose household income is less than 300 per12 cent of the poverty line for the size of the fam13 ily involved for the taxable year, the amount of 

14 the increase under subparagraph (A) shall in no 

15 event exceed $400 ($250 in the case of a tax16 payer whose tax is determined under section 

17 1(c) for the taxable year). 

18 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

19 such regulations as may be necessary to carry out the pro20 visions of this section, including regulations which provide 

21 for— 

22 ‘‘(1) the coordination of the credit allowed 

23 under this section with the program for advance 

24 payment of the credit under section 2248 of the So25 cial Security Act, 


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1 ‘‘(2) requirements for information required to 

2 be included on a return of tax with respect to the 

3 modified gross income of individuals other than the 

4 taxpayer, and 

5 ‘‘(3) the application of subsection (f) where the 

6 filing status of the taxpayer for a taxable year is dif7 ferent from such status used for determining the ad8 vance payment of the credit.’’. 

9 (b) DISALLOWANCE OF DEDUCTION.—Section 280C 

10 of the Internal Revenue Code of 1986 is amended by add11 ing at the end the following new subsection: 

12 ‘‘(g) CREDIT FOR HEALTH INSURANCE PREMIUMS.— 

13 No deduction shall be allowed for the portion of the pre14 miums paid by the taxpayer for coverage of 1 or more 

15 individuals under a qualified health benefits plan which 

16 is equal to the amount of the credit determined for the 

17 taxable year under section 36B(a) with respect to such 

18 premiums.’’. 

19 (c) TREATMENT OF FAILURE TO PROVIDE DOCU20 MENTATION AS MATHEMATICAL ERROR.—Section 

21 6213(g)(2) of the Internal Revenue Code of 1986 is 

22 amended by striking ‘‘and’’ at the end of subparagraph 

23 (M), by striking the period at the end of subparagraph 

24 (N) and inserting ‘‘, and’’, and by inserting after subpara25 graph (N) the following new subparagraph: 


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1 ‘‘(O) the omission of identifying informa2 tion described in section 2238(b)(1) of the So3 cial Security Act and required under section 

4 36B(e)(2)(B).’’. 

5 (d) STUDY.—Not later than 5 years after the date 

6 of the enactment of this Act, the Secretary of the Treas7 ury, in consultation with the Secretary of Health and 

8 Human Services, shall conduct a study of whether the per9 centage of household income used for purposes of section 

10 36B(c)(2)(C) of the Internal Revenue Code of 1986 (as 

11 added by this section) is the appropriate level for deter12 mining whether employer-provided coverage is affordable 

13 for an employee and whether such level may be lowered 

14 without significantly increasing the costs to the Federal 

15 Government and reducing employer-provided coverage. 

16 The Secretary shall report the results of such study to 

17 the appropriate committees of Congress, including any 

18 recommendations for legislative changes. 

19 (e) CONFORMING AMENDMENTS.— 

20 (1) Paragraph (2) of section 1324(b) of title 

21 31, United States Code, is amended by inserting 

22 ‘‘36B,’’ after ‘‘36A,’’. 

23 (2) The table of sections for subpart C of part 

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1 enue Code of 1986 is amended by inserting after the 

2 item relating to section 36A the following new item: 

‘‘Sec. 36B. Refundable credit for coverage under a qualified health benefits 

plan.’’. 

3 (f) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2012. 

6 SEC. 1206. COST-SHARING SUBSIDIES AND ADVANCE PAY7 MENTS OF PREMIUM CREDITS AND COST8 SHARING SUBSIDIES. 

9 Title XXII of the Social Security Act (as added by 

10 section 1001 and amended by sections 1101 and 1201) 

11 is amended by adding at the end the following: 

12 ‘‘Subpart 2—Premium Credits and Cost-sharing 

13 Subsidies 

14 ‘‘SEC. 2246. PREMIUM CREDITS. 

15 ‘‘For refundable tax credit providing premium assist16 ance for individuals with income less than 400 percent of 

17 the Federal poverty line, see section 36B of the Internal 

18 Revenue Code of 1986 (as added by section 1205 of the 

19 America’s Healthy Future Act of 2009). 

20 ‘‘SEC. 2247. COST-SHARING SUBSIDIES FOR INDIVIDUALS 

21 ENROLLING IN QUALIFIED HEALTH BENEFIT 

22 PLANS. 

23 ‘‘(a) IN GENERAL.—In the case of an eligible insured 

24 enrolled in a qualified health benefits plan with respect 


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1 to which a credit is allowed to the insured (or an applica2 ble taxpayer on behalf of the insured) under section 36B 

3 of the Internal Revenue Code of 1986— 

4 ‘‘(1) the Secretary shall notify the offeror of the 

5 plan of the eligible insured’s eligibility for a reduc6 tion in cost-sharing under this section; and 

7 ‘‘(2) the offeror shall reduce the cost-sharing 

8 under the plan at the level and in the manner speci9 fied in subsection (c). 

10 ‘‘(b) ELIGIBLE INSURED.—In this section, the term 

11 ‘eligible insured’ means an individual— 

12 ‘‘(1) who enrolls in a qualified health benefits 

13 plan in the silver level of coverage in the individual 

14 market offered through an exchange under part B; 

15 and 

16 ‘‘(2) whose household income exceeds 100 per17 cent (133 percent in the case of taxable years begin18 ning in 2013) but does not exceed 400 percent of 

19 the poverty line for a family of the size involved. 

20 In the case of an individual described in section 

21 36B(c)(1)(B) of the Internal Revenue Code of 1986 for 

22 any taxable year beginning after December 31, 2013, the 

23 individual shall be treated as having household income 

24 equal to 100 percent of such poverty line for purposes of 

25 applying this section. 


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1 ‘‘(c) DETERMINATION OF REDUCTION IN COST-SHAR2 ING.— 

3 ‘‘(1) REDUCTION IN OUT-OF-POCKET LIMIT.— 

4 The reduction in cost-sharing under this subsection 

5 shall first be achieved by reducing the applicable 

6 out-of pocket limit under section 2242(c)(2) in the 

7 case of— 

8 ‘‘(A) an eligible insured whose household 

9 income is more than 100 percent but not more 

10 than 200 percent of the poverty line for a fam11 ily of the size involved, by two-thirds; 

12 ‘‘(B) an eligible insured whose household 

13 income is more than 200 percent but not more 

14 than 300 percent of the poverty line for a fam15 ily of the size involved, by one-half; and 

16 ‘‘(C) an eligible insured whose household 

17 income is more than 300 percent but not more 

18 than 400 percent of the poverty line for a fam19 ily of the size involved, by one-third. 

20 The reduction under this paragraph shall not result 

21 in an increase in the plan’s share of the total al22 lowed costs of benefits provided under the plan 

23 above 80 percent (90 percent in the case of an eligi24 ble insured described in subparagraph (A)) of such 

25 costs 


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1 ‘‘(2) ADDITIONAL REDUCTION FOR LOWER IN2 COME INSUREDS.—The Secretary shall establish pro3 cedures under which the offeror of a qualified health 

4 benefits plan to which this section applies shall fur5 ther reduce cost-sharing under the plan in a manner 

6 sufficient to— 

7 ‘‘(A) in the case of an eligible insured 

8 whose household income is not less than 100 

9 percent but not more than 150 percent of the 

10 poverty line for a family of the size involved, in11 crease the plan’s share of the total allowed 

12 costs of benefits provided under the plan to 90 

13 percent of such costs; and 

14 ‘‘(B) in the case of an eligible insured 

15 whose household income is more than 150 per16 cent but not more than 200 percent of the pov17 erty line for a family of the size involved, in18 crease the plan’s share of the total allowed 

19 costs of benefits provided under the plan to 80 

20 percent of such costs. 

21 ‘‘(3) REDUCTION TO ELIMINATE FEDERAL

22 BUDGET DEFICIT.—The reduction in cost-sharing 

23 under this section (determined without regard to 

24 this paragraph) with respect to a plan year for 

25 which a reduction is required in such amount under 


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1 section 1209 of the America’s Healthy Future Act 

2 of 2009 shall be reduced by the percentage specified 

3 in such section. 

4 ‘‘(4) METHODS FOR PROVIDING SUBSIDY.— 

5 ‘‘(A) IN GENERAL.—An offeror of a quali6 fied health benefits plan making reductions 

7 under this subsection shall notify the Secretary 

8 of such reductions and the Secretary shall make 

9 periodic and timely payments to the offeror 

10 equal to the value of the reductions. 

11 ‘‘(B) CAPITATED PAYMENTS.—The Sec12 retary may establish a capitated payment sys13 tem to carry out the payment of subsidies 

14 under this section. Any such system shall take 

15 into account the value of the subsidies and 

16 make appropriate risk adjustments to such pay17 ments. 

18 ‘‘(d) SPECIAL RULES FOR INDIANS.— 

19 ‘‘(1) INDIANS UNDER 300 PERCENT OF POV20 ERTY.—If an individual enrolled in any qualified 

21 health benefits plan in the individual market 

22 through an exchange is an Indian (as defined in sec23 tion 4 of the Indian Health Care Improvement Act) 

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1 cent of the poverty line for a family of the size in2 volved, then, for purposes of this section— 

3 ‘‘(A) such individual shall be treated as an 

4 eligible insured; and 

5 ‘‘(B) the offeror of the plan shall eliminate 

6 any cost-sharing under the plan. 

7 ‘‘(2) ITEMS OR SERVICES FURNISHED THROUGH

8 INDIAN HEALTH PROVIDERS.—If an Indian (as so 

9 defined) enrolled in a qualified health benefits plan 

10 is furnished an item or service directly by the Indian 

11 Health Service, an Indian Tribe, Tribal Organiza12 tion, or Urban Indian Organization or through refer13 ral under contract health services— 

14 ‘‘(A) no cost-sharing under the plan shall 

15 be imposed under the plan for such item or 

16 service; and 

17 ‘‘(B) the offeror of the plan shall not re18 duce the payment to any such entity for such 

19 item or service by the amount of any cost-shar20 ing that would be due from the Indian but for 

21 subparagraph (A). 

22 ‘‘(3) PAYMENT.—The Secretary shall pay to the 

23 offeror of a qualified health benefits plan the 

24 amount necessary to reflect the increase in actuarial 


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1 value of the plan required by reason of this sub2 section. 

3 ‘‘(e) RULES FOR UNDOCUMENTED ALIENS.— 

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

5 who is undocumented alien— 

6 ‘‘(A) no cost-sharing reduction under this 

7 subsection shall apply with respect to any item 

8 or service provided to the individual; and 

9 ‘‘(B) the individual shall not be taken into 

10 account in determining the family size involved 

11 but the individual’s modified gross income shall 

12 be taken into account in determining household 

13 income. 

14 ‘‘(2) IDENTIFICATION REQUIREMENT.—An indi15 vidual shall be treated as an undocumented alien un16 less the information required under section 

17 2238(b)(2) of the Social Security Act has been pro18 vided with respect to such individual. 

19 ‘‘(f) DEFINITIONS AND SPECIAL RULES.—In this 

20 section: 

21 ‘‘(1) IN GENERAL.—Any term used in this sec22 tion which is also used in section 36B of the Inter23 nal Revenue Code of 1986 shall have the meaning 

24 given such term by such section. 


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1 ‘‘(2) LIMITATIONS ON SUBSIDY.—No subsidy 

2 shall be allowed under this section with respect to 

3 coverage for any month if such month would not be 

4 treated as a coverage month under section 36B(c)(2) 

5 of such Code. 

6 ‘‘SEC. 2248. ADVANCE DETERMINATION AND PAYMENT OF 

7 PREMIUM CREDITS AND COST-SHARING SUB8 SIDIES. 

9 ‘‘(a) IN GENERAL.—The Secretary, in consultation 

10 with the Secretary of the Treasury, shall establish a pro11 gram under which— 

12 ‘‘(1) upon request of an exchange, advance de13 terminations are made under section 2238 with re14 spect to the income eligibility of individuals enrolling 

15 in a qualified health benefits plan in the individual 

16 market through the exchange for the credit allowable 

17 under section 36B of the Internal Revenue Code of 

18 1986 and the cost-sharing subsidy under section 

19 2247; 

20 ‘‘(2) the Secretary notifies the exchange and 

21 the Secretary of the Treasury of the advance deter22 minations; and 

23 ‘‘(3) the Secretary of the Treasury makes ad24 vance payments of such credit or subsidy to the 

25 offerors of the qualified health benefits plans in 


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1 order to reduce the premiums payable by individuals 

2 eligible for such credit. 

3 ‘‘(b) ADVANCE DETERMINATIONS.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall provide 

5 under the program established under subsection (a) 

6 that advance determination of eligibility with respect 

7 to any individual shall be made— 

8 ‘‘(A) during the annual open enrollment 

9 period applicable to the individual (or such 

10 other enrollment period as may be specified by 

11 the Secretary); and 

12 ‘‘(B) on the basis of the individual’s house13 hold income for the second taxable year pre14 ceding the taxable year in which enrollment 

15 through such enrollment period first takes ef16 fect. 

17 ‘‘(2) CHANGES IN CIRCUMSTANCES.—The Sec18 retary shall provide procedures for making advance 

19 determinations on the basis of information other 

20 than that described in paragraph (1)(B) in cases 

21 where information included with an application form 

22 demonstrates substantial changes in income, changes 

23 in family size or other household circumstances, 

24 change in filing status, the filing of an application 


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1 for unemployment benefits, or other significant 

2 changes affecting eligibility, including— 

3 ‘‘(A) allowing an individual claiming a de4 crease of 20 percent or more in income, or fil5 ing an application for unemployment benefits, 

6 to have eligibility for the credit determined on 

7 the basis of household income for a later period 

8 or on the basis of the individual’s estimate of 

9 such income for the taxable year; and 

10 ‘‘(B) the determination of household in11 come in cases where the taxpayer was not re12 quired to file a return of tax imposed by this 

13 chapter for the second preceding taxable year. 

14 ‘‘(c) PAYMENT OF PREMIUM CREDITS.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall notify 

16 the Secretary of the Treasury and the exchange 

17 through which the individual is enrolling of the ad18 vance determination under section 2238. 

19 ‘‘(2) PREMIUM CREDIT.— 

20 ‘‘(A) IN GENERAL.—The Secretary of the 

21 Treasury shall make the advance payment 

22 under this section of any credit allowed under 

23 section 36B of the Internal Revenue Code of 

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1 fits plan on a monthly basis (or such other peri2 odic basis as the Secretary may provide). 

3 ‘‘(B) OFFEROR RESPONSIBILITIES.—An 

4 offeror of a qualified health benefits plan receiv5 ing an advance payment with respect to an indi6 vidual enrolled in the plan shall— 

7 ‘‘(i) reduce the premium charged the 

8 insured for any period by the amount of 

9 the advance payment for the period; 

10 ‘‘(ii) notify the exchange and the Sec11 retary of such reduction; and 

12 ‘‘(iii) in the case of any nonpayment 

13 of premiums by the insured— 

14 ‘‘(I) notify the Secretary of such 

15 nonpayment; and 

16 ‘‘(II) allow a 3-month grace pe17 riod for nonpayment of premiums be18 fore discontinuing coverage. 

19 ‘‘(d) COORDINATION WITH VERIFICATION OF LAW20 FUL PRESENCE.—No advance payment shall be made 

21 under this section unless there has been a verification 

22 under section 2238 of the individual’s citizenship or na23 tionality or lawful presence in the United States.’’. 


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1 SEC. 1207. DISCLOSURES TO CARRY OUT ELIGIBILITY RE2 QUIREMENTS FOR CERTAIN PROGRAMS. 

3 (a) DISCLOSURE OF TAXPAYER RETURN INFORMA4 TION AND SOCIAL SECURITY NUMBERS.— 

5 (1) TAXPAYER RETURN INFORMATION.—Sub6 section (l) of section 6103 of the Internal Revenue 

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

8 following new paragraph: 

9 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

10 TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR

11 CERTAIN PROGRAMS.— 

12 ‘‘(A) IN GENERAL.—The Secretary, upon 

13 written request from the Secretary of Health 

14 and Human Services, shall disclose to officers, 

15 employees, and contractors of the Department 

16 of Health and Human Services return informa17 tion of any taxpayer whose income is relevant 

18 in determining any credit under section 36B or 

19 any cost-sharing subsidy under section 2247 of 

20 the Social Security Act or eligibility for partici21 pation in a State medicaid program under title 

22 XIX of such Act, a State’s children’s health in23 surance program under title XXI of such Act, 

24 or a basic health program under section 2228 

25 of such Act. Such return information shall be 

26 limited to— 


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1 ‘‘(i) taxpayer identity information 

2 with respect to such taxpayer, 

3 ‘‘(ii) the filing status of such tax4 payer, 

5 ‘‘(iii) the number of individuals for 

6 whom a deduction is allowed under section 

7 151 with respect to the taxpayer (including 

8 the taxpayer and the taxpayer’s spouse), 

9 ‘‘(iv) the modified gross income (as 

10 defined in section 36B) of such taxpayer 

11 and each of the other individuals included 

12 under clause (iii), 

13 ‘‘(v) such other information as is pre14 scribed by the Secretary by regulation as 

15 might indicate whether the taxpayer is eli16 gible for such credit or subsidy (and the 

17 amount thereof), and 

18 ‘‘(vi) the taxable year with respect to 

19 which the preceding information relates or, 

20 if applicable, the fact that such informa21 tion is not available. 

22 ‘‘(B) INFORMATION TO EXCHANGE AND

23 STATE AGENCIES.—The Secretary of Health 

24 and Human Services may disclose to an ex25 change established under title XXII of the SoVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00175 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 cial Security Act or its contractors, or to a 

2 State agency administering a State program de3 scribed in subparagraph (A) or its contractors, 

4 any inconsistency between the information pro5 vided by the exchange or State agency to the 

6 Secretary and the information provided to the 

7 Secretary under subparagraph (A). 

8 ‘‘(C) RESTRICTION ON USE OF DISCLOSED

9 INFORMATION.—Return information disclosed 

10 under subparagraph (A) or (B) may be used by 

11 officers, employees, and contractors of the De12 partment of Health and Human Services, an 

13 exchange, or a State agency only for the pur14 poses of, and to the extent necessary in— 

15 ‘‘(i) establishing eligibility for partici16 pation in the exchange, and verifying the 

17 appropriate amount of, any credit or sub18 sidy described in subparagraph (A), 

19 ‘‘(ii) determining eligibility for partici20 pation in the State programs described in 

21 subparagraph (A).’’. 

22 (2) SOCIAL SECURITY NUMBERS.—Section 

23 205(c)(2)(C) of the Social Security Act is amended 

24 by adding at the end the following new clause: 


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1 ‘‘(x) The Secretary of Health and 

2 Human Services, and the exchanges estab3 lished under title XXII, are authorized to 

4 collect and use the names and social secu5 rity account numbers of individuals as re6 quired to administer the provisions of, and 

7 the amendments made by, America’s 

8 Healthy Future Act of 2009.’’. 

9 (b) CONFIDENTIALITY AND DISCLOSURE.—Para10 graph (3) of section 6103(a) of such Code is amended by 

11 striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 

12 (c) PROCEDURES AND RECORDKEEPING RELATED

13 TO DISCLOSURES.—Paragraph (4) of section 6103(p) of 

14 such Code is amended— 

15 (1) by inserting ‘‘, or any entity described in 

16 subsection (l)(21),’’ after ‘‘or (20)’’ in the matter 

17 preceding subparagraph (A), 

18 (2) by inserting ‘‘or any entity described in sub19 section (l)(21),’’ after ‘‘or (o)(1)(A)’’ in subpara20 graph (F)(ii), and 

21 (3) by inserting ‘‘or any entity described in sub22 section (l)(21),’’ after ‘‘or (20)’’ both places it ap23 pears in the matter after subparagraph (F). 


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1 (d) UNAUTHORIZED DISCLOSURE OR INSPECTION.— 

2 Paragraph (2) of section 7213(a) of such Code is amended 

3 by striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 

4 SEC. 1208. PREMIUM CREDIT AND SUBSIDY REFUNDS AND 

5 PAYMENTS DISREGARDED FOR FEDERAL 

6 AND FEDERALLY-ASSISTED PROGRAMS. 

7 For purposes of determining the eligibility of any in8 dividual for benefits or assistance, or the amount or extent 

9 of benefits or assistance, under any Federal program or 

10 under any State or local program financed in whole or in 

11 part with Federal funds— 

12 (1) any credit or refund allowed or made to any 

13 individual by reason of section 36B of the Internal 

14 Revenue Code of 1986 (as added by section 1205) 

15 shall not be taken into account as income and shall 

16 not be taken into account as resources for the month 

17 of receipt and the following 2 months; and 

18 (2) any cost-sharing subsidy payment or ad19 vance payment of the credit allowed under such sec20 tion 36B that is made under section 2247 or 2248 

21 of the Social Security Act (as added by section 

22 1206) shall be treated as made to the qualified 

23 health benefits plan in which an individual is en24 rolled and not to that individual. 


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1 SEC. 1209. FAIL-SAFE MECHANISM TO PREVENT INCREASE 

2 IN FEDERAL BUDGET DEFICIT. 

3 (a) ESTIMATE AND CERTIFICATION OF EFFECT OF

4 ACT ON BUDGET DEFICIT.— 

5 (1) IN GENERAL.—The President shall include 

6 in the submission under section 1105 of title 31, 

7 United States Code, of the budget of the United 

8 States Government for fiscal year 2013 and each fis9 cal year thereafter an estimate of the budgetary ef10 fects for the fiscal year of the provisions of (and the 

11 amendments made by) this Act, based on the infor12 mation available as of the date of such submission. 

13 (2) CERTIFICATION.—The President shall in14 clude with the estimate under paragraph (1) for any 

15 fiscal year a certification as to whether the sum of 

16 the decreases in revenues and increases in outlays 

17 for the fiscal year by reason of the provisions of 

18 (and the amendments made by) this Act exceed (or 

19 do not exceed) the sum of the increases in revenues 

20 and decreases in outlays for the fiscal year by reason 

21 of the provisions and amendments. 

22 (b) EFFECT OF DEFICIT.—If the President certifies 

23 an excess under subsection (a)(2) for any fiscal year— 

24 (1) the President shall include with the certifi25 cation the percentage by which the credits allowable 

26 under section 36B of the Internal Revenue Code of 


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1 1986 and the cost-sharing subsidies under section 

2 2247 of the Social Security Act must be reduced for 

3 plan years beginning during such fiscal year such 

4 that there is an aggregate decrease in the amount 

5 of such credits and subsidies equal to the amount of 

6 such excess; and 

7 (2) the President shall instruct the Secretary of 

8 Health and Human Services and the Secretary of 

9 the Treasury to reduce such credits and subsidies 

10 for such plan years by such percentage for purposes 

11 of applying section 36B(b)(4) of such Code and sec12 tion 2247(c)(3) of such Act. 

13 Subpart B—Credit for Small Employers 

14 SEC. 1221. CREDIT FOR EMPLOYEE HEALTH INSURANCE 

15 EXPENSES OF SMALL BUSINESSES. 

16 (a) IN GENERAL.—Subpart D of part IV of sub17 chapter A of chapter 1 of the Internal Revenue Code of 

18 1986 (relating to business-related credits) is amended by 

19 inserting after section 45Q the following: 

20 ‘‘SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF 

21 SMALL EMPLOYERS. 

22 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

23 in the case of an eligible small employer, the small em24 ployer health insurance credit determined under this secVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00180 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tion for any taxable year in the credit period is the amount 

2 determined under subsection (b). 

3 ‘‘(b) HEALTH INSURANCE CREDIT AMOUNT.—Sub4 ject to subsection (c), the amount determined under this 

5 subsection with respect to any eligible small employer is 

6 equal to 50 percent (35 percent in the case of a tax-exempt 

7 eligible small employer) of the lesser of— 

8 ‘‘(1) the aggregate amount of nonelective con9 tributions the employer made on behalf of its em10 ployees during the taxable year under the arrange11 ment described in subsection (d)(4) for premiums 

12 for qualified health benefits plans offered by the em13 ployer to its employees through an exchange, or 

14 ‘‘(2) the aggregate amount of nonelective con15 tributions which the employer would have made dur16 ing the taxable year under the arrangement if each 

17 employee taken into account under paragraph (1) 

18 had enrolled in a qualified health benefits plan which 

19 had a premium equal to the average premium (as 

20 determined by the Secretary of Health and Human 

21 Services) for the small group market in the exchange 

22 through which the employee is eligible for coverage. 

23 In the case of a taxable year beginning in 2013, the credit 

24 determined under this section shall be determined only 


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1 with respect to premiums for coverage after June 30, 

2 2013. 

3 ‘‘(c) LIMITATIONS ON CREDIT.— 

4 ‘‘(1) PHASEOUT OF CREDIT AMOUNT BASED ON

5 NUMBER OF EMPLOYEES AND AVERAGE WAGES.— 

6 The amount of the credit determined under sub7 section (b) without regard to this subsection shall be 

8 reduced (but not below zero) by the sum of the fol9 lowing amounts: 

10 ‘‘(A) Such amount multiplied by a fraction 

11 the numerator of which is the total number of 

12 full-time equivalent employees of the employer 

13 in excess of 10 and the denominator of which 

14 is 15. 

15 ‘‘(B) Such amount multiplied by a fraction 

16 the numerator of which is the average annual 

17 wages of the employer in excess of the dollar 

18 amount in effect under subsection (d)(3)(B) 

19 and the denominator of which is $20,000. 

20 ‘‘(2) STATE FAILURE TO ADOPT INSURANCE

21 RATING REFORMS.—No credit shall be determined 

22 under this section with respect to contributions by 

23 the employer for any qualified health benefits plans 

24 purchased through an exchange for any month of 

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1 lishing the exchange has in effect the insurance rat2 ing reforms described in subtitle A of title XXII of 

3 the Social Security Act. 

4 ‘‘(d) ELIGIBLE SMALL EMPLOYER.—For purposes of 

5 this section— 

6 ‘‘(1) IN GENERAL.—The term ‘eligible small 

7 employer’ means, with respect to any taxable year, 

8 an employer— 

9 ‘‘(A) which has no more than 25 full-time 

10 equivalent employees for the taxable year, 

11 ‘‘(B) the average annual wages of which do 

12 not exceed an amount equal to the amount in 

13 effect under paragraph (3)(B) for the taxable 

14 year plus $20,000, and 

15 ‘‘(C) which has in effect an arrangement 

16 described in paragraph (4). 

17 ‘‘(2) FULL-TIME EQUIVALENT EMPLOYEES.— 

18 ‘‘(A) IN GENERAL.—The term ‘full-time 

19 equivalent employees’ means a number of em20 ployees equal to the number determined by di21 viding— 

22 ‘‘(i) the total number of hours for 

23 which wages were paid by the employer to 

24 employees during the taxable year, by 

25 ‘‘(ii) 2,080. 


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1 Such number shall be rounded to the next low2 est whole number if not otherwise a whole num3 ber. 

4 ‘‘(B) EXCESS HOURS NOT COUNTED.—If 

5 an employee works in excess of 2,080 hours 

6 during any taxable year, such excess shall not 

7 be taken into account under subparagraph (A). 

8 ‘‘(C) SPECIAL RULES.—The Secretary 

9 shall prescribe such regulations, rules, and 

10 guidance as may be necessary to apply this 

11 paragraph to employees who are not com12 pensated on an hourly basis. 

13 ‘‘(3) AVERAGE ANNUAL WAGES.— 

14 ‘‘(A) IN GENERAL.—The average annual 

15 wages of an eligible small employer for any tax16 able year is the amount determined by divid17 ing— 

18 ‘‘(i) the aggregate amount of wages 

19 which were paid by the employer to em20 ployees during the taxable year, by 

21 ‘‘(ii) the number of full-time equiva22 lent employees of the employee determined 

23 under paragraph (2) for the taxable year. 


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1 Such amount shall be rounded to the next low2 est multiple of $1,000 if not otherwise such a 

3 multiple. 

4 ‘‘(B) DOLLAR AMOUNT.—For purposes of 

5 paragraph (1)(B)— 

6 ‘‘(i) 2010.—The dollar amount in ef7 fect under this paragraph for taxable years 

8 beginning in 2010 is $20,000. 

9 ‘‘(ii) SUBSEQUENT YEARS.—In the 

10 case of a taxable year beginning in a cal11 endar year after 2010, the dollar amount 

12 in effect under this paragraph shall be 

13 equal to $20,000, multiplied by the cost-of14 living adjustment determined under section 

15 1(f)(3) for the calendar year, determined 

16 by substituting ‘calendar year 2009’ for 

17 ‘calendar year 1992’ in subparagraph (B) 

18 thereof. 

19 ‘‘(4) CONTRIBUTION ARRANGEMENT.—An ar20 rangement is described in this paragraph if it re21 quires an eligible small employer to make a nonelec22 tive contribution on behalf of each employee who en23 rolls in a qualified health benefits plan offered to 

24 employees by the employer through an exchange in 

25 an amount equal to a uniform percentage (not less 


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1 than 50 percent) of the premium cost of the quali2 fied health benefits plan. 

3 ‘‘(5) SEASONAL WORKER HOURS AND WAGES

4 NOT COUNTED.—For purposes of this subsection— 

5 ‘‘(A) IN GENERAL.—The number of hours 

6 worked by, and wages paid to, a seasonal work7 er of an employer shall not be taken into ac8 count in determining the full-time equivalent 

9 employees and average annual wages of the em10 ployer. 

11 ‘‘(B) DEFINITION OF SEASONAL WORK12 ER.—The term ‘seasonal worker’ means an in13 dividual who performs labor or services on a 

14 seasonal basis where, ordinarily, the employ15 ment pertains to or is of the kind exclusively 

16 performed at certain seasons or periods of the 

17 year and which, from its nature, may not be 

18 continuous or carried on throughout the year. 

19 ‘‘(e) OTHER RULES AND DEFINITIONS.—For pur20 poses of this section— 

21 ‘‘(1) EMPLOYEE.— 

22 ‘‘(A) CERTAIN EMPLOYEES EXCLUDED.— 

23 The term ‘employee’ shall not include— 

24 ‘‘(i) an employee within the meaning 

25 of section 401(c)(1), 


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1 ‘‘(ii) any 2-percent shareholder (as de2 fined in section 1372(b)) of an eligible 

3 small business which is an S corporation, 

4 ‘‘(iii) any 5-percent owner (as defined 

5 in section 416(i)(1)(B)(i)) of an eligible 

6 small business, or 

7 ‘‘(iv) any individual who bears any of 

8 the relationships described in subpara9 graphs (A) through (G) of section 

10 152(d)(2) to, or is a dependent described 

11 in section 152(d)(2)(H) of, an individual 

12 described in clause (i), (ii), or (iii). 

13 ‘‘(B) LEASED EMPLOYEES.—The term 

14 ‘employee’ shall include a leased employee with15 in the meaning of section 414(n). 

16 ‘‘(2) CREDIT PERIOD.—The term ‘credit period’ 

17 means, with respect to any eligible small employer, 

18 the 2-consecutive-taxable year period beginning with 

19 the 1st taxable year in which the employer (or any 

20 predecessor) offers 1 or more qualified health bene21 fits plans to its employees through an exchange. If 

22 no credit is allowed to an employer (or predecessor) 

23 under this section by reason of subsection (c)(2) (re24 lating to failure by States to adopt insurance rating 

25 reforms), the credit period with respect to the emVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00187 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ployer shall not begin until the 1st taxable year fol2 lowing the taxable year in which the State has in ef3 fect the insurance rating reforms described in such 

4 subsection. 

5 ‘‘(3) NONELECTIVE CONTRIBUTION.—The term 

6 ‘nonelective contribution’ means an employer con7 tribution other than an employer contribution pursu8 ant to a salary reduction arrangement. 

9 ‘‘(4) WAGES.—The term ‘wages’ has the mean10 ing given such term by section 3121(a) (determined 

11 without regard to any dollar limitation contained in 

12 such section). 

13 ‘‘(5) AGGREGATION AND OTHER RULES MADE

14 APPLICABLE.— 

15 ‘‘(A) AGGREGATION RULES.—All employ16 ers treated as a single employer under sub17 section (b), (c), (m), or (o) of section 414 shall 

18 be treated as a single employer for purposes of 

19 this section. 

20 ‘‘(B) OTHER RULES.—Rules similar to the 

21 rules of subsections (c), (d), and (e) of section 

22 52 shall apply. 

23 ‘‘(f) CREDIT MADE AVAILABLE TO TAX-EXEMPT ELI24 GIBLE SMALL EMPLOYERS.— 


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1 ‘‘(1) IN GENERAL.—In the case of a tax-exempt 

2 eligible small employer, there shall be treated as a 

3 credit allowable under subpart C (and not allowable 

4 under this subpart) the lesser of— — 

5 ‘‘(A) the amount of the credit determined 

6 under this section with respect to such em7 ployer, or 

8 ‘‘(B) the amount of the payroll taxes of the 

9 employer during the calendar year in which the 

10 taxable year begins. 

11 ‘‘(2) TAX-EXEMPT ELIGIBLE SMALL EM12 PLOYER.—For purposes of this section, the term 

13 ‘tax-exempt eligible small employer’ means an eligi14 ble small employer which is any organization de15 scribed in section 501(c) which is exempt from tax16 ation under section 501(a). 

17 ‘‘(3) PAYROLL TAXES.—For purposes of this 

18 subsection— 

19 ‘‘(A) IN GENERAL.—The term ‘payroll 

20 taxes’ means— 

21 ‘‘(i) amounts required to be withheld 

22 from the employees of the tax-exempt eligi23 ble small employer under section 3401(a), 


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1 ‘‘(ii) amounts required to be withheld 

2 from such employees under section 

3 3101(b), and 

4 ‘‘(iii) amounts of the taxes imposed on 

5 the tax-exempt eligible small employer 

6 under section 3111(b). 

7 ‘‘(B) SPECIAL RULE.—A rule similar to 

8 the rule of section 24(d)(2)(C) shall apply for 

9 purposes of subparagraph (A). 

10 ‘‘(g) APPLICATION OF SECTION FOR CALENDAR

11 YEARS 2011 AND 2012.—In the case of any taxable year 

12 beginning in 2011 or 2012, the following modifications to 

13 this section shall apply in determining the amount of the 

14 credit under subsection (a): 

15 ‘‘(1) NO CREDIT PERIOD REQUIRED.—The 

16 credit shall be determined without regard to whether 

17 the taxable year is in a credit period and for pur18 poses of applying this section to taxable years begin19 ning after 2012, no credit period shall be treated as 

20 beginning with a taxable year beginning before 

21 2013. 

22 ‘‘(2) AMOUNT OF CREDIT.—The amount of the 

23 credit determined under subsection (b) shall be de24 termined— 


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1 ‘‘(A) by substituting ‘35 percent (25 per2 cent in the case of a tax-exempt eligible small 

3 employer)’ for ‘50 percent (35 percent in the 

4 case of a tax-exempt eligible small employer)’, 

5 ‘‘(B) by reference to an eligible small em6 ployer’s nonelective contributions for premiums 

7 paid for health insurance coverage (within the 

8 meaning of section 9832(b)(1)) of an employee, 

9 and 

10 ‘‘(C) by substituting for the average pre11 mium determined under subsection (b)(2) the 

12 amount the Secretary of Health and Human 

13 Services determines is the average premium for 

14 the small group market in the State in which 

15 the employer is offering health insurance cov16 erage (or for such area within the State as is 

17 specified by the Secretary). 

18 ‘‘(3) STATE RATING REFORM LIMITATION.—The 

19 limitation of paragraph (2) of subsection (c) shall 

20 not apply. 

21 ‘‘(4) CONTRIBUTION ARRANGEMENT.—An ar22 rangement shall not fail to meet the requirements of 

23 subsection (d)(4) solely because it provides for the 

24 offering of insurance outside of an exchange. 


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1 ‘‘(h) INSURANCE DEFINITIONS.—Any term used in 

2 this section which is also used in title XXII of the Social 

3 Security Act shall have the meaning given such term by 

4 such title. 

5 ‘‘(i) REGULATIONS.—The Secretary shall prescribe 

6 such regulations as may be necessary to carry out the pro7 visions of this section, including regulations to prevent the 

8 avoidance of the 2-year limit on the credit period through 

9 the use of successor entities and the avoidance of the limi10 tations under paragraphs (1) and (2) of subsection (c) 

11 through the use of multiple entities.’’. 

12 (b) CREDIT TO BE PART OF GENERAL BUSINESS

13 CREDIT.—Section 38(b) of the Internal Revenue Code of 

14 1986 (relating to current year business credit) is amended 

15 by striking ‘‘plus’’ at the end of paragraph (34), by strik16 ing the period at the end of paragraph (35) and inserting 

17 ‘‘, plus’’, and by inserting after paragraph (35) the fol18 lowing: 

19 ‘‘(36) the small employer health insurance cred20 it determined under section 45R.’’. 

21 (c) CREDIT ALLOWED AGAINST ALTERNATIVE MIN22 IMUM TAX.—Section 38(c)(4)(B) of the Internal Revenue 

23 Code of 1986 (defining specified credits) is amended by 

24 redesignating clauses (vi), (vii), and (viii) as clauses (vii), 


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1 (viii), and (ix), respectively, and by inserting after clause 

2 (v) the following new clause: 

3 ‘‘(vi) the credit determined under sec4 tion 45R,’’. 

5 (d) DISALLOWANCE OF DEDUCTION FOR CERTAIN

6 EXPENSES FOR WHICH CREDIT ALLOWED.— 

7 (1) IN GENERAL.—Section 280C of the Internal 

8 Revenue Code of 1986 (relating to disallowance of 

9 deduction for certain expenses for which credit al10 lowed), as amended by section 1205(b), is amended 

11 by adding at the end the following new subsection: 

12 ‘‘(h) CREDIT FOR EMPLOYEE HEALTH INSURANCE

13 EXPENSES OF SMALL EMPLOYERS.—No deduction shall 

14 be allowed for that portion of the premiums for qualified 

15 health benefits plans (as defined in section 2201(b) of the 

16 Social Security Act) paid by an employer which is equal 

17 to the amount of the credit determined under section 

18 45R(a).’’. 

19 (2) DEDUCTION FOR EXPIRING CREDITS.—Sec20 tion 196(c) of such Code is amended by striking 

21 ‘‘and’’ at the end of paragraph (12), by striking the 

22 period at the end of paragraph (13) and inserting ‘‘, 

23 and’’, and by adding at the end the following new 

24 paragraph: 


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1 ‘‘(14) the small employer health insurance cred2 it determined under section 45R(a).’’. 

3 (e) CLERICAL AMENDMENT.—The table of sections 

4 for subpart D of part IV of subchapter A of chapter 1 

5 of the Internal Revenue Code of 1986 is amended by add6 ing at the end the following: 

‘‘Sec. 45R. Employee health insurance expenses of small employers.’’. 

7 (f) EFFECTIVE DATES.— 

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

9 this section shall apply to amounts paid or incurred 

10 in taxable years beginning after December 31, 2010. 

11 (2) MINIMUM TAX.—The amendments made by 

12 subsection (c) shall apply to credits determined 

13 under section 45R of the Internal Revenue Code of 

14 1986 in taxable years beginning after December 31, 

15 2010, and to carrybacks of such credits. 

16 Subtitle D—Shared Responsibility 

17 PART I—INDIVIDUAL RESPONSIBILITY 

18 SEC. 1301. EXCISE TAX ON INDIVIDUALS WITHOUT ESSEN19 TIAL HEALTH BENEFITS COVERAGE. 

20 (a) IN GENERAL.—Subtitle D of the Internal Rev21 enue Code of 1986 is amended by adding at the end the 

22 following new chapter: 

23 ‘‘CHAPTER 48—MAINTENANCE OF 

24 ESSENTIAL HEALTH BENEFITS COVERAGE 

‘‘Sec. 5000A. Failure to maintain essential health benefits coverage. 


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1 ‘‘SEC. 5000A. FAILURE TO MAINTAIN ESSENTIAL HEALTH 

2 BENEFITS COVERAGE. 

3 ‘‘(a) REQUIREMENT TO MAINTAIN ESSENTIAL

4 HEALTH BENEFITS COVERAGE.—If an individual is an 

5 applicable individual for any month beginning after June 

6 30, 2013, the individual is required to be covered by essen7 tial health benefits coverage for such month. 

8 ‘‘(b) IMPOSITION OF TAX.— 

9 ‘‘(1) IN GENERAL.—If an applicable individual 

10 fails to meet the requirement of subsection (a) for 

11 1 or more months during any calendar year begin12 ning after 2013, then, except as provided in sub13 section (d), there is hereby imposed a tax with re14 spect to the individual in the amount determined 

15 under subsection (c). 

16 ‘‘(2) INCLUSION WITH INCOME TAX RETURN.— 

17 Any tax imposed by this section with respect to any 

18 month shall be included with a taxpayer’s return of 

19 tax imposed by chapter 1 for the taxable year which 

20 includes such month. 

21 ‘‘(3) LIABILITY FOR TAX.—If an individual with 

22 respect to whom tax is imposed by this section for 

23 any month— 

24 ‘‘(A) is a dependent (as defined in section 

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1 payer’s taxable year including such month, such 

2 other taxpayer shall be liable for such tax, or 

3 ‘‘(B) files a joint return for the taxable 

4 year including such month, such individual and 

5 the spouse of such individual shall be jointly lia6 ble for such tax. 

7 ‘‘(c) AMOUNT OF TAX.— 

8 ‘‘(1) IN GENERAL.—The tax determined under 

9 this subsection for any month with respect to any individual is an amount equal to 1 10 ⁄12 of the applicable 

11 dollar amount for the calendar year. 

12 ‘‘(2) DOLLAR LIMITATION.—The amount of the 

13 tax imposed by this section on any taxpayer for any 

14 taxable year with respect to all individuals for whom 

15 the taxpayer is liable under subsection (b)(3) shall 

16 not exceed an amount equal to twice the applicable 

17 dollar amount for the calendar year with or within 

18 which the taxable year ends. 

19 ‘‘(3) APPLICABLE DOLLAR AMOUNT.—For pur20 poses of paragraph (1)— 

21 ‘‘(A) IN GENERAL.—Except as provided in 

22 subparagraph (B), the applicable dollar amount 

23 is $750. 


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1 ‘‘(B) PHASE IN.—The applicable dollar 

2 amount is $200 for 2014, $400 for 2015, and 

3 $600 for 2016. 

4 ‘‘(C) INDEXING OF AMOUNT.—In the case 

5 of any calendar year beginning after 2017, the 

6 applicable dollar amount shall be equal to $750, 

7 increased by an amount equal to— 

8 ‘‘(i) $750, multiplied by 

9 ‘‘(ii) the cost-of-living adjustment de10 termined under section 1(f)(3) for the cal11 endar year, determined by substituting 

12 ‘calendar year 2016’ for ‘calendar year 

13 1992’ in subparagraph (B) thereof. 

14 If the amount of any increase under clause (i) 

15 is not a multiple of $50, such increase shall be 

16 rounded to the next lowest multiple of $50. 

17 ‘‘(4) TERMS RELATING TO INCOME AND FAMI18 LIES.—For purposes of this section— 

19 ‘‘(A) FAMILY SIZE.—The family size in20 volved with respect to any taxpayer shall be 

21 equal to the number of individuals for whom 

22 the taxpayer is allowed a deduction under sec23 tion 151 (relating to allowance of deduction for 

24 personal exemptions) for the taxable year. 


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1 ‘‘(B) HOUSEHOLD INCOME.—The term 

2 ‘household income’ means, with respect to any 

3 taxpayer, an amount equal to the sum of— 

4 ‘‘(i) the modified gross income of the 

5 taxpayer, plus 

6 ‘‘(ii) the aggregate modified gross in7 comes of all other individuals taken into 

8 account in determining the taxpayer’s fam9 ily size under paragraph (1). 

10 ‘‘(C) MODIFIED GROSS INCOME.—The 

11 term ‘modified gross income’ means gross in12 come— 

13 ‘‘(i) decreased by the amount of any 

14 deduction allowable under paragraphs (1), 

15 (3), or (4) of section 62(a), 

16 ‘‘(ii) increased by the amount of inter17 est received or accrued during the taxable 

18 year which is exempt from tax imposed by 

19 this chapter, and 

20 ‘‘(iii) determined without regard to 

21 sections 911, 931, and 933. 

22 ‘‘(D) POVERTY LINE.— 

23 ‘‘(i) IN GENERAL.—The term ‘poverty 

24 line’ has the meaning given that term in 


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1 section 2110(c)(5) of the Social Security 

2 Act (42 U.S.C. 1397jj(c)(5)). 

3 ‘‘(ii) POVERTY LINE USED.—In the 

4 case of any taxable year ending with or 

5 within a calendar year, the poverty line 

6 used shall be the most recently published 

7 poverty line as of the 1st day of the such 

8 calendar year. 

9 ‘‘(d) APPLICABLE INDIVIDUAL.—For purposes of this 

10 section— 

11 ‘‘(1) IN GENERAL.—The term ‘applicable indi12 vidual’ means, with respect to any month, any indi13 vidual who has attained the age of 18 before the be14 ginning of the month other than an individual de15 scribed in paragraph (2) or (3). 

16 ‘‘(2) RELIGIOUS EXEMPTIONS.— 

17 ‘‘(A) RELIGIOUS CONSCIENCE EXEMP18 TION.—Such term shall not include any indi19 vidual for any month if such individual has in 

20 effect an exemption under section 2236(f) of 

21 the Social Security Act which certifies that such 

22 individual is a member of a recognized religious 

23 sect or division thereof described in section 

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1 nets or teachings of such sect or division as de2 scribed in such section. 

3 ‘‘(B) HEALTH CARE SHARING MINISTRY.— 

4 ‘‘(i) IN GENERAL.—Such term shall 

5 not include any individual for any month if 

6 such individual is a member of a health 

7 care sharing ministry for the month. 

8 ‘‘(ii) HEALTH CARE SHARING MIN9 ISTRY.—The term ‘health care sharing 

10 ministry’ means an organization— 

11 ‘‘(I) which is described in section 

12 501(c)(3) and is exempt from taxation 

13 under section 501(a), 

14 ‘‘(II) members of which share a 

15 common set of ethical or religious be16 liefs and share medical expenses 

17 among members in accordance with 

18 those beliefs and without regard to 

19 the State in which a member resides 

20 or is employed, 

21 ‘‘(III) members of which retain 

22 membership even after they develop a 

23 medical condition, 

24 ‘‘(IV) which (or a predecessor of 

25 which) has been in existence at all 


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1 times since December 31, 1999, and 

2 medical expenses of its members have 

3 been shared during the entire period 

4 of its existence, and 

5 ‘‘(V) which conducts an annual 

6 audit which is performed by an inde7 pendent certified public accounting 

8 firm in accordance with generally ac9 cepted accounting principles and 

10 which is made available to the public 

11 upon request. 

12 ‘‘(3) UNDOCUMENTED ALIENS.—Such term 

13 shall not include an individual for any month if for 

14 the month the individual is not a citizen or national 

15 of the United States, an alien lawfully admitted to 

16 the United States for permanent residence, or an 

17 alien lawfully present in the United States. 

18 ‘‘(e) EXEMPTIONS FROM TAX.—No tax shall be im19 posed under subsection (a) with respect to— 

20 ‘‘(1) MONTHS DURING SHORT COVERAGE

21 GAPS.—Any month the last day of which occurred 

22 during a period in which the applicable individual 

23 was not covered by essential health benefits coverage 

24 for a period of less than 3 months. 


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1 ‘‘(2) INDIVIDUALS WHO CANNOT AFFORD COV2 ERAGE.— 

3 ‘‘(A) IN GENERAL.—Any applicable indi4 vidual if the applicable individual’s required 

5 contribution for a calendar year exceeds 8 per6 cent of such individual’s household income for 

7 the second taxable year preceding the taxable 

8 year described in subsection (b)(2). For pur9 poses of applying this subparagraph, the tax10 payer’s household income shall be increased by 

11 any exclusion from gross income for any portion 

12 of the required contribution made through a 

13 salary reduction arrangement. 

14 ‘‘(B) REQUIRED CONTRIBUTION.—For 

15 purposes of this paragraph, the term ‘required 

16 contribution’ means— 

17 ‘‘(i) in the case of an individual eligi18 ble to purchase health insurance coverage 

19 through an employer other than through 

20 an exchange, the portion of the annual pre21 mium which would be paid by the indi22 vidual (without regard to whether paid 

23 through salary reduction or otherwise) for 

24 health insurance coverage which is the lowVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00202 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 est cost coverage offered through the em2 ployer, or 

3 ‘‘(ii) in the case of any individual not 

4 described in clause (i), the annual pre5 mium for the lowest cost bronze plan avail6 able in the individual market through the 

7 exchange in the State in which the indi8 vidual resides (without regard to whether 

9 the individual is eligible to purchase a 

10 qualified health benefits plan through the 

11 exchange), reduced by the amount of the 

12 credit allowable under section 36B for the 

13 taxable year (determined as if the indi14 vidual was covered by a qualified health 

15 benefits plan offered through the exchange 

16 for the entire taxable year). 

17 ‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI18 GIBLE FOR COVERAGE THROUGH EMPLOYEE.— 

19 If an applicable individual is eligible for cov20 erage through an employer by reason of a rela21 tionship to an employee, the determination 

22 under subparagraph (B)(i) shall be made by 

23 reference to the affordability of the coverage to 

24 the employee. 


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1 ‘‘(D) INDEXING.—In the case of plan years 

2 beginning in any calendar year after 2013, sub3 paragraph (A) shall be applied by substituting 

4 for ‘8 percent’ the percentage the Secretary of 

5 Health and Human Services determines reflects 

6 the excess of the rate of premium growth be7 tween the preceding calendar year and 2012 

8 over the rate of income growth for such period. 

9 ‘‘(3) TAXPAYERS WITH INCOME UNDER 100

10 PERCENT OF POVERTY LINE.—Any applicable indi11 vidual who has a household income for the for the 

12 second taxable year preceding the taxable year de13 scribed in subsection (b)(2) which is less than 100 

14 percent of the poverty line for the size of the family 

15 involved (determined in the same manner as under 

16 subsection (b)(4)). 

17 ‘‘(4) NATIVE AMERICANS.—Any applicable indi18 vidual who is an Indian as defined in section 4 of 

19 the Indian Health Care Improvement Act. 

20 ‘‘(5) HARDSHIPS.—Any applicable individual 

21 who is determined by the Secretary to have suffered 

22 a hardship with respect to the capability to obtain 

23 coverage under a qualified health benefits plan. 

24 ‘‘(f) ESSENTIAL HEALTH BENEFITS COVERAGE.— 

25 For purposes of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘essential health 

2 benefits coverage’ means any of the following: 

3 ‘‘(A) QUALIFIED HEALTH BENEFITS PLAN

4 COVERAGE.—Coverage under a qualified health 

5 benefits plan. 

6 ‘‘(B) GRANDFATHERED HEALTH BENEFITS

7 PLAN.—Coverage under a grandfathered health 

8 benefits plan (as defined in section 2221(c) of 

9 the Social Security Act). 

10 ‘‘(C) EMPLOYER-SPONSORED PLAN.—Cov11 erage under an eligible employer-sponsored 

12 plan. 

13 ‘‘(D) MEDICARE.—Coverage under part A 

14 of title XVIII of the Social Security Act. 

15 ‘‘(E) MEDICAID.—Coverage for medical as16 sistance under title XIX of the Social Security 

17 Act. 

18 ‘‘(F) MEMBERS OF THE ARMED FORCES

19 AND DEPENDENTS (INCLUDING TRICARE).— 

20 Coverage under chapter 55 of title 10, United 

21 States Code, including similar coverage fur22 nished under section 1781 of title 38 of such 

23 Code. 

24 ‘‘(G) VA.—Coverage under the veteran’s 

25 health care program under chapter 17 of title 


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1 38, United States Code, but only if the cov2 erage for the individual involved is determined 

3 by the Secretary of Health and Human Services 

4 in coordination with the Secretary to be not less 

5 than a level specified by the Secretary of Health 

6 and Human Services, based on the individual’s 

7 priority for services as provided under section 

8 1705(a) of such title. 

9 ‘‘(H) FEDERAL EMPLOYEES COVERAGE.— 

10 Coverage under the Federal employees health 

11 benefits program under chapter 89 of title 5, 

12 United States Code. 

13 ‘‘(I) OTHER COVERAGE.—Such other 

14 health benefits coverage, such as a State health 

15 benefits risk pool or coverage while incarcer16 ated, as the Secretary of Health and Human 

17 Services, in coordination with the Secretary, 

18 recognizes for purposes of this subsection. 

19 ‘‘(2) ELIGIBLE EMPLOYER-SPONSORED PLAN.— 

20 The term ‘eligible employer-sponsored plan’ means, 

21 with respect to any employee, a health benefits plan 

22 (other than a grandfathered health benefits plan) of23 fered by an employer to the employee, but only if— 

24 ‘‘(A) in the case of a small employer, the 

25 plan is a qualified health benefits plan, and 


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1 ‘‘(B) in the case of a large employer plan, 

2 the plan meets the requirements of section 

3 2244 of the Social Security Act. 

4 ‘‘(3) INSURANCE-RELATED TERMS.—Any term 

5 used in this section which is also used in title XXII 

6 of the Social Security Act shall have the same mean7 ing as when used in such title. 

8 ‘‘(g) MODIFICATIONS OF SUBTITLE F.—Notwith9 standing any other provision of law— 

10 ‘‘(1) WAIVER OF CRIMINAL AND CIVIL PEN11 ALTIES AND INTEREST.—In the case of any failure 

12 by a taxpayer to timely pay any tax imposed by this 

13 section— 

14 ‘‘(A) such taxpayer shall not be subject to 

15 any criminal prosecution or penalty with respect 

16 to such failure, and 

17 ‘‘(B) no penalty, addition to tax, or inter18 est shall be imposed with respect to such failure 

19 or such tax. 

20 ‘‘(2) LIMITED COLLECTION ACTIONS PER21 MITTED.—In the case of the assessment of any tax 

22 imposed by this section, the Secretary shall not take 

23 any action with respect to the collection of such tax 

24 other than— 


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1 ‘‘(A) giving notice and demand for such 

2 tax under section 6303, 

3 ‘‘(B) crediting under section 6402(a) the 

4 amount of any overpayment of the taxpayer 

5 against such tax, and 

6 ‘‘(C) offsetting any payment owed by any 

7 Federal agency to the taxpayer against such tax 

8 under the Treasury offset program.’’. 

9 (b) CLERICAL AMENDMENT.—The table of chapters 

10 for subtitle D of the Internal Revenue Code of 1986 is 

11 amended by inserting after the item relating to chapter 

12 47 the following new item: 

‘‘CHAPTER 48—MAINTENANCE OF ESSENTIAL HEALTH BENEFITS

COVERAGE’’. 

13 (c) STUDY ON AFFORDABLE COVERAGE.— 

14 (1) STUDY AND REPORT.— 

15 (A) IN GENERAL.—The Comptroller Gen16 eral shall conduct a study on the affordability 

17 of health insurance coverage, including— 

18 (i) the impact of the tax credit for 

19 qualified health insurance coverage of indi20 viduals under section 36B of the Internal 

21 Revenue Code of 1986 and the tax credit 

22 for employee health insurance expenses of 

23 small employers under section 45R of such 


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1 Code on maintaining and expanding the 

2 health insurance coverage of individuals, 

3 (ii) the availability of affordable 

4 health benefits plans, and 

5 (iii) the ability of individuals to main6 tain essential health benefits coverage (as 

7 defined in section 5000A(f) of the Internal 

8 Revenue Code of 1986). 

9 (B) REPORT.—Not later than February 1, 

10 2014, the Comptroller General shall submit to 

11 the appropriate committees of Congress a re12 port on the study conducted under subpara13 graph (A), together with legislative rec14 ommendations relating to the matters studied 

15 under such subparagraph. 

16 (2) CONGRESSIONAL CONSIDERATION OF REC17 OMMENDATIONS.— 

18 (A) COMMITTEE CONSIDERATION OF PRO19 POSAL; DISCHARGE; CONTINGENCY FOR INTRO20 DUCTION.—Not later than April 1, 2014, the 

21 appropriate committees of Congress shall report 

22 legislation implementing the recommendations 

23 contained in the report described in paragraph 

24 (1)(B). If, with respect to the House involved, 

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1 lation by such date, such committees shall be 

2 deemed to be discharged from further consider3 ation of the proposal and any member of the 

4 House of Representatives or the Senate, respec5 tively, may introduce legislation implementing 

6 the recommendations contained in the proposal 

7 and such legislation shall be placed on the ap8 propriate calendar of the House involved. 

9 (B) EXPEDITED PROCEDURE.— 

10 (i) CONSIDERATION.—If legislation is 

11 reported out of committee or legislation is 

12 introduced under subparagraph (A), not 

13 later than 15 calendar days after the date 

14 on which a committee has been or could 

15 have been discharged from consideration of 

16 such legislation or such legislation is intro17 duced, the Speaker of the House of Rep18 resentatives, or the Speaker’s designee, or 

19 the majority leader of the Senate, or the 

20 leader’s designee, shall move to proceed to 

21 the consideration of the legislation. It shall 

22 also be in order for any member of the 

23 Senate or the House of Representatives, 

24 respectively, to move to proceed to the con25 sideration of the legislation at any time 


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1 after the conclusion of such 15-day period. 

2 All points of order against the legislation 

3 (and against consideration of the legisla4 tion) with the exception of points of order 

5 under the Congressional Budget Act of 

6 1974 are waived. A motion to proceed to 

7 the consideration of the legislation is privi8 leged in the Senate and highly privileged in 

9 the House of Representatives and is not 

10 debatable. The motion is not subject to 

11 amendment, to a motion to postpone con12 sideration of the legislation, or to a motion 

13 to proceed to the consideration of other 

14 business. A motion to reconsider the vote 

15 by which the motion to proceed is agreed 

16 to or not agreed to shall not be in order. 

17 If the motion to proceed is agreed to, the 

18 Senate or the House of Representatives, as 

19 the case may be, shall immediately proceed 

20 to consideration of the legislation in ac21 cordance with the Standing Rules of the 

22 Senate or the House of Representatives, as 

23 the case may be, without intervening mo24 tion, order, or other business, and the reso25 lution shall remain the unfinished business 


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1 of the Senate or the House of Representa2 tives, as the case may be, until disposed of. 

3 (ii) CONSIDERATION BY OTHER

4 HOUSE.—If, before the passage by one 

5 House of the legislation that was intro6 duced in such House, such House receives 

7 from the other House legislation as passed 

8 by such other House— 

9 (I) the legislation of the other 

10 House shall not be referred to a com11 mittee and shall immediately displace 

12 the legislation that was reported or in13 troduced in the House in receipt of 

14 the legislation of the other House; and 

15 (II) the legislation of the other 

16 House shall immediately be considered 

17 by the receiving House under the 

18 same procedures applicable to legisla19 tion reported by or discharged from a 

20 committee or introduced under sub21 paragraph (A). 

22 Upon disposition of legislation that is re23 ceived by one House from the other House, 

24 it shall no longer be in order to consider 


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1 the legislation that was reported or intro2 duced in the receiving House. 

3 (iii) SENATE LIMITS ON DEBATE.—In 

4 the Senate, consideration of the legislation 

5 and on all debatable motions and appeals 

6 in connection therewith shall not exceed a 

7 total of 30 hours, which shall be divided 

8 equally between those favoring and those 

9 opposing the legislation. A motion further 

10 to limit debate on the legislation is in 

11 order and is not debatable. Any debatable 

12 motion or appeal is debatable for not to ex13 ceed 1 hour, to be divided equally between 

14 those favoring and those opposing the mo15 tion or appeal. All time used for consider16 ation of the legislation, including time used 

17 for quorum calls and voting, shall be 

18 counted against the total 30 hours of con19 sideration. 

20 (iv) CONSIDERATION IN CON21 FERENCE.—Immediately upon a final pas22 sage of the legislation that results in a dis23 agreement between the two Houses of Con24 gress with respect to the legislation, con25 ferees shall be appointed and a conference 


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1 convened. Not later than 15 days after the 

2 date on which conferees are appointed (ex3 cluding periods in which one or both 

4 Houses are in recess), the conferees shall 

5 file a report with the Senate and the 

6 House of Representatives resolving the dif7 ferences between the Houses on the legisla8 tion. Notwithstanding any other rule of the 

9 Senate or the House of Representatives, it 

10 shall be in order to immediately consider a 

11 report of a committee of conference on the 

12 legislation filed in accordance with this 

13 subsection. Debate in the Senate and the 

14 House of Representatives on the con15 ference report shall be limited to 10 hours, 

16 equally divided and controlled by the ma17 jority and minority leaders of the Senate 

18 or their designees and the Speaker of the 

19 House of Representatives and the minority 

20 leader of the House of Representatives or 

21 their designees. A vote on final passage of 

22 the conference report shall occur imme23 diately at the conclusion or yielding back 

24 of all time for debate on the conference re25 port. 


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1 (C) RULES OF THE SENATE AND HOUSE

2 OF REPRESENTATIVES.—This paragraph is en3 acted by Congress— 

4 (i) as an exercise of the rulemaking 

5 power of the Senate and House of Rep6 resentatives, respectively, and is deemed to 

7 be part of the rules of each House, respec8 tively, but applicable only with respect to 

9 the procedure to be followed in that House 

10 in the case of legislation under this section, 

11 and it supersedes other rules only to the 

12 extent that it is inconsistent with such 

13 rules; and 

14 (ii) with full recognition of the con15 stitutional right of either House to change 

16 the rules (so far as they relate to the pro17 cedure of that House) at any time, in the 

18 same manner, and to the same extent as in 

19 the case of any other rule of that House. 

20 (3) APPROPRIATE COMMITTEES OF CON21 GRESS.—In this subsection, the term ‘‘appropriate 

22 committees of Congress’’ means the Committee on 

23 Ways and Means, the Committee on Education and 

24 Labor, and the Committee on Energy and Com25 merce of the House of Representatives and the ComVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00215 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 mittee on Finance and the Committee on Health, 

2 Education, Labor and Pensions of the Senate. 

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

4 this section shall apply to taxable years ending after De5 cember 31, 2012. 

6 SEC. 1302. REPORTING OF HEALTH INSURANCE COVERAGE. 

7 (a) IN GENERAL.—Part III of subchapter A of chap8 ter 61 of the Internal Revenue Code of 1986 is amended 

9 by inserting after subpart C the following new subpart: 

10 ‘‘Subpart D—Information Regarding Health 

11 Insurance Coverage 

‘‘Sec. 6055. Reporting of health insurance coverage. 

12 ‘‘SEC. 6055. REPORTING OF HEALTH INSURANCE COV13 ERAGE. 

14 ‘‘(a) IN GENERAL.—Every person who provides es15 sential health benefits coverage to an individual during a 

16 calendar year shall, at such time as the Secretary may 

17 prescribe, make a return described in subsection (b). 

18 ‘‘(b) FORM AND MANNER OF RETURN.— 

19 ‘‘(1) IN GENERAL.—A return is described in 

20 this subsection if such return— 

21 ‘‘(A) is in such form as the Secretary may 

22 prescribe, and 

23 ‘‘(B) contains— 


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1 ‘‘(i) the name, address and TIN of 

2 the primary insured and the name of each 

3 other individual obtaining coverage under 

4 the policy, 

5 ‘‘(ii) the dates during which such indi6 vidual was covered under essential health 

7 benefits coverage during the calendar year, 

8 ‘‘(iii) the amount (if any) of any ad9 vance payment under section 2248 of the 

10 Social Security Act of any cost-sharing 

11 subsidy under section 2247 of such Act or 

12 of any premium credit under section 36B 

13 with respect to such coverage, and 

14 ‘‘(iv) such other information as the 

15 Secretary may require. 

16 ‘‘(2) INFORMATION RELATING TO EMPLOYER17 PROVIDED COVERAGE.—If essential health benefits 

18 coverage provided to an individual under subsection 

19 (a) consists of health insurance coverage of a health 

20 insurance issuer provided through a group health 

21 plan of an employer, a return described in this sub22 section shall include— 

23 ‘‘(A) the name, address, and employer 

24 identification number of the employer maintain25 ing the plan, 


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1 ‘‘(B) the portion of the premium (if any) 

2 required to be paid by the employer, and 

3 ‘‘(C) if the health insurance coverage is a 

4 qualified health benefits plan in the small group 

5 market offered through an exchange, such other 

6 information as the Secretary may require for 

7 administration of the credit under section 45R 

8 (relating to credit for employee health insurance 

9 expenses of small employers). 

10 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID11 UALS WITH RESPECT TO WHOM INFORMATION IS RE12 PORTED.— 

13 ‘‘(1) IN GENERAL.—Every person required to 

14 make a return under subsection (a) shall furnish to 

15 each individual whose name is required to be set 

16 forth in such return a written statement showing— 

17 ‘‘(A) the name and address of the person 

18 required to make such return and the phone 

19 number of the information contact for such per20 son, and 

21 ‘‘(B) the information required to be shown 

22 on the return with respect to such individual. 

23 ‘‘(2) TIME FOR FURNISHING STATEMENTS.— 

24 The written statement required under paragraph (1) 

25 shall be furnished on or before January 31 of the 


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1 year following the calendar year for which the return 

2 under subsection (a) was required to be made. 

3 ‘‘(d) COVERAGE PROVIDED BY GOVERNMENTAL

4 UNITS.—In the case of coverage provided by any govern5 mental unit or any agency or instrumentality thereof, the 

6 officer or employee who enters into the agreement to pro7 vide such coverage (or the person appropriately designated 

8 for purposes of this section) shall make the returns and 

9 statements required by this section. 

10 ‘‘(e) ESSENTIAL HEALTH BENEFITS COVERAGE.— 

11 For purposes of this section, the term ‘essential health 

12 benefits coverage’ has the meaning given such term by sec13 tion 5000A(f).’’. 

14 (b) ASSESSABLE PENALTIES.— 

15 (1) Subparagraph (B) of section 6724(d)(1) of 

16 the Internal Revenue Code of 1986 (relating to defi17 nitions) is amended by striking ‘‘or’’ at the end of 

18 clause (xxii), by striking ‘‘and’’ at the end of clause 

19 (xxiii) and inserting ‘‘or’’, and by inserting after 

20 clause (xxiii) the following new clause: 

21 ‘‘(xxiv) section 6055 (relating to re22 turns relating to information regarding 

23 health insurance coverage), and’’. 

24 (2) Paragraph (2) of section 6724(d) of such 

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1 paragraph (EE), by striking the period at the end 

2 of subparagraph (FF) and inserting ‘‘, or’’ and by 

3 inserting after subparagraph (FF) the following new 

4 subparagraph: 

5 ‘‘(GG) section 6055(c) (relating to state6 ments relating to information regarding health 

7 insurance coverage).’’. 

8 (c) CONFORMING AMENDMENT.—The table of sub9 parts for part III of subchapter A of chapter 61 of such 

10 Code is amended by inserting after the item relating to 

11 subpart C the following new item: 

‘‘SUBPART D—INFORMATION REGARDING HEALTH INSURANCE COVERAGE’’. 

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

13 this section shall apply to calendar years beginning after 

14 2012. 

15 PART II—EMPLOYER RESPONSIBILITY 

16 SEC. 1306. EMPLOYER SHARED RESPONSIBILITY REQUIRE17 MENT. 

18 (a) IN GENERAL.—Chapter 43 of the Internal Rev19 enue Code of 1986 is amended by adding at the end the 

20 following: 

21 ‘‘SEC. 4980H. EMPLOYER RESPONSIBILITY TO PROVIDE 

22 HEALTH COVERAGE. 

23 ‘‘(a) IMPOSITION OF EXCISE TAX.—If— 

24 ‘‘(1) an applicable large employer fails to meet 

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1 section (c) with respect to its full-time employees, 

2 and 

3 ‘‘(2) any such full-time employee of the em4 ployer is enrolled for any month during the period 

5 of such failure in a qualified health benefits plan 

6 with respect to which an applicable premium credit 

7 or cost-sharing subsidy is allowed or paid with re8 spect to the employee, 

9 there is hereby imposed on such failure with respect to 

10 each such employee for each such month a tax in the 

11 amount determined under subsection (b). 

12 ‘‘(b) AMOUNT OF TAX.— 

13 ‘‘(1) IN GENERAL.—The tax determined under 

14 this subsection with respect to a failure involving an 

15 employee for any month described in subsection 

(a)(2) shall be equal to 1 16 ⁄12 of the dollar amount 

17 which the Secretary of Health and Human Services 

18 determines (on the basis of the most recent data 

19 available) is equal to the sum of the average annual 

20 credit allowed under section 36B and the average 

21 annual cost-sharing subsidy under section 2247 of 

22 the Social Security Act for taxable years beginning 

23 in the calendar year preceding the calendar year in 

24 which such month occurs. In the case of a month oc25 curring during 2013, the Secretary shall determine 


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1 the average annual credit and subsidy on the basis 

2 of the aggregate amount of credits and subsidies 

3 (expressed as an annual amount) for which appli4 cants were determined eligible during the initial 

5 open enrollment period under section 2237(d)(2)(A) 

6 of the Social Security Act. 

7 ‘‘(2) OVERALL LIMITATION.— 

8 ‘‘(A) IN GENERAL.—The aggregate 

9 amount of tax determined under paragraph (1) 

10 with respect to all employees of an applicable 

11 large employer for any month shall not exceed 

1 12 ⁄12 of the product of— 

13 ‘‘(i) $400, and 

14 ‘‘(ii) the average number of full-time 

15 employees of the employer on business 

16 days during the calendar year preceding 

17 the calendar year in which such month oc18 curs (determined in the same manner as 

19 under subsection (d)(1)). 

20 ‘‘(B) INDEXING.—In the case of any cal21 endar year after 2013, the $400 amount under 

22 subparagraph (A)(i) shall be increased by an 

23 amount equal to the product of— 

24 ‘‘(i) $400, and 


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1 ‘‘(ii) the premium adjustment percent2 age (as defined in section 2242(c)(7) of 

3 the Social Security Act) for the calendar 

4 year. 

5 If the amount of any increase under this sub6 paragraph is not a multiple of $10, such in7 crease shall be rounded to the next lowest mul8 tiple of $10. 

9 ‘‘(c) HEALTH INSURANCE COVERAGE REQUIRE10 MENTS.—For purposes of this section— 

11 ‘‘(1) IN GENERAL.—An applicable large em12 ployer meets the health insurance coverage require13 ments of this subsection if the employer— 

14 ‘‘(A) in the case of an employer in the 

15 small group market in a State, offers to its full16 time employees (and their dependents) the op17 portunity to enroll in a qualified health benefits 

18 plan or a grandfathered health benefits plan, 

19 and 

20 ‘‘(B) in the case of an employer in the 

21 large group market in a State, offers to its full22 time employees (and their dependents) the op23 portunity to enroll in a group health plan meet24 ing the requirements of section 2244 of the SoVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00223 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 cial Security Act or a grandfathered health ben2 efits plan. 

3 ‘‘(2) EXCEPTION WHERE COVERAGE IS

4 UNAFFORDABLE OR FAILS TO PROVIDE MINIMUM

5 VALUE.—An employer shall not be treated as meet6 ing the requirements of this subsection with respect 

7 to any employee if— 

8 ‘‘(A) the employee is eligible for the credit 

9 allowable under section 36B because the em10 ployee’s required contribution under the plan 

11 described in paragraph (1) is determined to be 

12 unaffordable under section 36B(c)(2)(C), or 

13 ‘‘(B) in the case of a plan (other than a 

14 qualified health benefits plan) offered under 

15 paragraph (1), the plan’s share of the total al16 lowed costs of benefits provided under the plan 

17 is less than 65 percent of such costs. 

18 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur19 poses of this section— 

20 ‘‘(1) APPLICABLE LARGE EMPLOYER.— 

21 ‘‘(A) IN GENERAL.—The term ‘applicable 

22 large employer’ means, with respect to a cal23 endar year, an employer who employed an aver24 age of at least 50 employees on business days 

25 during the preceding calendar year. 


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1 ‘‘(B) RULES FOR DETERMINING EM2 PLOYER SIZE.—For purposes of this para3 graph— 

4 ‘‘(i) APPLICATION OF AGGREGATION

5 RULE FOR EMPLOYERS.—All persons treat6 ed as a single employer under subsection 

7 (b), (c), (m), or (o) of section 414 of the 

8 Internal Revenue Code of 1986 shall be 

9 treated as 1 employer. 

10 ‘‘(ii) EMPLOYERS NOT IN EXISTENCE

11 IN PRECEDING YEAR.—In the case of an 

12 employer which was not in existence 

13 throughout the preceding calendar year, 

14 the determination of whether such em15 ployer is an applicable large employer shall 

16 be based on the average number of employ17 ees that it is reasonably expected such em18 ployer will employ on business days in the 

19 current calendar year. 

20 ‘‘(iii) PREDECESSORS.—Any reference 

21 in this subsection to an employer shall in22 clude a reference to any predecessor of 

23 such employer. 


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1 ‘‘(2) APPLICABLE PREMIUM CREDIT AND COST2 SHARING SUBSIDY.—The term ‘applicable premium 

3 credit and cost-sharing subsidy’ means— 

4 ‘‘(A) any premium credit allowed under 

5 section 36B (and any advance payment of the 

6 credit under section 2248 of the Social Security 

7 Act), and 

8 ‘‘(B) any cost-sharing subsidy payment 

9 under section 2247 of such Act. 

10 ‘‘(3) FULL-TIME EMPLOYEE.— 

11 ‘‘(A) IN GENERAL.—The term ‘full-time 

12 employee’ means an employee who is employed 

13 on average at least 30 hours per week. 

14 ‘‘(B) SPECIAL RULES.—The Secretary 

15 shall prescribe such regulations, rules, and 

16 guidance as may be necessary to apply this 

17 paragraph to employees who are not com18 pensated on an hourly basis. 

19 ‘‘(4) OTHER DEFINITIONS.—Any term used in 

20 this section which is also used in title XXII of the 

21 Social Security Act shall have the same meaning as 

22 when used in such title. 

23 ‘‘(5) TAX NONDEDUCTIBLE.—For denial of de24 duction for the tax imposed by this section, see sec25 tion 275(a)(6). 


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1 ‘‘(e) TIME FOR PAYMENT OF TAX.—The Secretary 

2 may provide for the payment of the tax imposed by this 

3 section on an annual, monthly, or other periodic basis as 

4 the Secretary may prescribe.’’. 

5 (b) CLERICAL AMENDMENT.—The table of sections 

6 for chapter 43 of such Code is amended by adding at the 

7 end the following new item: 

‘‘Sec. 4980H. Employer responsibility to provide health coverage.’’. 

8 (c) STUDY AND REPORT OF EFFECT OF TAX ON

9 WORKERS’ WAGES.— 

10 (1) IN GENERAL.—The Secretary of Labor shall 

11 conduct a study to determine whether employees’ 

12 wages are reduced by reason of the application of 

13 the tax imposed under section 4980H of the Internal 

14 Revenue Code of 1986 (as added by the amendments 

15 made by this section). The Secretary shall make 

16 such determination on the basis of the National 

17 Compensation Survey published by the Bureau of 

18 Labor Statistics. 

19 (2) REPORT.—The Secretary shall report the 

20 results of the study under paragraph (1) to the 

21 Committee on Ways and Means of the House of 

22 Representatives and to the Committee on Finance of 

23 the Senate. 


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

2 this section shall apply to periods beginning after June 

3 30, 2013. 

4 SEC. 1307. REPORTING OF EMPLOYER HEALTH INSURANCE 

5 COVERAGE. 

6 (a) IN GENERAL.—Subpart D of part III of sub7 chapter A of chapter 61 of the Internal Revenue Code of 

8 1986, as added by section 1302, is amended by inserting 

9 after section 6055 the following new section: 

10 ‘‘SEC. 6056. LARGE EMPLOYERS REQUIRED TO REPORT ON 

11 HEALTH INSURANCE COVERAGE. 

12 ‘‘(a) IN GENERAL.—Every applicable large employer 

13 required to meet the requirements of section 4980H(c) 

14 with respect to its full-time employees during a calendar 

15 year shall, at such time as the Secretary may prescribe, 

16 make a return described in subsection (b). 

17 ‘‘(b) FORM AND MANNER OF RETURN.—A return is 

18 described in this subsection if such return— 

19 ‘‘(1) is in such form as the Secretary may pre20 scribe, and 

21 ‘‘(2) contains— 

22 ‘‘(A) the name, date, and employer identi23 fication number of the employer, 

24 ‘‘(B) a certification as to whether the em25 ployer offers to its full-time employees (and 


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1 their dependents) the opportunity to enroll in a 

2 health benefits plan or a grandfathered health 

3 benefits plan described in section 4980H(c) and 

4 applicable to the employer, 

5 ‘‘(C) if the employer certifies that the em6 ployer did offer to its full-time employees (and 

7 their dependents) the opportunity to so enroll— 

8 ‘‘(i) the months during the calendar 

9 year for which coverage was available, and 

10 ‘‘(ii) the monthly premium for the 

11 lowest cost option in each of the enroll12 ment categories under each health benefits 

13 plan offered to employees, 

14 ‘‘(D) the name, address, and TIN of each 

15 full-time employee during the calendar year and 

16 the months (if any) during which such employee 

17 (and any dependents) were covered under any 

18 such health benefits plans and, 

19 ‘‘(E) such other information as the Sec20 retary may require. 

21 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID22 UALS WITH RESPECT TO WHOM INFORMATION IS RE23 PORTED.— 

24 ‘‘(1) IN GENERAL.—Every person required to 

25 make a return under subsection (a) shall furnish to 


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1 each full-time employee whose name is required to 

2 be set forth in such return under subsection 

3 (b)(2)(D) a written statement showing— 

4 ‘‘(A) the name and address of the person 

5 required to make such return and the phone 

6 number of the information contact for such per7 son, and 

8 ‘‘(B) the information required to be shown 

9 on the return with respect to such individual. 

10 ‘‘(2) TIME FOR FURNISHING STATEMENTS.— 

11 The written statement required under paragraph (1) 

12 shall be furnished on or before January 31 of the 

13 year following the calendar year for which the return 

14 under subsection (a) was required to be made. 

15 ‘‘(d) COORDINATION WITH OTHER REQUIRE16 MENTS.—To the maximum extent feasible, the Secretary 

17 may provide that— 

18 ‘‘(1) any return or statement required to be 

19 provided under this section may be provided as part 

20 of any return or statement required under section 

21 6051 or 6055, and 

22 ‘‘(2) in the case of an applicable large employer 

23 offering a health benefits plan of a health insurance 

24 issuer, the employer may enter into an agreement 

25 with the issuer to include information required 


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1 under this section with the return and statement re2 quired to be provided by the issuer under section 

3 6055. 

4 ‘‘(e) COVERAGE PROVIDED BY GOVERNMENTAL

5 UNITS.—In the case of any applicable large employer 

6 which is a governmental unit or any agency or instrumen7 tality thereof, the person appropriately designated for pur8 poses of this section shall make the returns and state9 ments required by this section. 

10 ‘‘(f) DEFINITIONS.—For purposes of this section, any 

11 term used in this section which is also used in section 

12 4980H shall have the meaning given such term by section 

13 4980H.’’. 

14 (b) ASSESSABLE PENALTIES.— 

15 (1) Subparagraph (B) of section 6724(d)(1) of 

16 the Internal Revenue Code of 1986 (relating to defi17 nitions), as amended by section 1302, is amended by 

18 striking ‘‘or’’ at the end of clause (xxiii), by striking 

19 ‘‘and’’ at the end of clause (xxiv) and inserting ‘‘or’’, 

20 and by inserting after clause (xxiv) the following 

21 new clause: 

22 ‘‘(xxv) section 6056 (relating to re23 turns relating to large employers required 

24 to report on health insurance coverage), 

25 and’’. 


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1 (2) Paragraph (2) of section 6724(d) of such 

2 Code, as so amended, is amended by striking ‘‘or’’ 

3 at the end of subparagraph (FF), by striking the pe4 riod at the end of subparagraph (GG) and inserting 

5 ‘‘, or’’ and by inserting after subparagraph (GG) the 

6 following new subparagraph: 

7 ‘‘(HH) section 6056(c) (relating to state8 ments relating to large employers required to 

9 report on health insurance coverage).’’. 

10 (c) CONFORMING AMENDMENT.—The table of sec11 tions for subpart D of part III of subchapter A of chapter 

12 61 of such Code, as added by section 1302, is amended 

13 by adding at the end the following new item: 

‘‘Sec. 6056. Large employers required to report on health insurance coverage.’’. 

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

15 this section shall apply to periods beginning after June 

16 30, 2013. 

17 Subtitle E—Federal Program for 

18 Health Care Cooperatives 

19 SEC. 1401. ESTABLISHMENT OF FEDERAL PROGRAM FOR 

20 HEALTH CARE COOPERATIVES. 

21 (a) IN GENERAL.—Title XXII of the Social Security 

22 Act (as added by section 1001 and amended by sections 

23 1101 and 1201) is amended by adding at the end the fol24 lowing: 


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1 ‘‘PART D—FEDERAL PROGRAM FOR HEALTH 

2 CARE COOPERATIVES 

3 ‘‘SEC. 2251. FEDERAL PROGRAM TO ASSIST ESTABLISH4 MENT AND OPERATION OF NONPROFIT, MEM5 BER-RUN HEALTH INSURANCE ISSUERS. 

6 ‘‘(a) ESTABLISHMENT OF PROGRAM.— 

7 ‘‘(1) IN GENERAL.—The Secretary shall estab8 lish a program to carry out the purposes of this sec9 tion to be known as the Consumer Operated and 

10 Oriented Plan (CO-OP) program. 

11 ‘‘(2) PURPOSE.—It is the purpose of the CO12 OP program to foster the creation of qualified non13 profit health insurance issuers to offer qualified 

14 health benefits plans in the individual and small 

15 group markets in the States in which the issuers are 

16 licensed to offer such plans. 

17 ‘‘(b) LOANS AND GRANTS UNDER THE CO-OP PRO18 GRAM.— 

19 ‘‘(1) IN GENERAL.—The Secretary shall provide 

20 through the CO-OP program for the awarding to 

21 persons applying to become qualified nonprofit 

22 health insurance issuers of— 

23 ‘‘(A) loans to provide assistance to such 

24 person in meeting its start-up costs; and 

25 ‘‘(B) grants to provide assistance to such 

26 person in meeting any solvency requirements of 


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1 States in which the person seeks to be licensed 

2 to issue qualified health benefits plans. 

3 ‘‘(2) REQUIREMENTS FOR AWARDING LOANS

4 AND GRANTS.— 

5 ‘‘(A) IN GENERAL.—In awarding loans and 

6 grants under the CO-OP program, the Sec7 retary shall— 

8 ‘‘(i) take into account the rec9 ommendations of the advisory board estab10 lished under paragraph (3); 

11 ‘‘(ii) give priority to applicants that 

12 will offer qualified health benefits plans on 

13 a Statewide basis, will utilize integrated 

14 care models, and have significant private 

15 support; and 

16 ‘‘(iii) ensure that there is sufficient 

17 funding to establish at least 1 qualified 

18 nonprofit health insurance issuer in each 

19 State, except that nothing in this clause 

20 shall prohibit the Secretary from funding 

21 the establishment of multiple qualified 

22 nonprofit health insurance issuers in any 

23 State if the funding is sufficient to do so. 

24 ‘‘(B) STATES WITHOUT ISSUERS IN PRO25 GRAM.—If no health insurance issuer applies to 


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1 be a qualified nonprofit health insurance issuer 

2 within a State, the Secretary may use amounts 

3 appropriated under this section for the award4 ing of grants to encourage the establishment of 

5 a qualified nonprofit health insurance issuer 

6 within the State or the expansion of a qualified 

7 nonprofit health insurance issuer from another 

8 State to the State. 

9 ‘‘(C) AGREEMENT.— 

10 ‘‘(i) IN GENERAL.—The Secretary 

11 shall require any person receiving a loan or 

12 grant under the CO-OP program to enter 

13 into an agreement with the Secretary 

14 which requires such person to meet (and to 

15 continue to meet)— 

16 ‘‘(I) any requirement under this 

17 section for such person to be treated 

18 as a qualified nonprofit health insur19 ance issuer; and 

20 ‘‘(II) any requirements contained 

21 in the agreement for such person to 

22 receive such loan or grant. 

23 ‘‘(ii) RESTRICTIONS ON USE OF FED24 ERAL FUNDS.—The agreement shall in25 clude a requirement that no portion of the 


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1 funds made available by any loan or grant 

2 under this section may be used— 

3 ‘‘(I) for carrying on propaganda, 

4 or otherwise attempting, to influence 

5 legislation; or 

6 ‘‘(II) for marketing. 

7 Nothing in this clause shall be construed 

8 to allow a person to take any action pro9 hibited by section 501(c)(29) of the Inter10 nal Revenue Code of 1986. 

11 ‘‘(iii) FAILURE TO MEET REQUIRE12 MENTS.—If the Secretary determines that 

13 a person has failed to meet any require14 ment described in clause (i) or (ii) and has 

15 failed to correct such failure within a rea16 sonable period of time of when the person 

17 first knows (or reasonably should have 

18 known) of such failure, such person shall 

19 repay to the Secretary an amount equal to 

20 the sum of— 

21 ‘‘(I) 110 percent of the aggregate 

22 amount of loans and grants received 

23 under this section; plus 

24 ‘‘(II) interest on the aggregate 

25 amount of loans and grants received 


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1 under this section for the period the 

2 loans or grants were outstanding. 

3 The Secretary shall notify the Secretary of 

4 the Treasury of any determination under 

5 this section of a failure that results in the 

6 termination of an issuer’s tax-exempt sta7 tus under section 501(c)(29) of such Code. 

8 ‘‘(D) TIME FOR AWARDING LOANS AND

9 GRANTS.—The Secretary shall not later than 

10 January 1, 2012, award the loans and grants 

11 under the CO-OP program and begin the dis12 tribution of amounts awarded under such loans 

13 and grants. 

14 ‘‘(3) ADVISORY BOARD.— 

15 ‘‘(A) IN GENERAL.—The advisory board 

16 under this paragraph shall consist of 15 mem17 bers appointed by the Comptroller General of 

18 the United States from among individuals with 

19 qualifications described in section 1805(c)(2). 

20 ‘‘(B) RULES RELATING TO APPOINT21 MENTS.— 

22 ‘‘(i) STANDARDS.—Any individual ap23 pointed under subparagraph (A) shall meet 

24 ethics and conflict of interest standards 


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1 protecting against insurance industry in2 volvement and interference. 

3 ‘‘(ii) ORIGINAL APPOINTMENTS.—The 

4 original appointment of board members 

5 under subparagraph (A)(ii) shall be made 

6 no later than 3 months after the date of 

7 enactment of this title. 

8 ‘‘(C) VACANCY.—Any vacancy on the advi9 sory board shall be filled in the same manner 

10 as the original appointment. 

11 ‘‘(D) PAY AND REIMBURSEMENT.— 

12 ‘‘(i) NO COMPENSATION FOR MEM13 BERS OF ADVISORY BOARD.—Except as 

14 provided in clause (ii), a member of the ad15 visory board may not receive pay, allow16 ances, or benefits by reason of their service 

17 on the board. 

18 ‘‘(ii) TRAVEL EXPENSES.—Each 

19 member shall receive travel expenses, in20 cluding per diem in lieu of subsistence 

21 under subchapter I of chapter 57 of title 5, 

22 United States Code. 

23 ‘‘(E) APPLICATION OF FACA.—The Federal 

24 Advisory Committee Act (5 U.S.C. App.) shall 


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1 apply to the advisory board, except that section 

2 14 of such Act shall not apply. 

3 ‘‘(F) TERMINATION.—The advisory board 

4 shall terminate on the earlier of the date that 

5 it completes its duties under this section or De6 cember 31, 2015. 

7 ‘‘(c) QUALIFIED NONPROFIT HEALTH INSURANCE

8 ISSUER.—For purposes of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘qualified non10 profit health insurance issuer’ means a health insur11 ance issuer that is an organization— 

12 ‘‘(A) that is organized under State law as 

13 a nonprofit, member corporation; 

14 ‘‘(B) substantially all of the activities of 

15 which consist of the issuance of qualified health 

16 benefits plans in the individual and small group 

17 markets in each State in which it is licensed to 

18 issue such plans; and 

19 ‘‘(C) that meets the other requirements of 

20 this subsection. 

21 ‘‘(2) CERTAIN ORGANIZATIONS PROHIBITED.— 

22 An organization shall not be treated as a qualified 

23 nonprofit health insurance issuer if— 


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1 ‘‘(A) the organization or a related entity 

2 (or any predecessor of either) was a health in3 surance issuer on July 16, 2009; or 

4 ‘‘(B) the organization is sponsored by a 

5 State or local government, any political subdivi6 sion thereof, or any instrumentality of such 

7 government or political subdivision. 

8 ‘‘(3) GOVERNANCE REQUIREMENTS.—An orga9 nization shall not be treated as a qualified nonprofit 

10 health insurance issuer unless— 

11 ‘‘(A) the governance of the organization is 

12 subject to a majority vote of its members; 

13 ‘‘(B) its governing documents incorporate 

14 ethics and conflict of interest standards pro15 tecting against insurance industry involvement 

16 and interference; and 

17 ‘‘(C) as provided in regulations promul18 gated by the Secretary, the organization is re19 quired to operate with a strong consumer focus, 

20 including timeliness, responsiveness, and ac21 countability to members. 

22 ‘‘(4) PROFITS INURE TO BENEFIT OF MEM23 BERS.—An organization shall not be treated as a 

24 qualified nonprofit health insurance issuer unless 

25 any profits made by the organization are required to 


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1 be used to lower premiums, to improve benefits, or 

2 for other programs intended to improve the quality 

3 of health care delivered to its members. 

4 ‘‘(5) COMPLIANCE WITH STATE INSURANCE

5 LAWS.—An organization shall not be treated as a 

6 qualified nonprofit health insurance issuer unless the 

7 organization meets all the requirements that other 

8 offerors of qualified health benefits are required to 

9 meet in any State where the issuer offers a qualified 

10 health benefits plan, including solvency and licensure 

11 requirements, rules on payments to providers, and 

12 compliance with network adequacy rules, rate and 

13 form filing rules, and any applicable State premium 

14 assessments. 

15 ‘‘(6) COORDINATION WITH STATE INSURANCE

16 REFORMS.—An organization shall not be treated as 

17 a qualified nonprofit health insurance issuer unless 

18 the organization does not offer a health benefits plan 

19 in a State until that State has in effect the Model 

20 Regulation, Federal standard, or State law described 

21 in section 2225(a)(2). 

22 ‘‘(d) ESTABLISHMENT OF PRIVATE PURCHASING

23 COUNCIL.— 

24 ‘‘(1) IN GENERAL.—Qualified nonprofit health 

25 insurance issuers participating in the CO-OP proVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00241 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 gram under this section may establish a private pur2 chasing council to enter into collective purchasing 

3 arrangements for items and services that increase 

4 administrative and other cost efficiencies, including 

5 claims administration, administrative services, health 

6 information technology, and actuarial services. 

7 ‘‘(2) COUNCIL MAY NOT SET PAYMENT

8 RATES.—The private purchasing council established 

9 under paragraph (1) shall not set payment rates for 

10 health care facilities or providers participating in 

11 health insurance coverage provided by qualified non12 profit health insurance issuers. 

13 ‘‘(3) CONTINUED APPLICATION OF ANTITRUST

14 LAWS.— 

15 ‘‘(A) IN GENERAL.—Nothing in this sec16 tion shall be construed to limit the application 

17 of the antitrust laws to any private purchasing 

18 council (whether or not established under this 

19 subsection) or to any qualified nonprofit health 

20 insurance issuer participating in such a council. 

21 ‘‘(B) ANTITRUST LAWS.—For purposes of 

22 this subparagraph, the term ‘antitrust laws’ has 

23 the meaning given the term in subsection (a) of 

24 the first section of the Clayton Act (15 U.S.C. 

25 12(a)). Such term also includes section 5 of the 


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1 Federal Trade Commission Act (15 U.S.C. 45) 

2 to the extent that such section 5 applies to un3 fair methods of competition. 

4 ‘‘(e) LIMITATION ON PARTICIPATION.—No represent5 ative of any Federal, State, or local government (or of any 

6 political subdivision or instrumentality thereof), and no 

7 representative of a person described in subsection 

8 (c)(2)(A), may serve on the board of directors of a quali9 fied nonprofit health insurance issuer or with a private 

10 purchasing council established under subsection (d). 

11 ‘‘(f) LIMITATIONS ON SECRETARY.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall not— 

13 ‘‘(A) participate in any negotiations be14 tween 1 or more qualified nonprofit health in15 surance issuers (or a private purchasing council 

16 established under subsection (d)) and any 

17 health care facilities or providers, including any 

18 drug manufacturer, pharmacy, or hospital; and 

19 ‘‘(B) establish or maintain a price struc20 ture for reimbursement of any health benefits 

21 covered by such issuers. 

22 ‘‘(2) COMPETITION.—Nothing in this section 

23 shall be construed as authorizing the Secretary to 

24 interfere with the competitive nature of providing 


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1 health benefits through qualified nonprofit health in2 surance issuers. 

3 ‘‘(g) STATE.—For purposes of this section, the term 

4 ‘State’ means each of the 50 States and the District of 

5 Columbia. 

6 ‘‘(h) APPROPRIATIONS.—There are hereby appro7 priated, out of any funds in the Treasury not otherwise 

8 appropriated, $6,000,000,000 to carry out this section.’’. 

9 (b) TAX EXEMPTION FOR QUALIFIED NONPROFIT

10 HEALTH INSURANCE ISSUER.— 

11 (1) IN GENERAL.—Section 501(c) of the Inter12 nal Revenue Code of 1986 (relating to list of exempt 

13 organizations) is amended by adding at the end the 

14 following: 

15 ‘‘(29) CO-OP HEALTH INSURANCE ISSUERS.— 

16 ‘‘(A) IN GENERAL.—A qualified nonprofit 

17 health insurance issuer (within the meaning of 

18 section 2251 of the Social Security Act) which 

19 has received a loan or grant under the CO-OP 

20 program under such section, but only with re21 spect to periods for which the issuer is in com22 pliance with the requirements of such section 

23 and any agreement with respect to the loan or 

24 grant. 


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1 ‘‘(B) CONDITIONS FOR EXEMPTION.—Sub2 paragraph (A) shall apply to an organization 

3 only if— 

4 ‘‘(i) the organization has given notice 

5 to the Secretary, in such manner as the 

6 Secretary may by regulations prescribe, 

7 that it is applying for recognition of its 

8 status under this paragraph, 

9 ‘‘(ii) except as provided in section 

10 2251(c)(4) of the Social Security Act, no 

11 part of the net earnings of which inures to 

12 the benefit of any private shareholder or 

13 individual, 

14 ‘‘(iii) no substantial part of the activi15 ties of which is carrying on propaganda, or 

16 otherwise attempting, to influence legisla17 tion, and 

18 ‘‘(iv) the organization does not par19 ticipate in, or intervene in (including the 

20 publishing or distributing of statements), 

21 any political campaign on behalf of (or in 

22 opposition to) any candidate for public of23 fice.’’. 

24 (2) ADDITIONAL REPORTING REQUIREMENT.— 

25 Section 6033 of such Code (relating to returns by 


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1 exempt organizations) is amended by redesignating 

2 subsection (m) as subsection (n) and by inserting 

3 after subsection (l) the following: 

4 ‘‘(m) ADDITIONAL INFORMATION REQUIRED FROM

5 CO-OP INSURERS.—An organization described in section 

6 501(c)(29) shall include on the return required under sub7 section (a) the following information: 

8 ‘‘(1) The amount of the reserves required by 

9 each State in which the organization is licensed to 

10 issue qualified health benefits plans. 

11 ‘‘(2) The amount of reserves on hand.’’. 

12 (3) APPLICATION OF TAX ON EXCESS BENEFIT

13 TRANSACTIONS.—Section 4958(e)(1) of such Code 

14 (defining applicable tax-exempt organization) is 

15 amended by striking ‘‘paragraph (3) or (4)’’ and in16 serting ‘‘paragraph (3), (4), or (29)’’. 

17 (c) GAO STUDY AND REPORT.— 

18 (1) STUDY.—The Comptroller General of the 

19 General Accountability Office shall conduct an ongo20 ing study on competition and market concentration 

21 in the health insurance market in the United States 

22 after the implementation of the reforms in such 

23 market under the provisions of, and the amendments 

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1 ysis of new offerors of health insurance in such mar2 ket. 

3 (2) REPORT.—The Comptroller General shall, 

4 not later than December 31 of each even-numbered 

5 year (beginning with 2014), report to the appro6 priate committees of the Congress the results of the 

7 study conducted under paragraph (1), including any 

8 recommendations for administrative or legislative 

9 changes the Comptroller General determines nec10 essary or appropriate to increase competition in the 

11 health insurance market. 

12 Subtitle F—Transparency and 

13 Accountability 

14 SEC. 1501. PROVISIONS ENSURING TRANSPARENCY AND 

15 ACCOUNTABILITY. 

16 (a) IN GENERAL.—Title XXII of the Social Security 

17 Act, as added by subtitle A, is amended by adding at the 

18 end of subpart 4 of part A the following new section: 

19 ‘‘SEC. 2229. REQUIREMENTS RELATING TO TRANSPARENCY 

20 AND ACCOUNTABILITY. 

21 ‘‘(a) OMBUDSMEN.—Each State shall establish an 

22 ombudsmen program to address complaints related to 

23 health benefits plans issued within the State. Such pro24 gram shall— 


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1 ‘‘(1) require each offeror of a health benefits 

2 plan within a State to provide an internal claims ap3 peal process meeting the requirements of section 

4 2226(e); and 

5 ‘‘(2) authorize an individual covered by such a 

6 health benefits plan to have access to the services of 

7 an ombudsman— 

8 ‘‘(A) if such an internal appeal lasts more 

9 than 3 months or involves a life threatening 

10 issue; or 

11 ‘‘(B) to resolve problems with obtaining 

12 premium credits under section 36B of the In13 ternal Revenue Code of 1986 or cost-sharing 

14 assistance under section 2247. 

15 ‘‘(b) HEALTH INSURANCE CONSUMER ASSISTANCE

16 GRANTS.— 

17 ‘‘(1) IN GENERAL.—Each State shall establish 

18 a program to provide grants to eligible entities to de19 velop, support, and evaluate consumer assistance 

20 programs related to navigating options for health 

21 benefits plan coverage and selecting the appropriate 

22 health benefits plan coverage. Such program shall 

23 include a fair and open application process and shall 

24 attempt to ensure regional and geographic equity. 


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1 ‘‘(2) DATA COLLECTION.—As a condition of re2 ceiving a grant under paragraph (1), an organization 

3 shall be required to collect and report data to the 

4 Secretary on the types of problems and inquiries en5 countered by consumers served by the consumer as6 sistance programs. 

7 ‘‘(3) FUNDING.— 

8 ‘‘(A) INITIAL FUNDING.—There is hereby 

9 appropriated to the Secretary, out of any funds 

10 in the Treasury not otherwise appropriated, 

11 $30,000,000 for the fiscal year 2014 to carry 

12 out this subsection. Such amount shall remain 

13 available without fiscal year limitation. 

14 ‘‘(B) AUTHORIZATION FOR SUBSEQUENT

15 YEARS.—There are authorized to be appro16 priated to the Secretary for each fiscal year fol17 lowing the fiscal year described in subparagraph 

18 (A) such sums as may be necessary to carry out 

19 this subsection. 

20 ‘‘(4) ELIGIBLE ENTITIES.—In this section, the 

21 term ‘eligible entity’ means any public, private, or 

22 not-for-profit consumer assistance organizations. 

23 Such term includes— 

24 ‘‘(A) any commercial fishing organization, 

25 any ranching or farming organization, or any 


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1 other organization capable of conducting com2 munity-based health care outreach and enroll3 ment assistance for workers who are hard to 

4 reach or employed in rural areas; and 

5 ‘‘(B) any Small Business Development 

6 Center that is capable of assisting small busi7 nesses in getting access to health benefits 

8 plans.’’. 

9 (b) CONFORMING AMENDMENT.—The table of sec10 tions for subpart 4 of part A of title XXII of the Social 

11 Security Act, as added by subtitle A, is amended by adding 

12 at the end the following new item: 

‘‘Sec. 2229. Requirements relating to transparency and accountability.’’. 

13 SEC. 1502. REPORTING ON UTILIZATION OF PREMIUM DOL14 LARS AND STANDARD HOSPITAL CHARGES. 

15 (a) UTILIZATION OF PREMIUM DOLLARS.— 

16 (1) IN GENERAL.—Each offeror of a health 

17 benefits plan offering health insurance coverage 

18 within the United States shall, with respect to each 

19 plan year beginning after December 31, 2009, report 

20 to the Secretary of Health and Human Services the 

21 percentage of the premiums collected for such cov22 erage that are used to pay for items other than med23 ical care. 

24 (2) SECRETARIAL AUTHORITY.—An offeror 

25 shall make the report under paragraph (1) at such 


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1 time and in such manner as the Secretary of Health 

2 and Human Services may prescribe by regulations. 

3 (b) STANDARD HOSPITAL CHARGES.—Each hospital 

4 operating within the United States shall for each calendar 

5 year after 2009 establish (and update) a list of the hos6 pital’s standard charges for items and services provided 

7 by the hospital, including for each diagnosis-related group 

8 established under section 1886(d)(4) of the Social Secu9 rity Act (42 U.S.C. 1395ww). 

10 SEC. 1503. DEVELOPMENT AND UTILIZATION OF UNIFORM 

11 OUTLINE OF COVERAGE DOCUMENTS. 

12 (a) IN GENERAL.—The Secretary of Health and 

13 Human Services shall request the National Association of 

14 Insurance Commissioners (referred to, in this section as 

15 the ‘‘NAIC’’) to develop, and submit to the Secretary not 

16 later than 12 months after the date of enactment of this 

17 Act, standards for use by health insurance issuers in com18 piling and providing to enrollees an outline of coverage 

19 that accurately describes the coverage under the applicable 

20 health insurance plan. In developing such standards, the 

21 NAIC shall consult with a working group composed of rep22 resentatives of consumer advocacy organizations, issuers 

23 of health insurance plans, and other qualified individuals. 


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1 (b) REQUIREMENTS.—The standards for the outline 

2 of coverage developed under subsection (a) shall provide 

3 for the following: 

4 (1) APPEARANCE.—The standards shall ensure 

5 that the outline of coverage is presented in a uni6 form format that does not exceed 4 pages in length 

7 and does not include print smaller than 12-point 

8 font. 

9 (2) LANGUAGE.—The standards shall ensure 

10 that the language used is presented in a manner de11 termined to be understandable by the average health 

12 plan enrollee. 

13 (3) CONTENTS.—The standards shall ensure 

14 that the outline of coverage includes— 

15 (A) the uniform definitions of standard in16 surance terms developed under section 1504; 

17 (B) a description of the coverage, including 

18 dollar amounts for coverage of— 

19 (i) daily hospital room and board; 

20 (ii) miscellaneous hospital services; 

21 (iii) surgical services; 

22 (iv) anesthesia services; 

23 (v) physician services; 

24 (vi) prevention and wellness services; 

25 (vii) prescription drugs; and 


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1 (viii) other benefits, as identified by 

2 the NAIC; 

3 (C) the exceptions, reductions, and limita4 tions on coverage; 

5 (D) the cost-sharing provisions, including 

6 deductible, coinsurance, and co-payment obliga7 tions; 

8 (E) the renewability and continuation of 

9 coverage provisions; 

10 (F) a statement that the outline is a sum11 mary of the policy or certificate and that the 

12 coverage document itself should be consulted to 

13 determine the governing contractual provisions; 

14 and 

15 (G) a contact number for the consumer to 

16 call with additional questions and a web link 

17 where a copy of the actual individual coverage 

18 policy or group certificate of coverage can be re19 viewed and obtained. 

20 For individual policies issued prior to January 1, 

21 2014, the health insurance issuer will be deemed 

22 compliant with the web link requirement if the 

23 issuer makes a copy of the actual policy available 

24 upon request. 

25 (c) REGULATIONS.— 


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1 (1) SUBMISSION.—If, not later than 12 months 

2 after the date of enactment of this Act, the NAIC 

3 submits to the Secretary of Health and Human 

4 Service the standards provided for under subsection 

5 (a), the Secretary shall, not later than 60 days after 

6 the date on which such standards are submitted, 

7 promulgate regulations to apply such standards to 

8 entities described in subsection (d)(3). 

9 (2) FAILURE TO SUBMIT.—If the NAIC fails to 

10 submit to the Secretary the standards under sub11 section (a) within the 12-month period provided for 

12 in paragraph (1), the Secretary shall, not later than 

13 90 days after the expiration of such 12-month pe14 riod, promulgate regulations providing for the appli15 cation of Federal standards for outlines of coverage 

16 to entities described in subsection (d)(3). 

17 (d) REQUIREMENT TO PROVIDE.— 

18 (1) IN GENERAL.—Not later than 24 months 

19 after the date of enactment of this Act, each entity 

20 described in paragraph (3) shall deliver an outline of 

21 coverage pursuant to the standards promulgated 

22 by the Secretary under subsection (c) to— 

23 (A) an applicant at the time of application; 

24 (B) an enrollee at the time of enrollment; 

25 or 


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1 (C) a policyholder or certificate holder at 

2 the time of issuance of the policy or delivery of 

3 the certificate. 

4 (2) COMPLIANCE.—An entity described in para5 graph (3) is deemed in compliance with this section 

6 if the outline of coverage is provided in paper or 

7 electronic form. 

8 (3) ENTITIES IN GENERAL.—An entity de9 scribed in this paragraph is— 

10 (A) a health insurance issuer (including a 

11 group health plan) offering health insurance 

12 coverage within the United States (including 

13 carriers under the Federal Employee Health 

14 Benefits Program under chapter 89 of title 5, 

15 United States Code); and 

16 (B) the Secretary with respect to coverage 

17 under the Medicare, Medicaid, and CHIP pro18 grams under titles XVIII, XIX, and XXI of the 

19 Social Security Act (42 U.S.C. 1395, 1396, 

20 1397aa et seq.). 

21 (e) PREEMPTION.—The standards promulgated 

22 under subsection (c) shall preempt any related State 

23 standards that require an outline of coverage. 

24 (f) FAILURE TO PROVIDE.—An entity described in 

25 subsection (d)(3) that willfully fails to provide the inforVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00255 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 mation required under this section shall be subject to a 

2 fine of not more than $1,000 for each such failure. Such 

3 failure with respect to each enrollee shall constitute a sep4 arate offense for purposes of this subsection. 

5 (g) DEFINITIONS.—For purposes of this section, any 

6 term used in this section that is also used in title XXII 

7 of the Social Security Act shall have the same meaning 

8 as when used in such title. 

9 SEC. 1504. DEVELOPMENT OF STANDARD DEFINITIONS, 

10 PERSONAL SCENARIOS, AND ANNUAL PER11 SONALIZED STATEMENTS. 

12 (a) DEFINING INSURANCE TERMS.— 

13 (1) IN GENERAL.—The Secretary of Health and 

14 Human Services shall, by regulations, provide for 

15 the development of standards for the definitions of 

16 terms used in health insurance coverage, including 

17 insurance-related terms (including the insurance-re18 lated terms described in paragraph (2)) and medical 

19 terms (including the medical terms described in 

20 paragraph (3)). 

21 (2) INSURANCE-RELATED TERMS.—The insur22 ance-related terms described in this paragraph are 

23 premium, deductible, co-insurance, co-payment, out24 of-pocket limit, preferred provider, non-preferred 

25 provider, out-of-network co-payments, UCR (usual, 


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1 customary and reasonable) fees, excluded services, 

2 grievance and appeals, and such other terms as the 

3 Secretary determines are important to define so that 

4 consumers may compare health insurance coverage 

5 and understand the terms of their coverage. 

6 (3) MEDICAL TERMS.—The medical terms de7 scribed in this paragraph are hospitalization, hos8 pital outpatient care, emergency room care, physi9 cian services, prescription drug coverage, durable 

10 medical equipment, home health care, skilled nursing 

11 care, rehabilitation services, hospice services, emer12 gency medical transportation, and such other terms 

13 as the Secretary determines are important to define 

14 so that consumers may compare the medical benefits 

15 offered by insurance health insurance and under16 stand the extent of those medical benefits (or excep17 tions to those benefits). 

18 (b) COVERAGE FACTS LABELS FOR PATIENT CLAIMS

19 SCENARIOS.—The Secretary of Health and Human Serv20 ices shall, by regulations, develop standards for coverage 

21 facts labels based on patient claims scenarios described in 

22 the regulations, which include information on estimated 

23 out-of-pocket cost-sharing and significant exclusions or 

24 benefit limits for such scenarios. 


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1 (c) PERSONALIZED STATEMENT.—The Secretary of 

2 Health and Human Services shall, by regulations, develop 

3 standards for an annual personalized statement that sum4 marizes use of health care services and payment of claims 

5 with respect to an enrollee (and covered dependents) under 

6 health insurance coverage in the preceding year. 

7 Subtitle G—Role of Public 

8 Programs 

9 PART I—MEDICAID COVERAGE FOR THE LOWEST 

10 INCOME POPULATIONS 

11 SEC. 1601. MEDICAID COVERAGE FOR THE LOWEST INCOME 

12 POPULATIONS. 

13 (a) COVERAGE FOR INDIVIDUALS WITH INCOME AT

14 OR BELOW 133 PERCENT OF THE POVERTY LINE.— 

15 (1) BEGINNING 2014.—Section 

16 1902(a)(10)(A)(i) of the Social Security Act (42 

17 U.S.C. 1396a) is amended— 

18 (A) by striking ‘‘or’’ at the end of sub19 clause (VI); 

20 (B) by adding ‘‘or’’ at the end of subclause 

21 (VII); and 

22 (C) by inserting after subclause (VII) the 

23 following: 

24 ‘‘(VIII) beginning January 1, 

25 2014, who are under 65 years of age, 


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1 not pregnant, and are not described in 

2 a previous subclause of this clause, 

3 and whose income (as determined 

4 under subsection (e)(14)) does not ex5 ceed 133 percent of the poverty line 

6 (as defined in section 2110(c)(5)) ap7 plicable to a family of the size in8 volved, subject to subsection (k);’’. 

9 (2) COVERAGE OF, AT A MINIMUM, ESSENTIAL

10 BENEFITS; INDIVIDUALS WITH INCOME EXCEEDING

11 100, BUT LESS THAN 133 PERCENT OF THE POVERTY

12 LINE MAY ELECT SUBSIDIZED EXCHANGE COVERAGE

13 INSTEAD OF MEDICAID.—Section 1902 of such Act 

14 (42 U.S.C. 1396a) is amended by inserting after 

15 subsection (j) the following: 

16 ‘‘(k)(1) The medical assistance provided to an indi17 vidual described in subclause (VIII) of subsection 

18 (a)(10)(A)(i) shall consist of benchmark coverage de19 scribed in section 1937(b)(1) or benchmark equivalent 

20 coverage described in section 1937(b)(2). Such medical as21 sistance shall be provided subject to the requirements of 

22 section 1937, without regard to whether a State otherwise 

23 has elected the option to provide medical assistance 

24 through coverage under that section, unless an individual 

25 described in subclause (VIII) of subsection (a)(10)(A)(i) 


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1 is also an individual for whom, under subparagraph (B) 

2 of section 1937(a)(2), the State may not require enroll3 ment in benchmark coverage described in subsection 

4 (b)(1) of section 1937 or benchmark equivalent coverage 

5 described in subsection (b)(2) of that section, or the indi6 vidual is a non-pregnant, non-elderly adult whose income 

7 exceeds 100, but does not exceed 133 percent of the pov8 erty line (as defined in section 2110(c)(5)) applicable to 

9 a family of the size involved, who has elected under section 

10 1943(c) to enroll in a qualified health benefits plan 

11 through an exchange established by the State under sec12 tion 2235.’’. 

13 (3) FEDERAL FUNDING FOR COST OF COVERING

14 NEWLY ELIGIBLE INDIVIDUALS.—Section 1905 of 

15 the Social Security Act (42 U.S.C. 1396d), is 

16 amended— 

17 (A) in subsection (b), in the first sentence, 

18 by inserting ‘‘subsection (y) and’’ before ‘‘sec19 tion 1933(d)’’; and 

20 (B) by adding at the end the following new 

21 subsection: 

22 ‘‘(y) INCREASED FMAP FOR MEDICAL ASSISTANCE

23 FOR NEWLY ELIGIBLE MANDATORY INDIVIDUALS.— 

24 ‘‘(1) AMOUNT OF INCREASE.— 

25 ‘‘(A) INITIAL EXPANSION PERIOD.— 


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1 ‘‘(i) IN GENERAL.—During the period 

2 that begins on January 1, 2014, and ends 

3 on December 31, 2018, notwithstanding 

4 subsection (b) and subject to subpara5 graphs (C) and (D) and section 

6 1902(gg)(5), the Federal medical assist7 ance percentage determined for a State 

8 that is one of the 50 States or the District 

9 of Columbia for each fiscal year quarter 

10 occurring during that period with respect 

11 to amounts expended for medical assist12 ance for newly eligible individuals de13 scribed in subclause (VIII) of section 

14 1902(a)(10)(A)(i), shall be increased by 

15 the applicable percentage point increase 

16 specified in clause (ii) for the quarter and 

17 the State. 

18 ‘‘(ii) APPLICABLE PERCENTAGE POINT

19 INCREASE.— 

20 ‘‘(I) IN GENERAL.—For purposes 

21 of clause (i), the applicable percentage 

22 point increase for a quarter is the fol23 lowing: 


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‘‘For any fiscal year 

quarter occurring in 

the calendar year: 

If the State is an expansion State, the 

applicable percentage point increase 

is: 

If the State is not an 

expansion State, the 

applicable percentage point increase is: 

2014 27.3 37.3 

2015 28.3 36.3 

2016 29.3 35.3 

2017 30.3 34.3 

2018 31.3 33.3 

1 ‘‘(II) EXPANSION STATE DE2 FINED.—For purposes of the table in 

3 subclause (I), a State is an expansion 

4 State if, on the date of the enactment 

5 of the America’s Healthy Future Act 

6 of 2009, the State offers health bene7 fits coverage to parents and nonpreg8 nant, childless adults whose income is 

9 at least 100 percent of the poverty 

10 line, that is not dependent on access 

11 to employer coverage or employment 

12 and is not limited to premium assist13 ance, hospital-only benefits, a high de14 ductible health plan (as defined in 

15 section 223(c)(2) of the Internal Rev16 enue Code of 1986) purchased 

17 through a health savings account (as 

18 defined under section 223(d) of such 

19 Code), or alternative benefits under a 


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1 demonstration program authorized 

2 under section 1938. A State that of3 fers health benefits coverage to only 

4 parents or only nonpregnant childless 

5 adults described in the preceding sen6 tence shall not be considered to be an 

7 expansion State. 

8 ‘‘(B) 2019 AND SUCCEEDING YEARS.—Be9 ginning January 1, 2019, notwithstanding sub10 section (b) but subject to subparagraph (C), the 

11 Federal medical assistance percentage deter12 mined for a State that is one of the 50 States 

13 or the District of Columbia for each fiscal year 

14 quarter occurring during that period with re15 spect to amounts expended for medical assist16 ance for newly eligible individuals described in 

17 subclause (VIII) of section 1902(a)(10)(A)(i), 

18 shall be increased by 32.3 percentage points. 

19 ‘‘(C) LIMITATION.—The Federal medical 

20 assistance percentage determined for a State 

21 under subparagraph (A) or (B) shall in no case 

22 be more than 95 percent. 

23 ‘‘(D) HIGH-NEED STATES.—Notwith24 standing subparagraph (A), in the case of a 

25 high-need State, during the period that begins 


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1 on January 1, 2014, and ends on December 31, 

2 2018, the Federal medical assistance percent3 age determined for each fiscal year quarter oc4 curring during that period with respect to 

5 amounts expended for medical assistance for 

6 newly eligible individuals described in subclause 

7 (VIII) of section 1902(a)(10)(A)(i), shall be 

8 equal to 100 percent. For purposes of the pre9 ceding sentence, the term ‘high-need State’ 

10 means a State that is one of the 50 States or 

11 the District of Columbia, on the date of the en12 actment of the America’s Healthy Future Act 

13 of 2009, has a total Medicaid enrollment under 

14 the State plan under this title and under any 

15 waiver of the plan that is below the national av16 erage for Medicaid enrollment as a percentage 

17 of State population, and for August 2009, has 

18 a seasonally-adjusted unemployment rate that is 

19 at least 12 percent, as determined by the Bu20 reau of Labor Statistics of the Department of 

21 Labor. 

22 ‘‘(2) DEFINITIONS.—In this subsection: 

23 ‘‘(A) NEWLY ELIGIBLE.—The term ‘newly 

24 eligible’ means, with respect to an individual de25 scribed in subclause (VIII) of section 


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1 1902(a)(10)(A)(i), an individual who is not 

2 under 19 years of age (or such higher age as 

3 the State may have elected under section 

4 1902(l)(1)(D)) and who, on the date of enact5 ment of the America’s Healthy Future Act of 

6 2009, is not eligible under the State plan or 

7 under a waiver of the plan for full benefits or 

8 for benchmark coverage described in subpara9 graph (A), (B), or (C) of section 1937(b)(1) or 

10 benchmark equivalent coverage described in sec11 tion 1937(b)(2) that has an aggregate actuarial 

12 value that is at least actuarially equivalent to 

13 benchmark coverage described in subparagraph 

14 (A), (B), or (C) of section 1937(b)(1), or is eli15 gible but not enrolled (or is on a waiting list) 

16 for such benefits or coverage through a waiver 

17 under the plan that has a capped or limited en18 rollment that is full. 

19 ‘‘(B) FULL BENEFITS.—The term ‘full 

20 benefits’ means, with respect to an individual, 

21 medical assistance for all services covered under 

22 the State plan under this title that is not less 

23 in amount, duration, or scope, or is determined 

24 by the Secretary to be substantially equivalent, 


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1 to the medical assistance available for an indi2 vidual described in section 1902(a)(10)(A)(i).’’. 

3 (4) STATE OPTION TO OFFER COVERAGE EAR4 LIER AND PRESUMPTIVE ELIGIBILITY; CHILDREN

5 REQUIRED TO HAVE COVERAGE FOR PARENTS TO BE

6 ELIGIBLE.—Subsection (k) of section 1902 of the 

7 Social Security Act (as added by paragraph (2)), is 

8 amended by inserting after paragraph (1) the fol9 lowing: 

10 ‘‘(2) A State may elect through a State plan amend11 ment to provide medical assistance to individuals described 

12 in subclause (VIII) of subsection (a)(10)(A)(i) beginning 

13 with the first day of any fiscal year quarter that begins 

14 on or after January 1, 2011, and before January 1, 2014. 

15 A State may elect to phase-in the extension of eligibility 

16 for medical assistance to such individuals based on in17 come, so long as the State does not extend such eligibility 

18 to individuals described in such subclause with higher in19 come before making individuals described in such sub20 clause with lower income eligible for medical assistance. 

21 ‘‘(3) If the State has elected the option to provide 

22 for a period of presumptive eligibility under section 1920 

23 or 1920A, the State may elect to provide for a period of 

24 presumptive eligibility for medical assistance (not to ex25 ceed 60 days) for individuals described in subclause (VIII) 


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1 of subsection (a)(10)(A)(i) in the same manner as the 

2 State provides for such a period under that section, sub3 ject to such guidance as the Secretary shall establish. 

4 ‘‘(4) If an individual described in subclause (VIII) of 

5 subsection (a)(10)(A)(i) is the parent of a child who is 

6 under 19 years of age (or such higher age as the State 

7 may have elected under section 1902(l)(1)(D)) who is eli8 gible for medical assistance under the State plan or under 

9 a waiver of such plan, the individual may not be enrolled 

10 under the State plan unless the individual’s child is en11 rolled under the State plan or under a waiver of the plan 

12 or is enrolled in other health insurance coverage. For pur13 poses of the preceding sentence, the term ‘parent’ includes 

14 an individual treated as a caretaker relative for purposes 

15 of carrying out section 1931 and a noncustodial parent.’’. 

16 (5) CONFORMING AMENDMENTS.— 

17 (A) Section 1902(a)(10) of such Act (42 

18 U.S.C. 1396a(a)(10)) is amended in the matter 

19 following subparagraph (G), by striking ‘‘and 

20 (XIV)’’ and inserting ‘‘(XIV)’’ and by inserting 

21 ‘‘and (XV) the medical assistance made avail22 able to an individual described in subparagraph 

23 (A)(i)(VIII) shall be limited to medical assist24 ance described in subsection (k)(1)’’ before the 

25 semicolon. 


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1 (B) Section 1902(l)(2)(C) of such Act (42 

2 U.S.C. 1396a(l)(2)(C)) is amended by striking 

3 ‘‘100’’ and inserting ‘‘133’’. 

4 (C) Section 1905(a) of such Act (42 

5 U.S.C. 1396d(a)) is amended in the matter pre6 ceding paragraph (1)— 

7 (i) by striking ‘‘or’’ at the end of 

8 clause (xii); 

9 (ii) by inserting ‘‘or’’ at the end of 

10 clause (xiii); and 

11 (iii) by inserting after clause (xiii) the 

12 following: 

13 ‘‘(xiv) individuals described in section 

14 1902(a)(10)(A)(i)(VIII),’’. 

15 (D) Section 1903(f)(4) of such Act (42 

16 U.S.C. 1396b(f)(4)) is amended by inserting 

17 ‘‘1902(a)(10)(A)(i)(VIII),’’ after 

18 ‘‘1902(a)(10)(A)(i)(VII),’’. 

19 (E) Section 1937(a)(1)(B) of such Act (42 

20 U.S.C. 1396u–7(a)(1)(B)) is amended by in21 serting ‘‘subclause (VIII) of section 

22 1902(a)(10)(A)(i) or under’’ after ‘‘eligible 

23 under’’. 


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1 (b) MAINTENANCE OF MEDICAID INCOME ELIGI2 BILITY.—Section 1902 of the Social Security Act (42 

3 U.S.C. 1396a) is amended— 

4 (1) in subsection (a)— 

5 (A) by striking ‘‘and’’ at the end of para6 graph (72); 

7 (B) by striking the period at the end of 

8 paragraph (73) and inserting ‘‘; and’’; and 

9 (C) by inserting after paragraph (73) the 

10 following new paragraph: 

11 ‘‘(74) provide for maintenance of effort under 

12 the State plan or under any waiver of the plan in 

13 accordance with subsection (gg).’’; and 

14 (2) by adding at the end the following new sub15 section: 

16 ‘‘(gg) MAINTENANCE OF EFFORT.— 

17 ‘‘(1) GENERAL REQUIREMENT TO MAINTAIN

18 ELIGIBILITY STANDARDS UNTIL STATE EXCHANGE IS

19 FULLY OPERATIONAL.—Subject to the succeeding 

20 paragraphs of this subsection, during the period that 

21 begins on the date of enactment of the America’s 

22 Healthy Future Act of 2009 and ends on the date 

23 on which the Secretary determines that an exchange 

24 established by the State under section 2235 is fully 

25 operational, as a condition for receiving any Federal 


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1 payments under section 1903(a) for calendar quar2 ters occurring during such period, a State shall not 

3 have in effect eligibility standards, methodologies, or 

4 procedures under the State plan under this title or 

5 under any waiver of such plan that is in effect dur6 ing that period, that are more restrictive than the 

7 eligibility standards, methodologies, or procedures, 

8 respectively, under the plan or waiver that are in ef9 fect on the date of enactment of the America’s 

10 Healthy Future Act of 2009. 

11 ‘‘(2) CONTINUATION OF ELIGIBILITY STAND12 ARDS FOR ADULTS WITH INCOME AT OR BELOW 133

13 PERCENT OF POVERTY UNTIL JANUARY 1, 2014.— 

14 The requirement under paragraph (1) shall continue 

15 to apply to a State through December 31, 2013, 

16 with respect to the eligibility standards, methodolo17 gies, and procedures under the State plan under this 

18 title or under any waiver of such plan that are appli19 cable to determining the eligibility for medical assist20 ance of adults whose income does not exceed 133 

21 percent of the poverty line (as defined in section 

22 2110(c)(5)). 

23 ‘‘(3) CONTINUATION OF ELIGIBILITY STAND24 ARDS FOR CHILDREN UNTIL OCTOBER 1, 2019.—The 

25 requirement under paragraph (1) shall continue to 


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1 apply to a State through September 30, 2019, with 

2 respect to the eligibility standards, methodologies, 

3 and procedures under the State plan under this title 

4 or under any waiver of such plan that are applicable 

5 to determining the eligibility for medical assistance 

6 of any child who is under 19 years of age (or such 

7 higher age as the State may have elected under sec8 tion 1902(l)(1)(D)). 

9 ‘‘(4) NONAPPLICATION.—During the period 

10 that begins on January 1, 2011, and ends on De11 cember 31, 2013, the requirement under paragraph 

12 (1) shall not apply to a State with respect to non13 pregnant, nondisabled adults who are eligible for 

14 medical assistance under the State plan or under a 

15 waiver of the plan at the option of the State and 

16 whose income exceeds 133 percent of the poverty 

17 line (as defined in section 2110(c)(5)) applicable to 

18 a family of the size involved if, on or after December 

19 31, 2010, the State certifies to the Secretary that, 

20 with respect to the State fiscal year during which 

21 the certification is made, the State has a budget def22 icit, or with respect to the succeeding State fiscal 

23 year, the State is projected to have a budget deficit. 

24 Upon submission of such a certification to the Sec25 retary, the requirement under paragraph (1) shall 


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1 not apply to the State with respect to any remaining 

2 portion of the period described in the preceding sen3 tence. 

4 ‘‘(5) ADDITIONAL FEDERAL FINANCIAL PAR5 TICIPATION.— 

6 ‘‘(A) IN GENERAL.—During the period 

7 that begins on October 1, 2013, and ends on 

8 September 30, 2019, notwithstanding section 

9 1905(b), the Federal medical assistance per10 centage otherwise determined for a State under 

11 such section with respect to a fiscal year for 

12 amounts expended for medical assistance for in13 dividuals who are not newly eligible (as defined 

14 in section 1905(y)(2)(A)) individuals described 

15 in subclause (VIII) of section 

16 1902(a)(10)(A)(i), shall— 

17 ‘‘(i) in the case of a State that is one 

18 of the 50 States or the District of Colum19 bia, be increased by 0.15 percentage point; 

20 and 

21 ‘‘(ii) in the case of any other State, be 

22 increased by 0.075 percentage point. 

23 ‘‘(B) SCOPE OF APPLICATION.—The in24 crease in the Federal medical assistance per25 centage for a State under subparagraph (A) 


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1 shall apply only for purposes of this title and 

2 shall not apply with respect to— 

3 ‘‘(i) disproportionate share hospital 

4 payments described in section 1923; 

5 ‘‘(ii) payments under title IV; 

6 ‘‘(iii) payments under title XXI; and 

7 ‘‘(iv) payments under this title that 

8 are based on the enhanced FMAP de9 scribed in section 2105(b). 

10 ‘‘(6) DETERMINATION OF COMPLIANCE.— 

11 ‘‘(A) STATES SHALL APPLY MODIFIED

12 GROSS INCOME.—A State’s determination of in13 come in accordance with subsection (e)(14) 

14 shall not be considered to be eligibility stand15 ards, methodologies, or procedures that are 

16 more restrictive than the standards, methodolo17 gies, or procedures in effect under the State 

18 plan or under a waiver of the plan on the date 

19 of enactment of the America’s Healthy Future 

20 Act of 2009 for purposes of determining com21 pliance with the requirements of paragraph (1), 

22 (2), or (3). 

23 ‘‘(B) STATES MAY EXPAND ELIGIBILITY OR

24 MOVE WAIVERED POPULATIONS INTO COVERAGE

25 UNDER THE STATE PLAN.—With respect to any 


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1 period applicable under paragraph (1), (2), or 

2 (3), a State that applies eligibility standards, 

3 methodologies, or procedures under the State 

4 plan under this title or under any waiver of the 

5 plan that are less restrictive than the eligibility 

6 standards, methodologies, or procedures, ap7 plied under the State plan or under a waiver of 

8 the plan on the date of enactment of the Amer9 ica’s Healthy Future Act of 2009, or that 

10 makes individuals who, on such date of enact11 ment, are eligible for medical assistance under 

12 a waiver of the State plan, after such date of 

13 enactment eligible for medical assistance 

14 through a State plan amendment with an in15 come eligibility level that is not less than the in16 come eligibility level that applied under the 

17 waiver, or as a result of the application of sub18 clause (VIII) of section 1902(a)(10)(A)(i), shall 

19 not be considered to have in effect eligibility 

20 standards, methodologies, or procedures that 

21 are more restrictive than the standards, meth22 odologies, or procedures in effect under the 

23 State plan or under a waiver of the plan on the 

24 date of enactment of the America’s Healthy Fu25 ture Act of 2009 for purposes of determining 


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1 compliance with the requirements of paragraph 

2 (1), (2), or (3).’’. 

3 (c) MEDICAID BENCHMARK BENEFITS MUST CON4 SIST OF AT LEAST ESSENTIAL BENEFITS.—Section 

5 1937(b) of such Act (42 U.S.C. 1396u–7(b)) is amend6 ed— 

7 (1) in paragraph (1), in the matter preceding 

8 subparagraph (A), by inserting ‘‘subject to para9 graphs (5) and (6),’’ before ‘‘each’’; 

10 (2) in paragraph (2)— 

11 (A) in the mater preceding subparagraph 

12 (A), by inserting ‘‘subject to paragraphs (5) 

13 and (6)’’ after ‘‘subsection (a)(1),’’; 

14 (B) in subparagraph (A)— 

15 (i) by redesignating clauses (iv) and 

16 (v) as clauses (v) and (vi), respectively; 

17 and 

18 (ii) by inserting after clause (iii), the 

19 following: 

20 ‘‘(IV) Coverage of prescription 

21 drugs.’’; and 

22 (C) in subparagraph (C)— 

23 (i) by striking clauses (i) and (ii); and 

24 (ii) by redesignating clauses (iii) and 

25 (iv) as clauses (i) and (ii), respectively; and 


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1 (3) by adding at the end the following new 

2 paragraphs: 

3 ‘‘(5) MINIMUM STANDARDS.—Effective January 

4 1, 2014, any benchmark benefit package under para5 graph (1) or benchmark equivalent coverage under 

6 paragraph (2) must provide at least essential bene7 fits described in section 2242 (as defined and speci8 fied annually by the Secretary in accordance with 

9 subsection (e) of that section). 

10 ‘‘(6) MENTAL HEALTH SERVICES PARITY.— 

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

12 benchmark benefit package under paragraph 

13 (1) or benchmark equivalent coverage under 

14 paragraph (2) that provides both medical and 

15 surgical benefits and mental health or sub16 stance use disorder benefits, such plan shall en17 sure that the financial requirements and treat18 ment limitations applicable to such mental 

19 health or substance use disorder benefits com20 ply with the requirements of section 2705(a) of 

21 the Public Health Service Act in the same man22 ner as such requirements apply to a group 

23 health plan. 

24 ‘‘(B) DEEMED COMPLIANCE.—Coverage 

25 provided with respect to an individual described 


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1 in section 1905(a)(4)(B) and covered under the 

2 State plan under section 1902(a)(10)(A) of the 

3 services described in section 1905(a)(4)(B) (re4 lating to early and periodic screening, diag5 nostic, and treatment services defined in section 

6 1905(r)) and provided in accordance with sec7 tion 1902(a)(43), shall be deemed to satisfy the 

8 requirements of subparagraph (A).’’. 

9 (d) ANNUAL REPORTS ON MEDICAID ENROLL10 MENT.— 

11 (1) STATE REPORTS.—Section 1902(a) of the 

12 Social Security Act (42 U.S.C. 1396a(a)), as amend13 ed by subsection (b), is amended— 

14 (A) by striking ‘‘and’’ at the end of para15 graph (73); 

16 (B) by striking the period at the end of 

17 paragraph (74) and inserting ‘‘; and’’; and 

18 (C) by inserting after paragraph (74) the 

19 following new paragraph: 

20 ‘‘(75) provide that, beginning January 2015, 

21 and annually thereafter, the State shall submit a re22 port to the Secretary that contains— 

23 ‘‘(A) the total number of newly enrolled in24 dividuals in the State plan or under a waiver of 

25 the plan for the fiscal year ending on SepVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00277 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tember 30 of the preceding calendar year, 

2 disaggregated by population, including children, 

3 parents, nonpregnant childless adults, disabled 

4 individuals, elderly individuals, and such other 

5 categories or sub-categories of individuals eligi6 ble for medical assistance under the State plan 

7 or under a waiver of the plan as the Secretary 

8 may require; and 

9 ‘‘(B) a description of the outreach and en10 rollment processes used by the State during 

11 such fiscal year.’’. 

12 (2) REPORTS TO CONGRESS.—Beginning April 

13 2015, and annually thereafter, the Secretary of 

14 Health and Human Services shall submit a report to 

15 the appropriate committees of Congress on the total 

16 new enrollment in Medicaid for the fiscal year end17 ing on September 30 of the preceding calendar year 

18 on a national and State-by-State basis, and shall in19 clude in each such report such recommendations for 

20 administrative or legislative changes to improve en21 rollment in the Medicaid program as the Secretary 

22 determines appropriate. 

23 (e) STATE OPTION FOR COVERAGE FOR INDIVIDUALS

24 WITH INCOME THAT EXCEEDS 133 PERCENT OF THE

25 POVERTY LINE.— 


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1 (1) COVERAGE AS OPTIONAL CATEGORICALLY

2 NEEDY GROUP.—Section 1902 of the Social Security 

3 Act (42 U.S.C. 1396a) is amended— 

4 (A) in subsection (a)(10)(A)(ii)— 

5 (i) in subclause (XVIII), by striking 

6 ‘‘or’’ at the end; 

7 (ii) in subclause (XIX), by adding 

8 ‘‘or’’ at the end; and 

9 (iii) by adding at the end the fol10 lowing new subclause: 

11 ‘‘(XX) beginning January 1, 

12 2014, who are under 65 years of age 

13 and are not described in a previous 

14 subclause of this clause, and whose in15 come (as determined under subsection 

16 (e)(14)) exceeds 133 percent of the 

17 poverty line (as defined in section 

18 2110(c)(5)) applicable to a family of 

19 the size involved but does not exceed 

20 the highest income eligibility level es21 tablished under the State plan or 

22 under a waiver of the plan, subject to 

23 subsection (hh);’’ and 

24 (B) by adding at the end the following new 

25 subsection: 


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1 ‘‘(hh)(1) A State may elect to phase-in the extension 

2 of eligibility for medical assistance to individuals described 

3 in subclause (XX) of subsection (a)(10)(A)(ii) based on 

4 income, so long as the State does not extend such eligi5 bility to individuals described in such subclause with high6 er income before making individuals described in such sub7 clause with lower income eligible for medical assistance. 

8 ‘‘(2) If the State has elected the option to provide 

9 for a period of presumptive eligibility under section 1920 

10 or 1920A, the State may elect to provide for a period of 

11 presumptive eligibility for medical assistance (not to ex12 ceed 60 days) for individuals described in subclause (XX) 

13 of subsection (a)(10)(A)(ii) in the same manner as the 

14 State provides for such a period under that section, sub15 ject to such guidance as the Secretary shall establish. 

16 ‘‘(3) If an individual described in subclause (XX) of 

17 subsection (a)(10)(A)(ii) is the parent of a child who is 

18 under 19 years of age (or such higher age as the State 

19 may have elected under section 1902(l)(1)(D)) who is eli20 gible for medical assistance under the State plan or under 

21 a waiver of such plan, the individual may not be enrolled 

22 under the State plan unless the individual’s child is en23 rolled under the State plan or under a waiver of the plan 

24 or is enrolled in other health insurance coverage. For pur25 poses of the preceding sentence, the term ‘parent’ includes 


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1 an individual treated as a caretaker relative for purposes 

2 of carrying out section 1931 and a noncustodial parent.’’. 

3 (2) CONFORMING AMENDMENTS.— 

4 (A) Section 1905(a) of such Act (42 

5 U.S.C. 1396d(a)), as amended by subsection 

6 (a)(5)(C), is amended in the matter preceding 

7 paragraph (1)— 

8 (i) by striking ‘‘or’’ at the end of 

9 clause (xiii); 

10 (ii) by inserting ‘‘or’’ at the end of 

11 clause (xiv); and 

12 (iii) by inserting after clause (xiv) the 

13 following: 

14 ‘‘(xv) individuals described in section 

15 1902(a)(10)(A)(ii)(XX),’’. 

16 (B) Section 1903(f)(4) of such Act (42 

17 U.S.C. 1396b(f)(4)) is amended by inserting 

18 ‘‘1902(a)(10)(A)(ii)(XX),’’ after 

19 ‘‘1902(a)(10)(A)(ii)(XIX),’’. 

20 SEC. 1602. INCOME ELIGIBILITY FOR NONELDERLY DETER21 MINED USING MODIFIED GROSS INCOME. 

22 (a) IN GENERAL.—Section 1902(e) of the Social Se23 curity Act (42 U.S.C. 1396a(e)) is amended by adding at 

24 the end the following: 


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1 ‘‘(14) INCOME DETERMINED USING MODIFIED

2 GROSS INCOME.— 

3 ‘‘(A) IN GENERAL.—Notwithstanding sub4 section (r) or any other provision of this title, 

5 except as provided in subparagraph (D), the 

6 modified gross income of an individual or fam7 ily, as determined for purposes of allowing a 

8 premium credit assistance amount for the pur9 chase of a qualified health benefits plan under 

10 section 36B of the Internal Revenue Code of 

11 1986, shall be used for purposes of determining 

12 income eligibility for medical assistance under 

13 the State plan and under any waiver of such 

14 plan, and for any other purpose applicable 

15 under the plan or waiver for which a determina16 tion of income is required, including imposition 

17 of premiums and cost-sharing. 

18 ‘‘(B) NO INCOME OR EXPENSE DIS19 REGARDS.—No type of expense, block, or other 

20 income disregard shall be applied by a State in 

21 determining the modified gross income of an in22 dividual or family under the State plan or 

23 under a waiver of the plan. 

24 ‘‘(C) NO ASSETS TEST.—A State shall not 

25 apply any assets or resources test for purposes 


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1 of determining the eligibility for medical assist2 ance under the State plan or under a waiver of 

3 the plan of an individual or family. 

4 ‘‘(D) EXCEPTIONS.— 

5 ‘‘(i) INDIVIDUALS ELIGIBLE BECAUSE

6 OF OTHER AID OR ASSISTANCE, ELDERLY

7 INDIVIDUALS, MEDICALLY NEEDY INDIVID8 UALS, INDIVIDUALS ELIGIBLE FOR MEDI9 CARE COST-SHARING, AND OPTIONAL TAR10 GETED LOW-INCOME CHILDREN.—Sub11 paragraphs (A), (B), and (C) shall not 

12 apply to the determination of eligibility 

13 under the State plan or under a waiver for 

14 medical assistance for the following: 

15 ‘‘(I) Individuals who are eligible 

16 for medical assistance under the State 

17 plan or under a waiver of the plan on 

18 a basis that does not require a deter19 mination of income by the State agen20 cy administering the State plan or 

21 waiver, including as a result of eligi22 bility for, or receipt of, other Federal 

23 or State aid or assistance, individuals 

24 who are eligible on the basis of receiv25 ing (or being treated as if receiving) 


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1 supplemental security income benefits 

2 under title XVI, and individuals who 

3 are eligible as a result of being or 

4 being deemed to be a child in foster 

5 care under the responsibility of the 

6 State. 

7 ‘‘(II) Individuals who have at8 tained age 65 or who are title II dis9 ability beneficiaries (as defined in sec10 tion 1148(k)(3)). 

11 ‘‘(III) Individuals described in 

12 subsection (a)(10)(C). 

13 ‘‘(IV) Individuals described in 

14 any clause of subsection (a)(10)(E). 

15 ‘‘(V) Optional targeted low-in16 come children described in section 

17 1905(u)(2)(B). 

18 ‘‘(ii) EXPRESS LANE AGENCY FIND19 INGS.—In the case of a State that elects 

20 the Express Lane option under paragraph 

21 (13), notwithstanding subparagraphs (A), 

22 (B), and (C), the State may rely on a find23 ing made by an Express Lane agency in 

24 accordance with that paragraph relating to 

25 the income of an individual for purposes of 


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1 determining the individual’s eligibility for 

2 medical assistance under the State plan or 

3 under a waiver of the plan. 

4 ‘‘(iii) MEDICARE PRESCRIPTION DRUG

5 SUBSIDIES DETERMINATIONS.—Subpara6 graphs (A), (B), and (C) shall not apply to 

7 any determinations of eligibility for pre8 mium and cost-sharing subsidies under 

9 and in accordance with section 1860D–14 

10 made by the State pursuant to section 

11 1935(a)(2). 

12 ‘‘(iv) LONG-TERM CARE.—Subpara13 graphs (A), (B), and (C) shall not apply to 

14 any determinations of eligibility of individ15 uals for purposes of medical assistance for 

16 services described in section 1917(c)(1)(C). 

17 ‘‘(v) GRANDFATHER OF CURRENT EN18 ROLLEES UNTIL DATE OF NEXT REGULAR

19 REDETERMINATION.—An individual who, 

20 on July 1, 2013, is enrolled in the State 

21 plan or under a waiver of the plan and who 

22 would be determined ineligible for medical 

23 assistance solely because of the application 

24 of the modified gross income standard de25 scribed in subparagraph (A), shall remain 


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1 eligible for medical assistance under the 

2 State plan or waiver (and subject to the 

3 same premiums and cost-sharing as ap4 plied to the individual on that date) 

5 through March 31, 2014, or the date on 

6 which the individual’s next regularly sched7 uled redetermination of eligibility is to 

8 occur, whichever is later. 

9 ‘‘(E) LIMITATION ON SECRETARIAL AU10 THORITY.—The Secretary shall not waive com11 pliance with the requirements of this paragraph 

12 except to the extent necessary to permit a State 

13 to coordinate eligibility requirements for dual 

14 eligible individuals (as defined in section 

15 1915(h)(2)(B)) under the State plan or under 

16 a waiver of the plan and under title XVIII and 

17 individuals who require the level of care pro18 vided in a hospital, a nursing facility, or an in19 termediate care facility for the mentally re20 tarded.’’. 

21 (b) CONFORMING AMENDMENT.—Section 

22 1902(a)(17) of such Act (42 U.S.C. 1396a(a)(17)) is 

23 amended by inserting ‘‘(e)(14),’’ before ‘‘(l)(3)’’. 

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

25 subsections (a) and (b) take effect on July 1, 2013. 


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1 SEC. 1603. REQUIREMENT TO OFFER PREMIUM ASSIST2 ANCE FOR EMPLOYER-SPONSORED INSUR3 ANCE. 

4 (a) IN GENERAL.—Section 1906A of such Act (42 

5 U.S.C. 1396e–1) is amended— 

6 (1) in subsection (a)— 

7 (A) by striking ‘‘may elect to’’ and insert8 ing ‘‘shall’’; 

9 (B) by striking ‘‘under age 19’’; and 

10 (C) by inserting ‘‘, in the case of an indi11 vidual under age 19,’’ after ‘‘(and’’; 

12 (2) in subsection (c), in the first sentence, by 

13 striking ‘‘under age 19’’; and 

14 (3) in subsection (d)(2)— 

15 (A) in the first sentence, by striking 

16 ‘‘under age 19’’; and 

17 (B) by striking the third sentence and in18 serting ‘‘A State may not require, as a condi19 tion of an individual (or the individual’s parent) 

20 being or remaining eligible for medical assist21 ance under this title, that the individual (or the 

22 individual’s parent) apply for enrollment in 

23 qualified employer-sponsored coverage under 

24 this section.’’. 


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1 (b) CONFORMING AMENDMENT.—The heading for 

2 section 1906A of such Act (42 U.S.C. 1396e–1) is amend3 ed by striking ‘‘OPTION FOR CHILDREN’’. 

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

5 this section take effect on July 1, 2013. 

6 SEC. 1604. PAYMENTS TO TERRITORIES. 

7 (a) INCREASE IN LIMIT ON PAYMENTS.—Section 

8 1108(g) of the Social Security Act (42 U.S.C. 1308(g)) 

9 is amended— 

10 (1) in paragraph (2), in the matter preceding 

11 subparagraph (A), by striking ‘‘paragraph (3)’’ and 

12 inserting ‘‘paragraphs (3) and (5)’’; 

13 (2) in paragraph (4), by striking ‘‘and (3)’’ and 

14 inserting ‘‘(3), and (4)’’; and 

15 (3) by adding at the end the following para16 graph: 

17 ‘‘(5) FISCAL YEAR 2011 AND THEREAFTER.— 

18 The amounts otherwise determined under this sub19 section for Puerto Rico, the Virgin Islands, Guam, 

20 the Northern Mariana Islands, and American Samoa 

21 for the second, third, and fourth quarters of fiscal 

22 year 2011, and for each fiscal year after fiscal year 

23 2011 (after the application of subsection (f) and the 

24 preceding paragraphs of this subsection), shall be in25 creased by 30 percent.’’. 


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1 (b) DISREGARD OF PAYMENTS FOR MANDATORY EX2 PANDED ENROLLMENT.—Section 1108(g)(4) of such Act 

3 (42 U.S.C. 1308(g)) is amended— 

4 (1) by striking ‘‘to fiscal years beginning’’ and 

5 inserting ‘‘to— 

6 ‘‘(A) fiscal years beginning’’; 

7 (2) by striking the period at the end and insert8 ing ‘‘; and’’; and 

9 (3) by adding at the end the following: 

10 ‘‘(B) fiscal years beginning with fiscal year 

11 2014, payments made to Puerto Rico, the Vir12 gin Islands, Guam, the Northern Mariana Is13 lands, or American Samoa on the basis of the 

14 Federal medical assistance percentage as in15 creased under section 1902(gg)(5), and pay16 ments made with respect to amounts expended 

17 for medical assistance for newly eligible (as de18 fined in section 1905(y)(2)) nonpregnant child19 less adults who are eligible under subclause 

20 (VIII) of section 1902(a)(10)(A)(i) and whose 

21 income (as determined under section 

22 1902(e)(14)) does not exceed (in the case of 

23 each such commonwealth and territory respec24 tively) the income eligibility level in effect for 

25 that population under title XIX or under a 


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1 waiver on the date of enactment of the Amer2 ica’s Healthy Future Act of 2009, shall not be 

3 taken into account in applying subsection (f) 

4 (as increased in accordance with paragraphs 

5 (1), (2), (3), and (5) of this subsection) to such 

6 commonwealth or territory for such fiscal 

7 year.’’. 

8 (c) INCREASED FMAP.— 

9 (1) IN GENERAL.—The first sentence of section 

10 1905(b) of the Social Security Act (42 U.S.C. 

11 1396d(b)) is amended by striking ‘‘shall be 50 per 

12 centum’’ and inserting ‘‘shall be 55 percent’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by paragraph (1) takes effect on January 1, 2011. 

15 SEC. 1605. MEDICAID IMPROVEMENT FUND RESCISSION. 

16 (a) RESCISSION.—Any amounts available to the Med17 icaid Improvement Fund established under section 1941 

18 of the Social Security Act (42 U.S.C. 1396w–1) for any 

19 of fiscal years 2014 through 2018 that are available for 

20 expenditure from the Fund and that are not so obligated 

21 as of the date of the enactment of this Act are rescinded. 

22 (b) CONFORMING AMENDMENTS.—Section 

23 1941(b)(1) of the Social Security Act (42 U.S.C. 1396w– 

24 1(b)(1)) is amended— 


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1 (1) in subparagraph (A), by striking 

2 ‘‘$100,000,000’’ and inserting ‘‘$0’’; and 

3 (2) in subparagraph (B), by striking 

4 ‘‘$150,000,000’’ and inserting ‘‘$0’’. 

5 PART II—CHILDREN’S HEALTH INSURANCE 

6 PROGRAM 

7 SEC. 1611. ADDITIONAL FEDERAL FINANCIAL PARTICIPA8 TION FOR CHIP. 

9 (a) IN GENERAL.—Section 2105(b) of the Social Se10 curity Act (42 U.S.C. 1397ee(b)) is amended by adding 

11 at the end the following: ‘‘Notwithstanding the preceding 

12 sentence, during the period that begins on October 1, 

13 2013, and ends on September 30, 2019, the enhanced 

14 FMAP determined for a State for a fiscal year (or for 

15 any portion of a fiscal year occurring during such period) 

16 shall be increased by 23 percentage points, but in no case 

17 shall exceed 100 percent. The increase in the enhanced 

18 FMAP under the preceding sentence shall not apply with 

19 respect to determining the payment to a State under sub20 section (a)(1) for expenditures described in subparagraph 

21 (D)(iv), paragraphs (8), (9), (11) of subsection (c), or 

22 clause (4) of the first sentence of section 1905(b).’’. 

23 (b) MAINTENANCE OF EFFORT.—Section 2105(d) of 

24 the Social Security Act (42 U.S.C. 1397ee(d)) is amended 

25 by adding at the end the following: 


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1 ‘‘(3) CONTINUATION OF ELIGIBILITY STAND2 ARDS FOR CHILDREN UNTIL OCTOBER 1, 2019.—Dur3 ing the period that begins on the date of enactment 

4 of the America’s Healthy Future Act of 2009 and 

5 ends on September 30, 2019, a State shall not have 

6 in effect eligibility standards, methodologies, or pro7 cedures under its State child health plan (including 

8 any waiver under such plan) for children that are 

9 more restrictive than the eligibility standards, meth10 odologies, or procedures, respectively, under such 

11 plan (or waiver) as in effect on the date of enact12 ment of that Act. The preceding sentence shall not 

13 be construed as preventing a State during such pe14 riod from— 

15 ‘‘(A) applying eligibility standards, meth16 odologies, or procedures for children under the 

17 State child health plan or under any waiver of 

18 the plan that are less restrictive than the eligi19 bility standards, methodologies, or procedures, 

20 respectively, for children under the plan or 

21 waiver that are in effect on the date of enact22 ment of such Act; or 

23 ‘‘(B) imposing a limitation described in 

24 section 2112(b)(7) for a fiscal year in order to 

25 limit expenditures under the State child health 


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1 plan to those for which Federal financial par2 ticipation is available under this section for the 

3 fiscal year.’’. 

4 (c) NO ENROLLMENT BONUS PAYMENTS FOR CHIL5 DREN ENROLLED AFTER FISCAL YEAR 2013.—Section 

6 2105(a)(3)(F)(iii) of the Social Security Act (42 U.S.C. 

7 1397ee(a)(3)(F)(iii)) is amended by inserting ‘‘or any chil8 dren enrolled on or after October 1, 2013’’ before the pe9 riod. 

10 (d) APPLICATION OF STREAMLINED ENROLLMENT

11 SYSTEM.—Section 2107(e)(1) of the Social Security Act 

12 (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end 

13 the following: 

14 ‘‘(M) Section 1943(b) (relating to coordi15 nation with State health insurance exchanges 

16 and the State Medicaid agency).’’. 

17 SEC. 1612. TECHNICAL CORRECTIONS. 

18 (a) CHIPRA.—Effective as if included in the enact19 ment of the Children’s Health Insurance Program Reau20 thorization Act of 2009 (Public Law 111–3) (in this sec21 tion referred to as ‘‘CHIPRA’’): 

22 (1) Section 2104(m) of the Social Security Act, 

23 as added by section 102 of CHIPRA, is amended— 

24 (A) by redesignating paragraph (7) as 

25 paragraph (8); and 


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1 (B) by inserting after paragraph (6), the 

2 following: 

3 ‘‘(7) ADJUSTMENT OF FISCAL YEARS 2009 AND

4 2010 ALLOTMENTS TO ACCOUNT FOR CHANGES IN

5 PROJECTED SPENDING FOR CERTAIN PREVIOUSLY

6 APPROVED EXPANSION PROGRAMS.—In the case of 

7 one of the 50 States or the District of Columbia that 

8 has an approved State plan amendment effective 

9 January 1, 2006, to provide child health assistance 

10 through the provision of benefits under the State 

11 plan under title XIX for children from birth through 

12 age 5 whose family income does not exceed 200 per13 cent of the poverty line, the Secretary shall increase 

14 the allotments otherwise determined for the State 

15 for fiscal years 2009 and 2010 under paragraphs (1) 

16 and (2)(A)(i) in order to take into account changes 

17 in the projected total Federal payments to the State 

18 under this title for such fiscal years that are attrib19 utable to the provision of such assistance to such 

20 children.’’. 

21 (2) Section 605 of CHIPRA is amended by 

22 striking ‘‘legal residents’’ and insert ‘‘lawfully resid23 ing in the United States’’. 

24 (3) Subclauses (I) and (II) of paragraph 

25 (3)(C)(i) of section 2105(a) of the Social Security 


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1 Act (42 U.S.C. 1397ee(a)(3)(ii)), as added by sec2 tion 104 of CHIPRA, are each amended by striking 

3 ‘‘, respectively’’. 

4 (4) Section 2105(a)(3)(E)(ii) of the Social Se5 curity Act (42 U.S.C. 1397ee(a)(3)(E)(ii)), as added 

6 by section 104 of CHIPRA, is amended by striking 

7 subclause (IV). 

8 (5) Section 2105(c)(9)(B) of the Social Security 

9 Act (42 U.S.C. 1397e(c)(9)(B)), as added by section 

10 211(c)(1) of CHIPRA, is amended by striking ‘‘sec11 tion 1903(a)(3)(F)’’ and inserting ‘‘section 

12 1903(a)(3)(G)’’. 

13 (6) Section 2109(b)(2)(B) of the Social Secu14 rity Act (42 U.S.C. 1397ii(b)(2)(B)), as added by 

15 section 602 of CHIPRA, is amended by striking 

16 ‘‘the child population growth factor under section 

17 2104(m)(5)(B)’’ and inserting ‘‘a high-performing 

18 State under section 2111(b)(3)(B)’’. 

19 (7) Section 211(a)(1)(B) of CHIPRA is amend20 ed— 

21 (A) by striking ‘‘is amended’’ and all that 

22 follows through ‘‘adding’’ and inserting ‘‘is 

23 amended by adding’’; and 

24 (B) by redesignating the new subpara25 graph to be added by such section to section 


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1 1903(a)(3) of the Social Security Act as a new 

2 subparagraph (H). 

3 (b) ARRA.—Effective as if included in the enactment 

4 of section 5006(a) of division B of the American Recovery 

5 and Reinvestment Act of 2009 (Public Law 111–5), the 

6 second sentence of section 1916A(a)(1) of the Social Secu7 rity Act (42 U.S.C. 1396o–1(a)(1)) is amended by striking 

8 ‘‘or (i)’’ and inserting ‘‘, (i), or (j)’’. 

9 PART III—ENROLLMENT SIMPLIFICATION 

10 SEC. 1621. ENROLLMENT SIMPLIFICATION AND COORDINA11 TION WITH STATE HEALTH INSURANCE EX12 CHANGES. 

13 Title XIX of the Social Security Act (42 U.S.C. 

14 1397aa et seq.) is amended by adding at the end the fol15 lowing: 

16 ‘‘SEC. 1943. ENROLLMENT SIMPLIFICATION AND COORDI17 NATION WITH STATE HEALTH INSURANCE EX18 CHANGES. 

19 ‘‘(a) CONDITION FOR PARTICIPATION IN MED20 ICAID.—As a condition of the State plan under this title 

21 and receipt of any Federal financial assistance under sec22 tion 1903(a) for calendar quarters beginning after Janu23 ary 1, 2013, a State shall ensure that the requirements 

24 of subsections (b), (c), and (d) are met. 


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1 ‘‘(b) ENROLLMENT SIMPLIFICATION AND COORDINA2 TION WITH STATE HEALTH INSURANCE EXCHANGES AND

3 CHIP.— 

4 ‘‘(1) IN GENERAL.—A State shall establish pro5 cedures for— 

6 ‘‘(A) enabling individuals, through an 

7 Internet website that meets the requirements of 

8 paragraph (4), to apply for medical assistance 

9 under the State plan or under a waiver of the 

10 plan, to be enrolled in the State plan or waiver, 

11 to renew their enrollment in the plan or waiver, 

12 and to consent to enrollment or reenrollment in 

13 the State plan through electronic signature; 

14 ‘‘(B) enrolling, without any further deter15 mination by the State and through such 

16 website, individuals who are identified by an ex17 change established by the State under section 

18 2235 as being eligible for— 

19 ‘‘(i) medical assistance under the 

20 State plan or under a waiver of the plan; 

21 or 

22 ‘‘(ii) child health assistance under the 

23 State child health plan under title XXI; 

24 ‘‘(C) ensuring that individuals who apply 

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1 ical assistance under the State plan or a waiver 

2 or ineligible for child health assistance under 

3 the State child health plan under title XXI, are 

4 able to apply for, and be enrolled in, coverage 

5 through such an exchange and, if applicable, 

6 obtain premium assistance for the purchase of 

7 a qualified health benefits plan under section 

8 36B of the Internal Revenue Code of 1986 

9 (and, if applicable, advance payment of such as10 sistance under section 2248 of this Act), with11 out having to submit an additional or separate 

12 application, and receive information regarding 

13 any other assistance or subsidies available for 

14 coverage obtained through the exchange; 

15 ‘‘(D) ensuring that the State agency re16 sponsible for administering the State plan 

17 under this title (in this section referred to as 

18 the ‘State Medicaid agency’), the State agency 

19 responsible for administering the State child 

20 health plan under title XXI (in this section re21 ferred to as the ‘State CHIP agency’) and an 

22 exchange established by the State under section 

23 2235 utilize a secure electronic interface suffi24 cient to allow for a determination of an individ25 ual’s eligibility for such medical assistance, 


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1 child health assistance, or premium assistance, 

2 as appropriate; and 

3 ‘‘(E) coordinating, for individuals who are 

4 enrolled in the State plan or under a waiver of 

5 the plan and who are also enrolled in a quali6 fied health benefits plan offered through such 

7 an exchange, and for individuals who are en8 rolled in the State child health plan under title 

9 XXI and who are also enrolled in a qualified 

10 health benefits plan, the provision of medical 

11 assistance or child health assistance to such in12 dividuals with the coverage provided under the 

13 qualified health benefits plan in which they are 

14 enrolled. 

15 ‘‘(2) AGREEMENTS WITH STATE HEALTH IN16 SURANCE EXCHANGES.—The State Medicaid agency 

17 and the State CHIP agency may enter into an 

18 agreement with an exchange established by the State 

19 under section 2235 under which the State Medicaid 

20 agency or State CHIP agency may determine wheth21 er a State resident is eligible for premium assistance 

22 for the purchase of a qualified health benefits plan 

23 under section 36B of the Internal Revenue Code of 

24 1986 (and, if applicable, advance payment of such 

25 assistance under section 2248 of this Act), so long 


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1 as the agreement meets such conditions and require2 ments as the Secretary of the Treasury may pre3 scribe to reduce administrative costs and the likeli4 hood of eligibility errors and disruptions in coverage. 

5 ‘‘(3) STREAMLINED ENROLLMENT SYSTEM.— 

6 The State Medicaid agency and State CHIP agency 

7 shall participate in and comply with the require8 ments for the system established under section 2239 

9 (relating to streamlined procedures for enrollment 

10 through an exchange, Medicaid, and CHIP). 

11 ‘‘(4) ENROLLMENT WEBSITE REQUIREMENTS.— 

12 The procedures established by State under para13 graph (1) shall include establishing and having in 

14 operation, not later than January 1, 2013, an Inter15 net website that is linked to any website of an ex16 change established by the State under section 2235 

17 and to the State CHIP agency (if different from the 

18 State Medicaid agency) and allows an individual who 

19 is eligible for medical assistance under the State 

20 plan or under a waiver of the plan and who is eligi21 ble to receive premium credit assistance for the pur22 chase of a qualified health benefits plan under sec23 tion 36B of the Internal Revenue Code of 1986 to 

24 compare the benefits, premiums, and cost-sharing 

25 applicable to the individual under the State plan or 


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1 waiver with the benefits, premiums, and cost-sharing 

2 available to the individual under a qualified health 

3 benefits plan offered through such an exchange, in4 cluding, in the case of a child, the coverage that 

5 would be provided for the child through the State 

6 plan or waiver with the coverage that would be pro7 vided to the child through enrollment in family cov8 erage under that plan and as supplemental coverage 

9 by the State under the State plan or waiver. 

10 ‘‘(5) CONTINUED NEED FOR ASSESSMENT FOR

11 HOME AND COMMUNITY-BASED SERVICES.—Nothing 

12 in paragraph (1) shall limit or modify the require13 ment that the State assess an individual for pur14 poses of providing home and community-based serv15 ices under the State plan or under any waiver of 

16 such plan for individuals described in subsection 

17 (a)(10)(A)(ii)(VI). 

18 ‘‘(c) OPTION FOR CERTAIN MEDICAID-ELIGIBLE

19 POPULATIONS TO ELECT SUBSIDIZED EXCHANGE COV20 ERAGE.— 

21 ‘‘(1) IN GENERAL.—The State shall establish 

22 procedures to ensure that a non-pregnant, non23 elderly adult whose income exceeds 100, but does 

24 not exceed 133 percent of the poverty line (as de25 fined in section 2110(c)(5)) who is eligible for medVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00301 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ical assistance under the State plan or under a waiv2 er of the plan and who is eligible to receive premium 

3 assistance for the purchase of a qualified health ben4 efits plan under section 36B of the Internal Revenue 

5 Code of 1986 (and advance payment of the assist6 ance under section 2248 of this Act) is— 

7 ‘‘(A) provided with the option to elect to 

8 enroll themselves, or if applicable, their family, 

9 in such a plan through an exchange established 

10 by the State under section 2235 instead of en11 rolling in the State plan under this title or a 

12 waiver of the plan and, in the case of the adult, 

13 to waive, as a result of making such an election, 

14 receipt of any medical assistance (including 

15 medical assistance for premiums and cost-shar16 ing) under the State plan or waiver; 

17 ‘‘(B) provided with— 

18 ‘‘(i) information, including through 

19 the State website established under section 

20 1902(e)(15), comparing the benefits and 

21 cost-sharing that would be available under 

22 the State plan for the adult, and if applica23 ble, the adult’s family, with the benefits 

24 and cost-sharing available to the adult, and 

25 if applicable, the adult’s family, through 


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1 qualified health benefits plans offered 

2 through such an exchange (including with 

3 respect to the various levels of coverage 

4 available to the adult or family); and 

5 ‘‘(ii) an explanation of the key dif6 ferences between the benefits and cost7 sharing available for the adult, and if ap8 plicable, the adult’s family, under the State 

9 plan or a waiver and the benefits and cost10 sharing available to the adult or family 

11 through qualified health benefits plans of12 fered through such an exchange for each of 

13 the levels of coverage available to the adult 

14 or family; and 

15 ‘‘(C) if the adult elects to enroll themselves 

16 or their family in a plan through such an ex17 change, provided with assistance in selecting 

18 and enrolling in such a plan. 

19 ‘‘(2) SUPPLEMENTAL COVERAGE, INCLUDING

20 EPSDT BENEFITS, FOR CHILDREN.—The State shall 

21 establish procedures to ensure that any child who is 

22 eligible for medical assistance under the State plan 

23 or under a waiver who is enrolled in a qualified 

24 health benefits plan through such an exchange is 

25 provided with supplemental coverage for items and 


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1 services for which medical assistance is available 

2 under the State plan or waiver and for which bene3 fits are not available under the qualified health bene4 fits plan in which the child is enrolled, including 

5 services described in section 1905(a)(4)(B) (relating 

6 to early and periodic screening, diagnostic, and 

7 treatment services defined in section 1905(r)) and 

8 provided in accordance with the requirements of sec9 tion 1902(a)(43) and medical assistance for pre10 miums and cost-sharing imposed that exceed the 

11 amounts permitted under the State plan or waiver 

12 and to assure coordination of coverage for the child 

13 under the State plan or waiver and under the quali14 fied health benefits plan in which the child is en15 rolled. 

16 ‘‘(3) WAIVER OF RECEIPT OF MEDICAL ASSIST17 ANCE FOR ELECTING ADULTS.—A nonpregnant, 

18 nonelderly adult whose income exceeds 100, but does 

19 not exceed 133 percent of the poverty line (as de20 fined in section 2110(c)(5)) who elects to enroll in 

21 a qualified health benefits plan through an exchange 

22 established by the State under section 2235 shall 

23 waive, as a result of making such an election, being 

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1 sharing) under the State plan or waiver while en2 rolled in the qualified health benefits plan. 

3 ‘‘(d) STATE CONTRIBUTION FOR MEDICAID-ELIGIBLE

4 INDIVIDUALS ELECTING COVERAGE THROUGH A STATE

5 EXCHANGE.— 

6 ‘‘(1) IN GENERAL.—Each of the 50 States and 

7 the District of Columbia shall make an annual pay8 ment (beginning with 2014) to the Secretary equal 

9 to the sum of the following products determined with 

10 respect to each month of the preceding year for each 

11 population described in paragraph (2): 

12 ‘‘(A) For each such month, the total num13 ber of individuals in the population eligible for 

14 medical assistance under the State plan or 

15 under a waiver of the plan for full benefits (as 

16 defined in section 1905(y)(2)(B)) who were en17 rolled in coverage through an exchange estab18 lished by the State under section 2235 for any 

19 portion of the month. 

20 ‘‘(B) Subject to paragraph (3), for each 

21 such month, the average cost of providing med22 ical assistance for the population under the 

23 State plan or a waiver of the plan for the pre24 ceding year. 


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1 ‘‘(C) For each such month, the State per2 centage applicable under subsection (b) or (y) 

3 of section 1905 to expenditures for providing 

4 medical assistance to individuals within the 

5 population for that month. 

6 ‘‘(2) POPULATIONS DESCRIBED.—The popu7 lations described in this paragraph are the following: 

8 ‘‘(A) Children. 

9 ‘‘(B) Nondisabled, childless adults under 

10 age 65. 

11 ‘‘(C) Nondisabled adults under age 65 who 

12 are parents. 

13 ‘‘(D) Disabled, childless adults under age 

14 65. 

15 ‘‘(E) Disabled adults under age 65 who are 

16 parents. 

17 ‘‘(3) AVERAGE COST OF MEDICAL ASSISTANCE

18 FOR CHILDREN.—With respect to children, the aver19 age cost of providing medical assistance under the 

20 State plan or under a waiver of the plan for the pre21 ceding year shall be equal to the average cost of pro22 viding children under the State plan or waiver essen23 tial benefits described in section 2242 (as defined 

24 and specified by the Secretary for that year in ac25 cordance with subsection (e) of that section).’’. 


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1 SEC. 1622. PERMITTING HOSPITALS TO MAKE PRESUMP2 TIVE ELIGIBILITY DETERMINATIONS FOR 

3 ALL MEDICAID ELIGIBLE POPULATIONS. 

4 (a) IN GENERAL.—Section 1902(a)(47) of the Social 

5 Security Act (42 U.S.C. 1396a(a)(47)) is amended— 

6 (1) by striking ‘‘at the option of the State, pro7 vide’’ and inserting ‘‘provide— 

8 ‘‘(A) at the option of the State,’’; 

9 (2) by inserting ‘‘and’’ after the semicolon; and 

10 (3) by adding at the end the following: 

11 ‘‘(B) that any hospital that is a partici12 pating provider under the State plan may elect 

13 to be a qualified entity for purposes of deter14 mining, on the basis of preliminary information, 

15 whether any individual is eligible for medical as16 sistance under the State plan or under a waiver 

17 of the plan for purposes of providing the indi18 vidual with medical assistance during a pre19 sumptive eligibility period, in the same manner, 

20 and subject to the same requirements, as apply 

21 to the State options with respect to populations 

22 described in section 1920, 1920A, or 1920B 

23 (but without regard to whether the State has 

24 elected to provide for a presumptive eligibility 

25 period under any such sections), subject to such 

26 guidance as the Secretary shall establish;’’. 


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1 (b) CONFORMING AMENDMENT.—Section 

2 1903(u)(1)(D)(v) of such Act (42 U.S.C. 

3 1396b(u)(1)(D)v)) is amended— 

4 (1) by striking ‘‘or for’’ and inserting ‘‘for’’; 

5 and 

6 (2) by inserting before the period at the end the 

7 following: ‘‘, or for medical assistance provided to an 

8 individual during a presumptive eligibility period re9 sulting from a determination of presumptive eligi10 bility made by a hospital that elects under section 

11 1902(a)(47)(B) to be a qualified entity for such pur12 pose’’. 

13 (c) EFFECTIVE DATE.— 

14 (1) Except as provided in paragraph (2), the 

15 amendment made by subsection (a) shall apply to 

16 services furnished on or after January 1, 2014, 

17 without regard to whether or not final regulations to 

18 carry out such amendment have been promulgated 

19 by such date. 

20 (2) In the case of a State plan for medical as21 sistance under title XIX of the Social Security Act 

22 which the Secretary of Health and Human Services 

23 determines requires State legislation (other than leg24 islation appropriating funds) in order for the plan to 

25 meet the additional requirement imposed by the 


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1 amendment made by this section, the State plan 

2 shall not be regarded as failing to comply with the 

3 requirements of such title solely on the basis of its 

4 failure to meet this additional requirement before 

5 the first day of the first calendar quarter beginning 

6 after the close of the first regular session of the 

7 State legislature that begins after the date of the en8 actment of this Act. For purposes of the previous 

9 sentence, in the case of a State that has a 2-year 

10 legislative session, each year of such session shall be 

11 deemed to be a separate regular session of the State 

12 legislature. 

13 SEC. 1623. PROMOTING TRANSPARENCY IN THE DEVELOP14 MENT, IMPLEMENTATION, AND EVALUATION 

15 OF MEDICAID AND CHIP WAIVERS AND SEC16 TION 1937 STATE PLAN AMENDMENTS. 

17 (a) WAIVER TRANSPARENCY.— 

18 (1) IN GENERAL.—Section 1115 of the Social 

19 Security Act (42 U.S.C. 1315) is amended by insert20 ing after subsection (c) the following: 

21 ‘‘(d) In the case of any experimental, pilot, or dem22 onstration project undertaken under subsection (a) to pro23 mote the objectives of title XIX or XXI in a State that 

24 would result in an impact on eligibility, enrollment, bene25 fits, cost-sharing, or financing with respect to a State proVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00309 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 gram under title XIX or XXI (in this subsection referred 

2 to as a ‘Medicaid demonstration project’ and a ‘CHIP 

3 demonstration project’, respectively,) the following shall 

4 apply: 

5 ‘‘(1) The Secretary may not approve a proposal 

6 for a Medicaid demonstration project, CHIP dem7 onstration project, or a renewal of or an amendment 

8 to a previously approved Medicaid demonstration 

9 project or CHIP demonstration project unless the 

10 State requesting approval certifies that the following 

11 process was used to develop the proposal: 

12 ‘‘(A) At least 30 days prior to publication 

13 of the notice required under subparagraph (C), 

14 the State provided notice (which may have been 

15 accomplished by electronic mail) of the State’s 

16 intent to develop the proposal to the medical 

17 care advisory committee established for the 

18 State for purposes of complying with section 

19 1902(a)(4) and any individual or organization 

20 that requests or has requested such notice. 

21 ‘‘(B) Subsequent to providing the notice 

22 required under subparagraph (A) and prior to 

23 the notice required under subparagraph (C), the 

24 State convened at least 1 meeting of such med25 ical care advisory committee at which the proVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00310 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 posal and any modifications of the proposal 

2 were the primary items considered and dis3 cussed. 

4 ‘‘(C) At least 60 days prior to the date 

5 that the State submits the proposal to the Sec6 retary, the State published for written comment 

7 (in accordance with the State’s procedure for 

8 issuing regulations) a notice of the proposal 

9 that contained at least the following: 

10 ‘‘(i) Information regarding how the 

11 public may submit comments to the State 

12 on the proposal. 

13 ‘‘(ii) A statement of the State’s pro14 jections regarding the likely effect and im15 pact of the proposal on any individuals 

16 who are then eligible for, or receiving, 

17 medical assistance, child health assistance, 

18 or other health benefits coverage under a 

19 State program under title XIX or XXI and 

20 the State’s assumptions on which such pro21 jections are based. 

22 ‘‘(iii) A statement of the likely fiscal 

23 impact of the proposal, including all rel24 evant calculations, showing how Federal 

25 and State spending on the project will 


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1 compare to the amount of Federal and 

2 State funds that would have been expended 

3 had the project not been implemented. 

4 ‘‘(D) Concurrent with the publication of 

5 the notice required under subparagraph (C), the 

6 State— 

7 ‘‘(i) posted the proposal (and any 

8 modifications of the proposal) on the 

9 State’s official Medicaid or CHIP Internet 

10 website; and 

11 ‘‘(ii) provided the notice required 

12 under subparagraph (B) (which may have 

13 been accomplished by electronic mail) to 

14 the medical care advisory committee re15 ferred to in subparagraph (A) and to any 

16 individual or organization that requested 

17 such notice. 

18 ‘‘(E) Not later than 30 days after publica19 tion of the notice required under subparagraph 

20 (C), the State convened at least 1 open meeting 

21 of the medical care advisory committee referred 

22 to in subparagraph (A), at which the proposal 

23 and any modifications of the proposal were the 

24 primary items considered and discussed. 


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1 ‘‘(F) After publication of the notice re2 quired under subparagraph (C), the State— 

3 ‘‘(i) held at least 2 public hearings on 

4 the proposal and any modifications of the 

5 proposal; and 

6 ‘‘(ii) held the last such public hearing 

7 no more than 30 days before the State 

8 submitted the proposal to the Secretary. 

9 ‘‘(G) The State has a record of all public 

10 comments submitted in response to the notice 

11 required under subparagraph (B) or at any 

12 hearings or meetings required under this para13 graph regarding the proposal. 

14 ‘‘(2) A State shall include with any proposal 

15 submitted to the Secretary for a Medicaid dem16 onstration project, CHIP demonstration project, or 

17 a renewal of or an amendment to a previously ap18 proved Medicaid demonstration project or CHIP 

19 demonstration project, the following: 

20 ‘‘(A) A detailed description of the public 

21 notice and input process used to develop the 

22 proposal in accordance with the requirements of 

23 paragraph (1). 

24 ‘‘(B) Copies of all notices required under 

25 paragraph (1). 


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1 ‘‘(C) The dates of all meetings and hear2 ings required under paragraph (1). 

3 ‘‘(D) A summary of the public comments 

4 received in response to the notices required 

5 under paragraph (1) or at any hearings or 

6 meetings required under that paragraph regard7 ing the proposal and the State’s response to the 

8 comments. 

9 ‘‘(E) A summary of any changes in the 

10 proposal that were made in response to the 

11 comments. 

12 ‘‘(F) A certification that the State com13 plied with any applicable notification require14 ments with respect to Indian tribes during the 

15 development of the proposal in accordance with 

16 paragraph (1). 

17 ‘‘(3) The Secretary shall return to a State with18 out action any proposal for a Medicaid demonstra19 tion project, CHIP demonstration project, or a re20 newal of or an amendment to a previously approved 

21 Medicaid demonstration project or CHIP demonstra22 tion project, that fails to demonstrate compliance 

23 with the requirements of paragraphs (1) and (2). 

24 ‘‘(4) With respect to all proposals for Medicaid 

25 demonstration projects, CHIP demonstration 


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1 projects, or renewal of or amendments to a pre2 viously approved Medicaid or CHIP demonstration 

3 project, received by the Secretary the following shall 

4 apply: 

5 ‘‘(A) On or before the 10th day of each 

6 month, the Secretary shall publish a notice in 

7 the Federal Register identifying all of the pro8 posals for such demonstration projects or 

9 amendments that were received by the Sec10 retary during the preceding month. 

11 ‘‘(B) The notice required under subpara12 graph (A) shall provide information regarding 

13 the method by which comments on the pro14 posals will be received from the public. 

15 ‘‘(C) Not later than 7 days after receipt of 

16 a proposal for a Medicaid demonstration 

17 project, CHIP demonstration project, or a re18 newal of or an amendment to a previously ap19 proved Medicaid or CHIP demonstration 

20 project, the Secretary shall— 

21 ‘‘(i) provide notice (which may be ac22 complished by electronic mail) to any indi23 vidual or organization that requests or has 

24 requested such notification; 


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1 ‘‘(ii) publish on the official Internet 

2 website of the Centers for Medicare & 

3 Medicaid Services a copy of the proposal, 

4 including any appendices or modifications 

5 of the proposal; and 

6 ‘‘(iii) ensure that the information 

7 posted on the website is updated at least 

8 monthly to accurately reflect the current 

9 nature and status of the proposal. 

10 ‘‘(D) The Secretary shall provide for a pe11 riod of not less than 30 days from the later of 

12 the date of publication of the notice required 

13 under subparagraph (A) that first identifies re14 ceipt of the proposal or the date on which an 

15 official Internet website containing the informa16 tion required under subparagraph (C)(ii) with 

17 respect to the proposal is first published, in 

18 which written comments on the proposal may be 

19 submitted from all interested parties. 

20 ‘‘(E) After the completion of the public 

21 comment period required under subparagraph 

22 (D), if the Secretary intends to approve the 

23 proposal, as originally submitted or revised, the 

24 Secretary shall— 


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1 ‘‘(i) publish and post on the official 

2 Internet website for the Centers for Medi3 care & Medicaid Services the proposed 

4 terms and conditions for such approval and 

5 updated versions of the statements re6 quired to be published by the State under 

7 clauses (ii) and (iii) of paragraph (1)(C); 

8 ‘‘(ii) provide at least a 15-day period 

9 for the submission of written comments 

10 from all interested parties on such pro11 posed terms and conditions and such state12 ments; and 

13 ‘‘(iii) retain, and make available upon 

14 request, all comments received concerning 

15 the proposal, the terms and conditions for 

16 approval of the proposal, or the statements 

17 required to be published by the State 

18 under clauses (ii) and (iii) of paragraph 

19 (1)(C). 

20 ‘‘(F) In no event may the Secretary ap21 prove a proposal for a Medicaid or CHIP dem22 onstration project or renewal of or an amend23 ment to a previously approved Medicaid or 

24 CHIP demonstration project unless the SecVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00317 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 retary determines that the proposal, renewal, or 

2 the amendment— 

3 ‘‘(i) is based on a reasonable hypoth4 esis which the Secretary has determined is 

5 likely to assist in promoting the objectives 

6 of title XIX or XXI; and 

7 ‘‘(ii) will be evaluated no less fre8 quently than every 3 years in accordance 

9 with paragraph (6). 

10 ‘‘(G) Not later than 3 business days after 

11 the approval of any proposal for a Medicaid 

12 demonstration project, CHIP demonstration 

13 project, or renewal of or amendment to a pre14 viously approved Medicaid or CHIP demonstra15 tion project, the Secretary shall post on the of16 ficial Internet website for the Centers for Medi17 care & Medicaid Services the following: 

18 ‘‘(i) The text of the approved Med19 icaid demonstration project, CHIP dem20 onstration project, or renewal of or amend21 ment to a previously approved Medicaid or 

22 CHIP demonstration project. 

23 ‘‘(ii) A list identifying each provision 

24 of title XIX or XXI, and each regulation 

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1 pliance is waived under the approved dem2 onstration project or amendment and any 

3 costs that would otherwise not be per4 mitted that will be allowed under the dem5 onstration project or amendment. 

6 ‘‘(iii) The terms and conditions for 

7 approval of the demonstration project or 

8 amendment. 

9 ‘‘(iv) The approval letter. 

10 ‘‘(v) The operations protocol for the 

11 demonstration project or amendment. 

12 ‘‘(vi) The evaluation design for the 

13 demonstration project or amendment. 

14 ‘‘(vii) Any item required to be posted 

15 under this subparagraph that is not avail16 able within 3 business days of the approval 

17 of the demonstration project or amend18 ment shall be posted as soon as the item 

19 becomes available, 

20 ‘‘(H) On or before the 10th day of each 

21 month the Secretary shall publish a notice in 

22 the Federal Register that identifies any pro23 posals for Medicaid demonstration projects, 

24 CHIP demonstration projects, or renewal of or 

25 amendments to a previously approved Medicaid 


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1 or CHIP demonstration project that were ap2 proved, denied, or returned to the State without 

3 action during the preceding month. 

4 ‘‘(I) The Secretary shall post on the offi5 cial Internet website for the Centers for Medi6 care and Medicaid Services all quarterly reports 

7 submitted by the State (including data on 

8 whether the State is meeting its budget neu9 trality targets), evaluations, and other informa10 tion the Secretary determines to be appropriate, 

11 on Medicaid or CHIP demonstration projects 

12 that are operational. 

13 ‘‘(5) Any provision under title XIX or XXI, or 

14 under any regulation in effect that relates to either 

15 such title, that is not explicitly waived by the Sec16 retary and identified in the list required under para17 graph (4)(G)(ii) when approving the Medicaid dem18 onstration project, CHIP demonstration project, or 

19 renewal of or amendment to any such demonstration 

20 project, is not waived and a State shall continue to 

21 comply with any such requirement. 

22 ‘‘(6)(A) In the case of a proposal for a Med23 icaid demonstration project or CHIP demonstration 

24 project, the Secretary shall, by contract with a quali25 fied research organization described in subparagraph 


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1 (B), conduct an independent evaluation consistent 

2 with the evaluation criteria described in subpara3 graph (C) applicable to the individual project. 

4 ‘‘(B) A qualified research organization de5 scribed in this subparagraph is an entity that the 

6 Secretary determines— 

7 ‘‘(i) has staff with demonstrated expertise 

8 regarding Medicaid or CHIP beneficiaries, poli9 cies, and data systems (as applicable), and re10 search design and methodology; and 

11 ‘‘(ii) does not and did not in the past 24 

12 months, by contract or subcontract, directly or 

13 indirectly, receive funds from the State that has 

14 proposed the demonstration project. 

15 ‘‘(C) The evaluation criteria described in this 

16 subparagraph shall include, but not be limited to, 

17 the following: 

18 ‘‘(i) The use of services by beneficiaries 

19 under the project. 

20 ‘‘(ii) The amount of out-of-pocket costs for 

21 health care services incurred by beneficiaries 

22 under the project. 

23 ‘‘(iii) The extent to which special popu24 lations such as adults with disabilities, adults 

25 with chronic illness, and children with special 


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1 health care needs are able to access needed 

2 health care services. 

3 ‘‘(iv) If children are enrolled in the project, 

4 the extent to which such children are able to ac5 cess early and periodic screening, diagnostic, 

6 and treatment services described in section 

7 1905(r). 

8 ‘‘(v) The level of satisfaction of bene9 ficiaries under the project with respect to the 

10 accessibility, quality, and cost of care, including 

11 the extent to which beneficiaries under the 

12 project understand the choices of health care 

13 coverage available to them. 

14 ‘‘(vi) The cost of health care services in15 curred by the State agency administering the 

16 project, whether through fee-for-service pay17 ments, premium payments, or otherwise. 

18 ‘‘(vii) Administrative costs incurred by the 

19 State agency administering the project and by 

20 any administrative contractors. 

21 ‘‘(D) The Secretary shall not approve a pro22 posal for a Medicaid demonstration project or a 

23 CHIP demonstration project, or a proposal for the 

24 extension of such a demonstration project, unless the 

25 State agency proposing to administer the demonstraVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00322 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tion project agrees to cooperate fully with the Sec2 retary to the extent necessary to enable the Sec3 retary to conduct the independent evaluation de4 scribed in subparagraph (B) including collecting, 

5 verifying the accuracy of, and submitting to the or6 ganization on a timely basis data needed to conduct 

7 the independent evaluation. 

8 ‘‘(E) The State agency administering the 

9 project shall be allowed at least 30 days prior to 

10 publication of the independent evaluation to submit 

11 comments to the Secretary, and the State agency’s 

12 comments shall be included in the results of the 

13 evaluation. 

14 ‘‘(F) The results of all evaluations conducted 

15 under this paragraph with respect to a Medicaid 

16 demonstration project or CHIP demonstration 

17 project shall be submitted to the Committee on Fi18 nance of the Senate and the Committee on Energy 

19 and Commerce of the House of Representatives not 

20 later than 6 months prior to the completion of the 

21 initial term of a demonstration project and shall 

22 thereafter be posted on the official Internet website 

23 of the Centers for Medicare & Medicaid Services. 

24 ‘‘(G) Out of any money in the Treasury of the 

25 United States not otherwise appropriated, there are 


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1 appropriated to the Secretary, $4,500,000 for fiscal 

2 year 2010 and each fiscal year thereafter, for the 

3 purpose of carrying out the independent evaluations 

4 required under this paragraph. Amounts appro5 priated under this subparagraph for a fiscal year 

6 shall remain available until expended.’’. 

7 (2) RULE OF CONSTRUCTION.—Nothing in the 

8 amendment made by subsection (a) shall be con9 strued to— 

10 (A) authorize the waiver of any provision 

11 of title XIX or XXI of the Social Security Act 

12 (42 U.S.C. 1396 et seq., 1397aa et seq.) that 

13 is not otherwise authorized to be waived under 

14 such titles or under title XI of such Act (42 

15 U.S.C. 1301 et seq.) as of the date of enact16 ment of this Act; or 

17 (B) imply congressional approval of any 

18 experimental, pilot, or demonstration project af19 fecting the Medicaid program under title XIX 

20 of the Social Security Act or the Children’s 

21 health insurance program under title XXI of 

22 such Act that has been approved as of such 

23 date of enactment. 


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1 (b) TRANSPARENCY FOR CERTAIN STATE PLAN

2 AMENDMENTS.—Section 1937 of such Act (42 U.S.C. 

3 1396u–7) is amended by adding at the end the following: 

4 ‘‘(d) STATE PLAN AMENDMENT APPROVAL RE5 QUIREMENTS.—In the case of any State plan amendment 

6 proposed under subsection (a) that would limit the bene7 fits eligible individuals would receive, the following shall 

8 apply: 

9 ‘‘(1) The Secretary may not approve a proposal 

10 for the amendment unless the State requesting ap11 proval certifies that the following process was used 

12 to develop the amendment: 

13 ‘‘(A) Prior to publication of the notice re14 quired under subparagraph (B), the State— 

15 ‘‘(i) provided notice (which may have 

16 been accomplished by electronic mail) of 

17 the State’s intent to develop the State plan 

18 amendment to the medical care advisory 

19 committee established for the State for 

20 purposes of complying with section 

21 1902(a)(4) and any individual or organiza22 tion that requests such notice; and 

23 ‘‘(ii) convened at least 1 meeting of 

24 such medical care advisory committee at 


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1 which the State plan amendment was con2 sidered and discussed. 

3 ‘‘(B) At least 60 days prior to the date 

4 that the State submits the State plan amend5 ment to the Secretary, the State published for 

6 written comment (in accordance with the 

7 State’s procedure for issuing regulations) a no8 tice of the proposal that contains at least the 

9 following: 

10 ‘‘(i) Information regarding how the 

11 public may submit comments to the State 

12 on the State plan amendment. 

13 ‘‘(ii) A statement of the State’s pro14 jections regarding the likely effect and im15 pact of the proposal on any individuals 

16 who are eligible for, or receiving, medical 

17 assistance, under the State program under 

18 this title and the State’s assumptions on 

19 which the projections are based. 

20 ‘‘(C) Concurrent with the publication of 

21 the notice required under subparagraph (B), 

22 the State— 

23 ‘‘(i) posted the State plan amendment 

24 on the State’s official Medicaid or CHIP 

25 Internet website; and 


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1 ‘‘(ii) provided the notice (which may 

2 have been accomplished by electronic mail) 

3 to the medical care advisory committee re4 ferred to in subparagraph (A)(i) and to 

5 any individual or organization that re6 quested such notice. 

7 ‘‘(D) Not later than 30 days after publica8 tion of the notice required under subparagraph 

9 (B), the State convened at least 1 open meeting 

10 of the medical care advisory committee referred 

11 to in subparagraph (A)(i), at which the State 

12 plan amendment was considered and discussed. 

13 ‘‘(2) A State shall include with any State plan 

14 amendment submitted to the Secretary for approval 

15 the following: 

16 ‘‘(A) A detailed description of the public 

17 notice and input process used to develop the 

18 State plan amendment in accordance with the 

19 requirements of paragraph (1). 

20 ‘‘(B) Copies of all notices required under 

21 paragraph (1). 

22 ‘‘(C) The dates of all meetings required 

23 under paragraph (1). 

24 ‘‘(D) A certification that the State com25 plied with any applicable notification requireVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00327 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ments with respect to Indian tribes during the 

2 development of the proposal in accordance with 

3 paragraph (1). 

4 ‘‘(3) The Secretary shall return to a State with5 out action any State plan amendment that fails to 

6 satisfy the requirements of paragraphs (1) and (2). 

7 ‘‘(4) With respect to all State plan amendments 

8 submitted for approval to the Secretary under this 

9 section the following shall apply: 

10 ‘‘(A) On or before the 10th day of each 

11 month the Secretary shall publish a notice in 

12 the Federal Register identifying all the State 

13 plan amendments submitted for approval dur14 ing the preceding month. 

15 ‘‘(B) The notice required under subpara16 graph (A) shall provide information regarding 

17 the method by which comments on the pro18 posals will be received from the public. 

19 ‘‘(C) Not later than 7 days after submis20 sion of a State plan amendment for approval 

21 the Secretary shall— 

22 ‘‘(i) provide notice (which may be ac23 complished by electronic mail) to any indi24 vidual or organization that has requested 

25 such notification; and 


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1 ‘‘(ii) publish on the official Internet 

2 website of the Centers for Medicare & 

3 Medicaid Services a copy of the State plan 

4 amendment. 

5 ‘‘(D) The Secretary shall provide for a pe6 riod of not less than 30 days from the later of 

7 the date of publication of the notice required 

8 under subparagraph (A) that first identifies re9 ceipt of the State plan amendment or the date 

10 on which an official Internet website containing 

11 the information required under subparagraph 

12 (C)(ii) with respect to the State plan amend13 ment is first published, in which written com14 ments on the State plan amendment may be 

15 submitted from all interested parties. 

16 ‘‘(E) On or before the 10th day of each 

17 month the Secretary shall publish a notice in 

18 the Federal Register that identifies any State 

19 plan amendments that were approved, denied, 

20 or returned to the State without action during 

21 the preceding month.’’. 

22 (c) EFFECTIVE DATES.— 

23 (1) SECTION 1115 REQUIREMENTS.—Subject to 

24 paragraph (2), the amendment made by subsection 


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1 (a) shall take effect on the date of enactment of this 

2 Act and shall apply to— 

3 (A) any proposal to conduct any experi4 mental, pilot or demonstration project affecting 

5 the Medicaid program under title XIX of the 

6 Social Security Act or the State Children’s 

7 Health Insurance Program under title XXI of 

8 such Act that is pending on the date of enact9 ment or that is submitted to the Secretary after 

10 the date of enactment; 

11 (B) any proposal to extend such a project 

12 that is pending on the date of enactment or 

13 that is submitted to the Secretary after the 

14 date of enactment; and 

15 (C) any proposal to amend such a project 

16 that is pending on the date of enactment or 

17 that is submitted to the Secretary after the 

18 date of enactment. 

19 (2) EVALUATION REQUIREMENTS APPLICABLE

20 TO NEW WAIVERS.—The requirements of section 

21 1115(d)(6) of the Social Security Act (relating to 

22 evaluation), as added by subsection (a), shall apply 

23 only to a proposal described in paragraph (1)(A) of 

24 this subsection. 


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1 (3) CERTAIN STATE PLAN AMENDMENTS.—The 

2 amendment made by subsection (b) shall take effect 

3 on the date of enactment of this Act and shall apply 

4 to any State plan amendment for which approval is 

5 pending on the date of enactment or that is sub6 mitted to the Secretary of Health and Human Serv7 ices for approval after the date of enactment of this 

8 Act. 

9 SEC. 1624. STANDARDS AND BEST PRACTICES TO IMPROVE 

10 ENROLLMENT OF VULNERABLE AND UNDER11 SERVED POPULATIONS. 

12 (a) IN GENERAL.—Not later than April 1, 2011, the 

13 Secretary of Health and Human Services shall issue guid14 ance to States regarding standards and best practices for 

15 conducting outreach to and enrolling vulnerable and un16 derserved populations eligible for medical assistance under 

17 Medicaid under title XIX of the Social Security Act or 

18 for child health assistance under CHIP under title XXI 

19 of such Act, including children, unaccompanied homeless 

20 youth, children and youth with special health care needs, 

21 pregnant women, racial and ethnic minorities, rural popu22 lations, victims of abuse or trauma, individuals with men23 tal health or substance-related disorders, and individuals 

24 with HIV/AIDS. 

25 (b) REQUIREMENTS.— 


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1 (1) IN GENERAL.—The guidance issued under 

2 subsection (a) shall— 

3 (A) detail effective ways to inform vulner4 able populations about coverage available under 

5 Medicaid and CHIP; 

6 (B) identify ways to assist vulnerable pop7 ulations to enroll in the programs; 

8 (C) identify ways that application and en9 rollment barriers for such populations can be 

10 eliminated; and 

11 (D) address specific methods for outreach 

12 and enrollment, including outstationing of eligi13 bility workers, the Express Lane eligibility op14 tion, residency requirements, documentation of 

15 income and assets, presumptive eligibility, con16 tinuous eligibility, and automatic renewal. 

17 (2) DEVELOPMENT AND IMPLEMENTATION.— 

18 The Secretary of Health and Human Services may 

19 use all available legal authority and shall work with 

20 appropriate stakeholders, including representatives 

21 of States and children’s groups, to ensure that the 

22 guidance issued under subsection (a) is developed 

23 and implemented effectively. 

24 (3) REPORT TO CONGRESS.—Not later than 2 

25 years after the enactment of this Act and annually 


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1 thereafter, the Secretary of Health and Human 

2 Services shall review and report to Congress on the 

3 progress made by States in implementing the stand4 ards and best practices identified in the guidance 

5 issued under subsection (a) and increasing the en6 rollment of vulnerable populations under Medicaid 

7 and CHIP. 

8 PART IV—MEDICAID SERVICES 

9 SEC. 1631. COVERAGE FOR FREESTANDING BIRTH CENTER 

10 SERVICES. 

11 (a) IN GENERAL.—Section 1905 of the Social Secu12 rity Act (42 U.S.C. 1396d), is amended— 

13 (1) in subsection (a)— 

14 (A) in paragraph (27), by striking ‘‘and’’ 

15 at the end; 

16 (B) by redesignating paragraph (28) as 

17 paragraph (29); and 

18 (C) by inserting after paragraph (27) the 

19 following new paragraph: 

20 ‘‘(28) freestanding birth center services (as de21 fined in subsection (l)(3)(A)) and other ambulatory 

22 services that are offered by a freestanding birth cen23 ter (as defined in subsection (l)(3)(B)) and that are 

24 otherwise included in the plan; and’’; and 


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1 (2) in subsection (l), by adding at the end the 

2 following new paragraph: 

3 ‘‘(3)(A) The term ‘freestanding birth center services’ 

4 means services furnished to an individual at a freestanding 

5 birth center (as defined in subparagraph (B)) at such cen6 ter. 

7 ‘‘(B) The term ‘freestanding birth center’ means a 

8 health facility— 

9 ‘‘(i) that is not a hospital; 

10 ‘‘(ii) where childbirth is planned to occur away 

11 from the pregnant woman’s residence; 

12 ‘‘(iii) that is licensed or otherwise approved by 

13 the State to provide prenatal labor and delivery or 

14 postpartum care and other ambulatory services that 

15 are included in the plan; and 

16 ‘‘(iv) that complies with such other require17 ments relating to the health and safety of individuals 

18 furnished services by the facility as the State shall 

19 establish. 

20 ‘‘(C) A State shall provide separate payments to pro21 viders administering prenatal labor and delivery or 

22 postpartum care in a freestanding birth center (as defined 

23 in subparagraph (B)), such as nurse midwives and other 

24 providers of services such as birth attendants recognized 

25 under State law, as determined appropriate by the SecVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00334 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 retary. For purposes of the preceding sentence, the term 

2 ‘birth attendant’ means an individual who is recognized 

3 or registered by the State involved to provide health care 

4 at childbirth and who provides such care within the scope 

5 of practice under which the individual is legally authorized 

6 to perform such care under State law (or the State regu7 latory mechanism provided by State law), regardless of 

8 whether the individual is under the supervision of, or asso9 ciated with, a physician or other health care provider. 

10 Nothing in this subparagraph shall be construed as chang11 ing State law requirements applicable to a birth attend12 ant.’’. 

13 (b) CONFORMING AMENDMENT.—Section 

14 1902(a)(10)(A) of the Social Security Act (42 U.S.C. 

15 1396a(a)(10)(A)), is amended in the matter preceding 

16 clause (i) by striking ‘‘and (21)’’ and inserting ‘‘, (21), 

17 and (28)’’. 

18 (c) EFFECTIVE DATE.— 

19 (1) IN GENERAL.—Except as provided in para20 graph (2), the amendments made by this section 

21 shall take effect on the date of the enactment of this 

22 Act and shall apply to services furnished on or after 

23 such date. 

24 (2) EXCEPTION IF STATE LEGISLATION RE25 QUIRED.—In the case of a State plan for medical asVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00335 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 sistance under title XIX of the Social Security Act 

2 which the Secretary of Health and Human Services 

3 determines requires State legislation (other than leg4 islation appropriating funds) in order for the plan to 

5 meet the additional requirement imposed by the 

6 amendments made by this section, the State plan 

7 shall not be regarded as failing to comply with the 

8 requirements of such title solely on the basis of its 

9 failure to meet this additional requirement before 

10 the first day of the first calendar quarter beginning 

11 after the close of the first regular session of the 

12 State legislature that begins after the date of the en13 actment of this Act. For purposes of the previous 

14 sentence, in the case of a State that has a 2-year 

15 legislative session, each year of such session shall be 

16 deemed to be a separate regular session of the State 

17 legislature. 

18 SEC. 1632. CONCURRENT CARE FOR CHILDREN. 

19 Section 1905(o)(1) of the Social Security Act (42 

20 U.S.C. 1396d(o)(1)) is amended— 

21 (1) in subparagraph (A), by striking ‘‘subpara22 graph (B)’’ and inserting ‘‘subparagraphs (B) and 

23 (C)’’; and 

24 (2) by adding at the end the following new sub25 paragraph: 


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1 ‘‘(C) A voluntary election to have payment made for 

2 hospice care for a child (as defined by the State) shall 

3 not constitute a waiver of any rights of the child to be 

4 provided with, or to have payment made under this title 

5 for, services that are related to the treatment of the child’s 

6 condition for which a diagnosis of terminal illness has been 

7 made.’’. 

8 SEC. 1633. FUNDING TO EXPAND STATE AGING AND DIS9 ABILITY RESOURCE CENTERS. 

10 Out of any funds in the Treasury not otherwise ap11 propriated, there is appropriated to the Secretary of 

12 Health and Human Services, acting through the Assistant 

13 Secretary for Aging, $10,000,000 for each of fiscal years 

14 2010 through 2014, to carry out subsections 

15 (a)(20)(B)(iii) and (b)(8) of section 202 of the Older 

16 Americans Act of 1965 (42 U.S.C. 3012). 

17 SEC. 1634. COMMUNITY FIRST CHOICE OPTION. 

18 Section 1915 of the Social Security Act (42 U.S.C. 

19 1396n) is amended by adding at the end the following: 

20 ‘‘(k) STATE PLAN OPTION TO PROVIDE HOME AND

21 COMMUNITY-BASED ATTENDANT SERVICES AND SUP22 PORTS.— 

23 ‘‘(1) IN GENERAL.—Subject to the succeeding 

24 provisions of this subsection, during the 5-year pe25 riod that begins on January 1, 2014, a State may 


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1 provide through a State plan amendment for the 

2 provision of medical assistance for home and com3 munity-based attendant services and supports for in4 dividuals who are eligible for medical assistance 

5 under the State plan whose income does not exceed 

6 150 percent of the poverty line (as defined in section 

7 2110(c)(5)) or, if greater, the income level applicable 

8 for an individual who has been determined to require 

9 an institutional level of care to be eligible for nurs10 ing facility services under the State plan and with 

11 respect to whom there has been a determination 

12 that, but for the provision of such services, the indi13 viduals would require the level of care provided in a 

14 hospital, a nursing facility, an intermediate care fa15 cility for the mentally retarded, or an institution for 

16 mental diseases, the cost of which could be reim17 bursed under the State plan, but only if the indi18 vidual chooses to receive such home and community19 based attendant services and supports, and only if 

20 the State meets the following requirements: 

21 ‘‘(A) AVAILABILITY.—The State shall 

22 make available home and community-based at23 tendant services and supports to eligible indi24 viduals, as needed, to assist in accomplishing 

25 activities of daily living, instrumental activities 


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1 of daily living, and health-related tasks through 

2 hands-on assistance, supervision, or cueing— 

3 ‘‘(i) under a person-centered plan of 

4 services and supports that is based on an 

5 assessment of functional need and that is 

6 agreed to in writing by the individual or, 

7 as appropriate, the individual’s representa8 tive; 

9 ‘‘(ii) in a home or community setting, 

10 which does not include a nursing facility, 

11 institution for mental diseases, or an inter12 mediate care facility for the mentally re13 tarded; 

14 ‘‘(iii) under an agency-provider model 

15 or other model (as defined in paragraph 

16 (6)(C )); and 

17 ‘‘(iv) the furnishing of which— 

18 ‘‘(I) is selected, managed, and 

19 dismissed by the individual, or, as ap20 propriate, with assistance from the in21 dividual’s representative; 

22 ‘‘(II) is controlled, to the max23 imum extent possible, by the indi24 vidual or where appropriate, the indi25 vidual’s representative, regardless of 


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1 who may act as the employer of 

2 record; and 

3 ‘‘(III) provided by an individual 

4 who is qualified to provide such serv5 ices, including family members (as de6 fined by the Secretary). 

7 ‘‘(B) INCLUDED SERVICES AND SUP8 PORTS.—In addition to assistance in accom9 plishing activities of daily living, instrumental 

10 activities of daily living, and health related 

11 tasks, the home and community-based attend12 ant services and supports made available in13 clude— 

14 ‘‘(i) the acquisition, maintenance, and 

15 enhancement of skills necessary for the in16 dividual to accomplish activities of daily 

17 living, instrumental activities of daily liv18 ing, and health related tasks; 

19 ‘‘(ii) back-up systems or mechanisms 

20 (such as the use of beepers or other elec21 tronic devices) to ensure continuity of serv22 ices and supports; and 

23 ‘‘(iii) voluntary training on how to se24 lect, manage, and dismiss attendants. 


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1 ‘‘(C) EXCLUDED SERVICES AND SUP2 PORTS.—Subject to subparagraph (D), the 

3 home and community-based attendant services 

4 and supports made available do not include— 

5 ‘‘(i) room and board costs for the in6 dividual; 

7 ‘‘(ii) special education and related 

8 services provided under the Individuals 

9 with Disabilities Education Act and voca10 tional rehabilitation services provided 

11 under the Rehabilitation Act of 1973; 

12 ‘‘(iii) assistive technology devices and 

13 assistive technology services other than 

14 those under (1)(B)(ii); 

15 ‘‘(iv) medical supplies and equipment; 

16 or 

17 ‘‘(v) home modifications. 

18 ‘‘(D) PERMISSIBLE SERVICES AND SUP19 PORTS.—The home and community-based at20 tendant services and supports may include— 

21 ‘‘(i) expenditures for transition costs 

22 such as rent and utility deposits, first 

23 month’s rent and utilities, bedding, basic 

24 kitchen supplies, and other necessities re25 quired for an individual to make the tranVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00341 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 sition from a nursing facility, institution 

2 for mental diseases, or intermediate care 

3 facility for the mentally retarded to a com4 munity-based home setting where the indi5 vidual resides; and 

6 ‘‘(ii) expenditures relating to a need 

7 identified in an individual’s person-cen8 tered plan of services that increase inde9 pendence or substitute for human assist10 ance, to the extent that expenditures would 

11 otherwise be made for the human assist12 ance. 

13 ‘‘(2) INCREASED FEDERAL FINANCIAL PARTICI14 PATION.—For purposes of payments to a State 

15 under section 1903(a)(1), with respect to amounts 

16 expended by the State to provide medical assistance 

17 under the State plan for home and community-based 

18 attendant services and supports to eligible individ19 uals in accordance with this subsection during a fis20 cal year quarter occurring during the period de21 scribed in paragraph (1), the Federal medical assist22 ance percentage applicable to the State (as deter23 mined under sections 1905(b) and 1902(gg)(5)) 

24 shall be increased by 6 percentage points. 


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1 ‘‘(3) STATE REQUIREMENTS.—In order for a 

2 State plan amendment to be approved under this 

3 subsection, the State shall— 

4 ‘‘(A) develop and implement such amend5 ment in collaboration with a Development and 

6 Implementation Council established by the 

7 State that includes a majority of members with 

8 disabilities, elderly individuals, and their rep9 resentatives and consults and collaborates with 

10 such individuals; 

11 ‘‘(B) provide consumer controlled home 

12 and community-based attendant services and 

13 supports to individuals on a statewide basis, in 

14 a manner that provides such services and sup15 ports in the most integrated setting appropriate 

16 to the individual’s needs, and without regard to 

17 the individual’s age, type or nature of disability, 

18 severity of disability, or the form of home and 

19 community-based attendant services and sup20 ports that the individual requires in order to 

21 lead an independent life; 

22 ‘‘(C) with respect to expenditures during 

23 the first full fiscal year in which the State plan 

24 amendment is implemented, maintain or exceed 

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1 sistance that is provided under section 1905(a), 

2 section 1915, section 1115, or otherwise to indi3 viduals with disabilities or elderly individuals 

4 attributable to the preceding fiscal year; 

5 ‘‘(D) establish and maintain a comprehen6 sive, continuous quality assurance system with 

7 respect to community- based attendant services 

8 and supports that— 

9 ‘‘(i) includes standards for agency10 based and other delivery models with re11 spect to training, appeals for denials and 

12 reconsideration procedures of an individual 

13 plan, and other factors as determined by 

14 the Secretary; 

15 ‘‘(ii) incorporates feedback from con16 sumers and their representatives, disability 

17 organizations, providers, families of dis18 abled or elderly individuals, members of 

19 the community, and others and maximizes 

20 consumer independence and consumer con21 trol; 

22 ‘‘(iii) monitors the health and well23 being of each individual who receives home 

24 and community-based attendant services 

25 and supports, including a process for the 


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1 mandatory reporting, investigation, and 

2 resolution of allegations of neglect, abuse, 

3 or exploitation in connection with the pro4 vision of such services and supports; and 

5 ‘‘(iv) provides information about the 

6 provisions of the quality assurance re7 quired under clauses (i) through (iii) to 

8 each individual receiving such services; and 

9 ‘‘(E) collect and report information, as de10 termined necessary by the Secretary, for the 

11 purposes of approving the State plan amend12 ment, providing Federal oversight, and con13 ducting an evaluation under paragraph (5)(A), 

14 including data regarding how the State provides 

15 home and community-based attendant services 

16 and supports and other home and community17 based services, the cost of such services and 

18 supports, and how the State provides individ19 uals with disabilities who otherwise qualify for 

20 institutional care under the State plan or under 

21 a waiver the choice to instead receive home and 

22 community-based services in lieu of institutional 

23 care. 

24 ‘‘(4) COMPLIANCE WITH CERTAIN LAWS.—A 

25 State shall ensure that, regardless of whether the 


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1 State uses an agency-provider model or other models 

2 to provide home and community-based attendant 

3 services and supports under a State plan amend4 ment under this subsection, such services and sup5 ports are provided in accordance with the require6 ments of the Fair Labor Standards Act of 1938 and 

7 applicable Federal and State laws regarding— 

8 ‘‘(A) withholding and payment of Federal 

9 and State income and payroll taxes; 

10 ‘‘(B) the provision of unemployment and 

11 workers compensation insurance; 

12 ‘‘(C) maintenance of general liability insur13 ance; and 

14 ‘‘(D) occupational health and safety. 

15 ‘‘(5) EVALUATION, DATA COLLECTION, AND RE16 PORT TO CONGRESS.— 

17 ‘‘(A) EVALUATION.—The Secretary shall 

18 conduct an evaluation of the provision of home 

19 and community-based attendant services and 

20 supports under this subsection in order to de21 termine the effectiveness of the provision of 

22 such services and supports in allowing the indi23 viduals receiving such services and supports to 

24 lead an independent life to the maximum extent 

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1 tional health of the individuals who receive such 

2 services; and an comparative analysis of the 

3 costs of services provided under the State plan 

4 amendment under this subsection and those 

5 provided under institutional care in a nursing 

6 facility, institution for mental diseases, or an 

7 intermediate care facility for the mentally re8 tarded. 

9 ‘‘(B) DATA COLLECTION.—The State shall 

10 provide the Secretary with the following infor11 mation regarding the provision of home and 

12 community-based attendant services and sup13 ports under this subsection for each fiscal year 

14 for which such services and supports are pro15 vided: 

16 ‘‘(i) The number of individuals who 

17 are estimated to receive home and commu18 nity-based attendant services and supports 

19 under this subsection during the fiscal 

20 year. 

21 ‘‘(ii) The number of individuals that 

22 received such services and supports during 

23 the preceding fiscal year. 

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1 der, education level, and employment sta2 tus. 

3 ‘‘(iv) Whether the specific individuals 

4 have been previously served under any 

5 other home and community based services 

6 program under the State plan or under a 

7 waiver. 

8 ‘‘(C) REPORTS.—Not later than— 

9 ‘‘(i) December 31, 2017, the Sec10 retary shall submit to Congress and make 

11 available to the public an interim report on 

12 the findings of the evaluation under sub13 paragraph (A); and 

14 ‘‘(ii) December 31, 2019, the Sec15 retary shall submit to Congress and make 

16 available to the public a final report on the 

17 findings of the evaluation under subpara18 graph (A). 

19 ‘‘(6) DEFINITIONS.—In this subsection: 

20 ‘‘(A) ACTIVITIES OF DAILY LIVING.—The 

21 term ‘activities of daily living’ includes tasks 

22 such as eating, toileting, grooming, dressing, 

23 bathing, and transferring. 

24 ‘‘(B) CONSUMER CONTROLLED.—The term 

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1 ing and providing services and supports that 

2 allow the individual, or where appropriate, the 

3 individual’s representative, maximum control of 

4 the home and community-based attendant serv5 ices and supports, regardless of who acts as the 

6 employer of record. 

7 ‘‘(C) DELIVERY MODELS.— 

8 ‘‘(i) AGENCY-PROVIDER MODEL.—The 

9 term ‘agency-provider model’ means, with 

10 respect to the provision of home and com11 munity-based attendant services and sup12 ports for an individual, subject to para13 graph (4), a method of providing consumer 

14 controlled services and supports under 

15 which entities contract for the provision of 

16 such services and supports. 

17 ‘‘(ii) OTHER MODELS.—The term 

18 ‘other models’ means, subject to paragraph 

19 (4), methods, other than an agency-pro20 vider model, for the provision of consumer 

21 controlled services and supports. Such 

22 models may include the provision of vouch23 ers, direct cash payments, or use of a fiscal 

24 agent to assist in obtaining services. 


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1 ‘‘(D) HEALTH-RELATED TASKS.—The 

2 term ‘health-related tasks’ means specific tasks 

3 related to the needs of an individual, which can 

4 be delegated or assigned by licensed health-care 

5 professionals under State law to be performed 

6 by an attendant. 

7 ‘‘(E) INDIVIDUAL’S REPRESENTATIVE.— 

8 The term ‘individual’s representative’ means a 

9 parent, family member, guardian, advocate, or 

10 other authorized representative of an individual 

11 ‘‘(F) INSTRUMENTAL ACTIVITIES OF DAILY

12 LIVING.—The term ‘instrumental activities of 

13 daily living’ includes (but is not limited to) meal 

14 planning and preparation, managing finances, 

15 shopping for food, clothing, and other essential 

16 items, performing essential household chores, 

17 communicating by phone or other media, and 

18 traveling around and participating in the com19 munity.’’. 

20 SEC. 1635. PROTECTION FOR RECIPIENTS OF HOME AND 

21 COMMUNITY-BASED SERVICES AGAINST 

22 SPOUSAL IMPOVERISHMENT. 

23 During the 5-year period that begins on January 1, 

24 2014, section 1924(h)(1)(A) of the Social Security Act (42 

25 U.S.C. 1396r–5(h)(1)(A)) shall be applied as though ‘‘is 


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1 eligible for medical assistance for home and community2 based services provided under subsection (c), (d), or (i) 

3 of section 1915, under a waiver approved under section 

4 1115, or who is eligible for such medical assistance by rea5 son of being determined eligible under section 

6 1902(a)(10)(C) or by reason of section 1902(f) or other7 wise on the basis of a reduction of income based on costs 

8 incurred for medical or other remedial care, or who is eligi9 ble for medical assistance for home and community-based 

10 attendant services and supports under section 1915(k)’’ 

11 were substituted in such section for ‘‘(at the option of the 

12 State) is described in section 1902(a)(10)(A)(ii)(VI)’’. 

13 SEC. 1636. INCENTIVES FOR STATES TO OFFER HOME AND 

14 COMMUNITY-BASED SERVICES AS A LONG15 TERM CARE ALTERNATIVE TO NURSING 

16 HOMES. 

17 (a) STATE BALANCING INCENTIVE PAYMENTS PRO18 GRAM.—Notwithstanding section 1905(b) of the Social Se19 curity Act (42 U.S.C. 1396d(b)), in the case of a bal20 ancing incentive payment State, as defined in subsection 

21 (b), that meets the conditions described in subsection (c), 

22 during the balancing incentive period, the Federal medical 

23 assistance percentage determined for the State under sec24 tion 1905(b) of such Act and increased under section 

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1 age points determined under subsection (d) with respect 

2 to eligible medical assistance expenditures described in 

3 subsection (e). 

4 (b) BALANCING INCENTIVE PAYMENT STATE.—A 

5 balancing incentive payment State is a State— 

6 (1) in which less than 50 percent of the total 

7 expenditures for medical assistance under the State 

8 Medicaid program for fiscal year 2009 for long-term 

9 services and supports (as defined by the Secretary 

10 under subsection (f))(1)) are for non-institutionally11 based long-term services and supports described in 

12 subsection (f)(1)(B); 

13 (2) that submits an application and meets the 

14 conditions described in subsection (c); and 

15 (3) that is selected by the Secretary to partici16 pate in the State balancing incentive payment pro17 gram established under this section. 

18 (c) CONDITIONS.—The conditions described in this 

19 subsection are the following: 

20 (1) APPLICATION.—The State submits an appli21 cation to the Secretary that includes, in addition to 

22 such other information as the Secretary shall re23 quire— 

24 (A) a proposed budget that details the 

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1 sistance for non-institutionally-based long-term 

2 services and supports described in subsection 

3 (f)(1)(B) under the State Medicaid program 

4 during the balancing incentive period and 

5 achieve the target spending percentage applica6 ble to the State under paragraph (2), including 

7 through structural changes to how the State 

8 furnishes such assistance, such as through the 

9 establishment of a ‘‘no wrong door - single 

10 entry point system’’, optional presumptive eligi11 bility, case management services, and the use of 

12 core standardized assessment instruments, and 

13 that includes a description of the new or ex14 panded offerings of such services that the State 

15 will provide and the projected costs of such 

16 services; and 

17 (B) in the case of a State that proposes to 

18 expand the provision of home and community19 based services under its State Medicaid pro20 gram through a State plan amendment under 

21 section 1915(i) of the Social Security Act, at 

22 the option of the State, an election to increase 

23 the income eligibility for such services from 150 

24 percent of the poverty line to such higher per25 centage as the State may establish for such 


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1 purpose, not to exceed 300 percent of the sup2 plemental security income benefit rate estab3 lished by section 1611(b)(1) of the Social Secu4 rity Act (42 U.S.C. 1382(b)(1)). 

5 (2) TARGET SPENDING PERCENTAGES.— 

6 (A) In the case of a balancing incentive 

7 payment State in which less than 25 percent of 

8 the total expenditures for home and community9 based services under the State Medicaid pro10 gram for fiscal year 2009 are for such services, 

11 the target spending percentage for the State to 

12 achieve by not later than October 1, 2015, is 

13 that 25 percent of the total expenditures for 

14 home and community-based services under the 

15 State Medicaid program are for such services. 

16 (B) In the case of any other balancing in17 centive payment State, the target spending per18 centage for the State to achieve by not later 

19 than October 1, 2015, is that 50 percent of the 

20 total expenditures for home and community21 based services under the State Medicaid pro22 gram are for such services. 

23 (3) MAINTENANCE OF ELIGIBILITY REQUIRE24 MENTS.—The State does not apply eligibility stand25 ards, methodologies, or procedures for determining 


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1 eligibility for medical assistance for non-institution2 ally-based long-term services and supports described 

3 in subsection (f)(1)(B) under the State Medicaid 

4 program that are more restrictive than the eligibility 

5 standards, methodologies, or procedures in effect for 

6 such purposes on December 31, 2010. 

7 (4) USE OF ADDITIONAL FUNDS.—The State 

8 agrees to use the additional Federal funds paid to 

9 the State as a result of this section only for pur10 poses of providing new or expanded offerings of non11 institutionally-based long-term services and supports 

12 described in subsection (f)(1)(B) under the State 

13 Medicaid program. 

14 (5) STRUCTURAL CHANGES.—The State agrees 

15 to make, not later than the end of the 6-month pe16 riod that begins on the date the State submits an 

17 application under this section, the following changes: 

18 (A) ‘‘NO WRONG DOOR’’—SINGLE ENTRY

19 POINT SYSTEM.—Development of a statewide 

20 system to enable consumers to access all long21 term services and supports through an agency, 

22 organization, coordinated network, or portal, in 

23 accordance with such standards as the State 

24 shall establish and that shall provide informa25 tion regarding the availability of such services, 


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1 how to apply for such services, and referral 

2 services for services and supports otherwise 

3 available in the community ; and determinations 

4 of financial and functional eligibility for such 

5 services and supports, or assistance with assess6 ment processes for financial and functional eli7 gibility. 

8 (B) CONFLICT-FREE CASE MANAGEMENT

9 SERVICES.—Conflict-free case management 

10 services to develop a service plan, arrange for 

11 services and supports, support the beneficiary 

12 (and, if appropriate, the beneficiary’s care13 givers) in directing the provision of services and 

14 supports, for the beneficiary, and conduct ongo15 ing monitoring to assure that services and sup16 ports are delivered to meet the beneficiary’s 

17 needs and achieve intended outcomes. 

18 (C) CORE STANDARDIZED ASSESSMENT IN19 STRUMENTS.—Development of core standard20 ized assessment instruments for determining 

21 eligibility for non-institutionally-based long-term 

22 services and supports described in subsection 

23 (f)(1)(B), which shall be used in a uniform 

24 manner throughout the State, to determine a 

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1 ices, medical care, transportation, and other 

2 services, and develop an individual service plan 

3 to address such needs. 

4 (6) DATA COLLECTION.—The State agrees to 

5 collect from providers of services and through such 

6 other means as the State determines appropriate the 

7 following data: 

8 (A) SERVICES DATA.—Services data from 

9 providers of non-institutionally-based long-term 

10 services and supports described in subsection 

11 (f)(1)(B) on a per-beneficiary basis and in ac12 cordance with such standardized coding proce13 dures as the State shall establish in consulta14 tion with the Secretary. 

15 (B) QUALITY DATA.—Quality data on a se16 lected set of core quality measures agreed upon 

17 by the Secretary and the State that are linked 

18 to population-specific outcomes measures and 

19 accessible to providers. 

20 (C) OUTCOMES MEASURES.—Outcomes 

21 measures data on a selected set of core popu22 lation-specific outcomes measures agreed upon 

23 by the Secretary and the State that are acces24 sible to providers and include— 


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1 (i) measures of beneficiary and family 

2 caregiver experience with providers; 

3 (ii) measures of beneficiary and family 

4 caregiver satisfaction with services; and 

5 (iii) measures for achieving desired 

6 outcomes appropriate to a specific bene7 ficiary, including employment, participa8 tion in community life, health stability, and 

9 prevention of loss in function. 

10 (d) APPLICABLE PERCENTAGE POINTS INCREASE IN

11 FMAP.—The applicable percentage points increase is— 

12 (1) in the case of a balancing incentive payment 

13 State subject to the target spending percentage de14 scribed in subsection (c)(2)(A), 5 percentage points; 

15 and 

16 (2) in the case of any other balancing incentive 

17 payment State, 2 percentage points. 

18 (e) ELIGIBLE MEDICAL ASSISTANCE EXPENDI19 TURES.— 

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

21 medical assistance described in this subsection is 

22 medical assistance for non-institutionally-based long23 term services and supports described in subsection 

24 (f)(1)(B) that is provided by a balancing incentive 


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1 payment State under its State Medicaid program 

2 during the balancing incentive payment period. 

3 (2) LIMITATION ON PAYMENTS.—In no case 

4 may the aggregate amount of payments made by the 

5 Secretary to balancing incentive payment States 

6 under this section during the balancing incentive pe7 riod exceed $3,000,000,000. 

8 (f) DEFINITIONS.—In this section: 

9 (1) LONG-TERM SERVICES AND SUPPORTS DE10 FINED.—The term ‘‘long-term services and sup11 ports’’ has the meaning given that term by Secretary 

12 and shall include the following (as defined with for 

13 purposes of State Medicaid programs under title 

14 XIX of the Social Security Act): 

15 (A) INSTITUTIONALLY-BASED LONG-TERM

16 SERVICES AND SUPPORTS.—Services provided 

17 in an institution, including the following: 

18 (i) Nursing facility services. 

19 (ii) Services in an intermediate care 

20 facility for the mentally retarded described 

21 in subsection (a)(15) of section 1905 of 

22 such Act. 

23 (B) NON-INSTITUTIONALLY-BASED LONG24 TERM SERVICES AND SUPPORTS.—Services not 


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1 provided in an institution, including the fol2 lowing: 

3 (i) Home and community-based serv4 ices provided under subsection (c), (d), or 

5 (i), of section 1915 of such Act or under 

6 a waiver under section 1115 of such Act. 

7 (ii) Home health care services. 

8 (iii) Personal care services. 

9 (iv) Services described in subsection 

10 (a)(26) of section 1905 of such Act (relat11 ing to PACE program services). 

12 (v) Self-directed personal assistance 

13 services described in section 1915(j) of 

14 such Act. 

15 (2) BALANCING INCENTIVE PERIOD.—The term 

16 ‘‘balancing incentive period’’ means the period that 

17 begins on October 1, 2011, and ends on September 

18 30, 2015. 

19 (3) POVERTY LINE.—The term ‘‘poverty line’’ 

20 has the meaning given that term in section 

21 2110(c)(5) of the Social Security Act (42 U.S.C. 

22 1397jj(c)(5)). 

23 (4) STATE MEDICAID PROGRAM.—The term 

24 ‘‘State Medicaid program’’ means the State program 

25 for medical assistance provided under a State plan 


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1 under title XIX of the Social Security Act and under 

2 any waiver approved with respect to such State plan. 

3 SEC. 1636A. REMOVAL OF BARRIERS TO PROVIDING HOME 

4 AND COMMUNITY-BASED SERVICES. 

5 (a) OVERSIGHT AND ASSESSMENT OF THE ADMINIS6 TRATION OF HOME AND COMMUNITY-BASED SERVICES.— 

7 The Secretary of Health and Human Services shall pro8 mulgate regulations to ensure that all States develop serv9 ice systems that are designed to— 

10 (1) allocate resources for services in a manner 

11 that is responsive to the changing needs and choices 

12 of beneficiaries receiving non-institutionally-based 

13 long-term services and supports described in section 

14 1936(f)(1)(B) (including such services and supports 

15 that are provided under programs other the State 

16 Medicaid program), and that provides strategies for 

17 beneficiaries receiving such services to maximize 

18 their independence; 

19 (2) provide the support and coordination needed 

20 for a beneficiary in need of such services (and their 

21 family caregivers or representative, if applicable) to 

22 design an individualized, self-directed, community23 supported life; and 


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1 (3) improve coordination among all providers of 

2 such services under federally and State-funded pro3 grams in order to— 

4 (A) achieve a more consistent administra5 tion of policies and procedures across programs 

6 in relation to the provision of such services; and 

7 (B) oversee and monitor all service system 

8 functions to assure— 

9 (i) coordination of, and effectiveness 

10 of, eligibility determinations and individual 

11 assessments; and 

12 (ii) development and service moni13 toring of a complaint system, a manage14 ment system, a system to qualify and mon15 itor providers, and systems for role-setting 

16 and individual budget determinations. 

17 (b) ADDITIONAL STATE OPTIONS.—Section 1915(i) 

18 of the Social Security Act (42 U.S.C. 1396n(i)) is amend19 ed by adding at the end the following new paragraphs: 

20 ‘‘(6) STATE OPTION TO PROVIDE HOME AND

21 COMMUNITY-BASED SERVICES TO INDIVIDUALS ELI22 GIBLE FOR SERVICES UNDER A WAIVER.— 

23 ‘‘(A) IN GENERAL.—A State that provides 

24 home and community-based services in accord25 ance with this subsection to individuals who 


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1 satisfy the needs-based criteria for the receipt 

2 of such services established under paragraph 

3 (1)(A) may, in addition to continuing to provide 

4 such services to such individuals, elect to pro5 vide home and community-based services in ac6 cordance with the requirements of this para7 graph to individuals who are eligible for home 

8 and community-based services under a waiver 

9 approved for the State under subsection (c), 

10 (d), or (e) or under section 1115 to provide 

11 such services, but only for those individuals 

12 whose income does not exceed 300 percent of 

13 the supplemental security income benefit rate 

14 established by section 1611(b)(1). 

15 ‘‘(B) APPLICATION OF SAME REQUIRE16 MENTS FOR INDIVIDUALS SATISFYING NEEDS17 BASED CRITERIA.—Subject to subparagraph 

18 (C), a State shall provide home and community19 based services to individuals under this para20 graph in the same manner and subject to the 

21 same requirements as apply under the other 

22 paragraphs of this subsection to the provision 

23 of home and community-based services to indi24 viduals who satisfy the needs-based criteria es25 tablished under paragraph (1)(A). 


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1 ‘‘(C) AUTHORITY TO OFFER DIFFERENT

2 TYPE, AMOUNT, DURATION, OR SCOPE OF HOME

3 AND COMMUNITY-BASED SERVICES.—A State 

4 may offer home and community-based services 

5 to individuals under this paragraph that differ 

6 in type, amount, duration, or scope from the 

7 home and community-based services offered for 

8 individuals who satisfy the needs-based criteria 

9 established under paragraph (1)(A), so long as 

10 such services are within the scope of services 

11 described in paragraph (4)(B) of subsection (c) 

12 for which the Secretary has the authority to ap13 prove a waiver and do not include room or 

14 board. 

15 ‘‘(7) STATE OPTION TO OFFER HOME AND COM16 MUNITY-BASED SERVICES TO SPECIFIC, TARGETED

17 POPULATIONS.— 

18 ‘‘(A) IN GENERAL.—A State may elect in 

19 a State plan amendment under this subsection 

20 to target the provision of home and community21 based services under this subsection to specific 

22 populations and to differ the type, amount, du23 ration, or scope of such services to such specific 

24 populations. 

25 ‘‘(B) 5-YEAR TERM.— 


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1 ‘‘(i) IN GENERAL.—An election by a 

2 State under this paragraph shall be for a 

3 period of 5 years. 

4 ‘‘(ii) PHASE-IN OF SERVICES AND ELI5 GIBILITY PERMITTED DURING INITIAL 5- 

6 YEAR PERIOD.—A State making an elec7 tion under this paragraph may, during the 

8 first 5-year period for which the election is 

9 made, phase-in the enrollment of eligible 

10 individuals, or the provision of services to 

11 such individuals, or both, so long as all eli12 gible individuals in the State for such serv13 ices are enrolled, and all such services are 

14 provided, before the end of the initial 5- 

15 year period. 

16 ‘‘(C) RENEWAL.—An election by a State 

17 under this paragraph may be renewed for addi18 tional 5-year terms if the Secretary determines, 

19 prior to beginning of each such renewal period, 

20 that the State has— 

21 ‘‘(i) adhered to the requirements of 

22 this subsection and paragraph in providing 

23 services under such an election; and 


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1 ‘‘(ii) met the State’s objectives with 

2 respect to quality improvement and bene3 ficiary outcomes.’’. 

4 (c) REMOVAL OF LIMITATION ON SCOPE OF SERV5 ICES.—Paragraph (1) of section 1915(i) of the Social Se6 curity Act (42 U.S.C. 1396n(i)), as amended by sub7 section (a), is amended by striking ‘‘or such other services 

8 requested by the State as the Secretary may approve’’. 

9 (d) OPTIONAL ELIGIBILITY CATEGORY TO PROVIDE

10 FULL MEDICAID BENEFITS TO INDIVIDUALS RECEIVING

11 HOME AND COMMUNITY-BASED SERVICES UNDER A

12 STATE PLAN AMENDMENT.— 

13 (1) IN GENERAL.—Section 1902(a)(10)(A)(ii) 

14 of the Social Security Act (42 U.S.C. 

15 1396a(a)(10)(A)(ii)), as amended by section 

16 1639(a)(1), is amended— 

17 (A) in subclause (XX), by striking ‘‘or’’ at 

18 the end; 

19 (B) in subclause (XXI), by adding ‘‘or’’ at 

20 the end; and 

21 (C) by inserting after subclause (XXI), the 

22 following new subclause: 

23 ‘‘(XXII) who are eligible for 

24 home and community-based services 

25 under needs-based criteria established 


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1 under paragraph (1)(A) of section 

2 1915(i), or who are eligible for home 

3 and community-based services under 

4 paragraph (6) of such section, and 

5 who will receive home and community6 based services pursuant to a State 

7 plan amendment under such sub8 section;’’. 

9 (2) CONFORMING AMENDMENTS.— 

10 (A) Section 1903(f)(4) of the Social Secu11 rity Act (42 U.S.C. 1396b(f)(4)), as amended 

12 by section 1639(a)(4)(B), is amended in the 

13 matter preceding subparagraph (A), by insert14 ing ‘‘1902(a)(10)(A)(ii)(XXII),’’ after 

15 ‘‘1902(a)(10)(A)(ii)(XXI),’’. 

16 (B) Section 1905(a) of the Social Security 

17 Act (42 U.S.C. 1396d(a)) , as so amended, is 

18 amended in the matter preceding paragraph 

19 (1)— 

20 (i) in clause (xv), by striking ‘‘or’’ at 

21 the end; 

22 (ii) in clause (xvi), by adding ‘‘or’’ at 

23 the end; and 

24 (iii) by inserting after clause (xvi) the 

25 following new clause: 


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1 ‘‘(xvii) individuals who are eligible for home and 

2 community-based services under needs-based criteria 

3 established under paragraph (1)(A) of section 

4 1915(i), or who are eligible for home and commu5 nity-based services under paragraph (6) of such sec6 tion, and who will receive home and community7 based services pursuant to a State plan amendment 

8 under such subsection,’’. 

9 (e) ELIMINATION OF OPTION TO LIMIT NUMBER OF

10 ELIGIBLE INDIVIDUALS OR LENGTH OF PERIOD FOR

11 GRANDFATHERED INDIVIDUALS IF ELIGIBILITY CRITERIA

12 IS MODIFIED.—Paragraph (1) of section 1915(i) of such 

13 Act (42 U.S.C. 1396n(i)) is amended— 

14 (1) by striking subparagraph (C) and inserting 

15 the following: 

16 ‘‘(C) PROJECTION OF NUMBER OF INDI17 VIDUALS TO BE PROVIDED HOME AND COMMU18 NITY-BASED SERVICES.—The State submits to 

19 the Secretary, in such form and manner, and 

20 upon such frequency as the Secretary shall 

21 specify, the projected number of individuals to 

22 be provided home and community-based serv23 ices.’’; and 

24 (2) in subclause (II) of subparagraph (D)(ii), 

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1 riod of at least 12 months beginning on the date the 

2 individual first received medical assistance for such 

3 services’’ and inserting ‘‘to continue to be eligible for 

4 such services after the effective date of the modifica5 tion and until such time as the individual no longer 

6 meets the standard for receipt of such services under 

7 such pre-modified criteria’’. 

8 (f) ELIMINATION OF OPTION TO WAIVE

9 STATEWIDENESS; ADDITION OF OPTION TO WAIVE COM10 PARABILITY.—Paragraph (3) of section 1915(i) of such 

11 Act (42 U.S.C. 1396n(3)) is amended by striking 

12 ‘‘1902(a)(1) (relating to statewideness)’’ and inserting 

13 ‘‘1902(a)(10)(B) (relating to comparability)’’. 

14 (g) EFFECTIVE DATE.—The amendments made by 

15 subsections (b) through (f) take effect on the first day of 

16 the first fiscal year quarter that begins after the date of 

17 enactment of this Act. 

18 SEC. 1637. MONEY FOLLOWS THE PERSON REBALANCING 

19 DEMONSTRATION. 

20 (a) EXTENSION OF DEMONSTRATION.— 

21 (1) IN GENERAL.—Section 6071(h) of the Def22 icit Reduction Act of 2005 (42 U.S.C. 1396a note) 

23 is amended— 


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1 (A) in paragraph (1)(E), by striking ‘‘fis2 cal year 2011’’ and inserting ‘‘each of fiscal 

3 years 2011 through 2016’’; and 

4 (B) in paragraph (2), by striking ‘‘2011’’ 

5 and inserting ‘‘2016’’. 

6 (2) EVALUATION.—Paragraphs (2) and (3) of 

7 section 6071(g) of such Act is amended are each 

8 amended by striking ‘‘2011’’ and inserting ‘‘2016’’. 

9 (b) REDUCTION OF INSTITUTIONAL RESIDENCY PE10 RIOD.— 

11 (1) IN GENERAL.—Section 6071(b)(2) of the 

12 Deficit Reduction Act of 2005 (42 U.S.C. 1396a 

13 note) is amended— 

14 (A) in subparagraph (A)(i), by striking ‘‘, 

15 for a period of not less than 6 months or for 

16 such longer minimum period, not to exceed 2 

17 years, as may be specified by the State’’ and in18 serting ‘‘for a period of not less than 90 con19 secutive days’’; and 

20 (B) by adding at the end the following: 

21 ‘‘Any days that an individual resides in an institu22 tion on the basis of having been admitted solely for 

23 purposes of receiving short-term rehabilitative serv24 ices for a period for which payment for such services 

25 is limited under title XVIII shall not be taken into 


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1 account for purposes of determining the 90-day pe2 riod required under subparagraph (A)(i).’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by this subsection take effect 30 days after the date 

5 of enactment of this Act. 

6 SEC. 1638. CLARIFICATION OF DEFINITION OF MEDICAL AS7 SISTANCE. 

8 Section 1905(a) of the Social Security Act (42 U.S.C. 

9 1396d(a)) is amended by inserting ‘‘or the care and serv10 ices themselves, or both’’ before ‘‘(if provided in or after’’. 

11 SEC. 1639. STATE ELIGIBILITY OPTION FOR FAMILY PLAN12 NING SERVICES. 

13 (a) COVERAGE AS OPTIONAL CATEGORICALLY

14 NEEDY GROUP.— 

15 (1) IN GENERAL.—Section 1902(a)(10)(A)(ii) 

16 of the Social Security Act (42 U.S.C. 

17 1396a(a)(10)(A)(ii)), as amended by section 

18 1601(e), is amended— 

19 (A) in subclause (XIX), by striking ‘‘or’’ at 

20 the end; 

21 (B) in subclause (XX), by adding ‘‘or’’ at 

22 the end; and 

23 (C) by adding at the end the following new 

24 subclause: 


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1 ‘‘(XXI) who are described in sub2 section (ii) (relating to individuals 

3 who meet certain income standards);’’. 

4 (2) GROUP DESCRIBED.—Section 1902 of such 

5 Act (42 U.S.C. 1396a), as amended by section 

6 1601(d), is amended by adding at the end the fol7 lowing new subsection: 

8 ‘‘(ii)(1) Individuals described in this subsection are 

9 individuals— 

10 ‘‘(A) whose income does not exceed an in11 come eligibility level established by the State 

12 that does not exceed the highest income eligi13 bility level established under the State plan 

14 under this title (or under its State child health 

15 plan under title XXI) for pregnant women; and 

16 ‘‘(B) who are not pregnant. 

17 ‘‘(2) At the option of a State, individuals de18 scribed in this subsection may include individuals 

19 who, had individuals applied on or before January 1, 

20 2007, would have been made eligible pursuant to the 

21 standards and processes imposed by that State for 

22 benefits described in clause (XV) of the matter fol23 lowing subparagraph (G) of section subsection 

24 (a)(10) pursuant to a waiver granted under section 

25 1115. 


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1 ‘‘(3) At the option of a State, for purposes of 

2 subsection (a)(17)(B), in determining eligibility for 

3 services under this subsection, the State may con4 sider only the income of the applicant or recipient.’’. 

5 (3) LIMITATION ON BENEFITS.—Section 

6 1902(a)(10) of the Social Security Act (42 U.S.C. 

7 1396a(a)(10)), as amended by section 

8 1601(a)(5)(A), is amended in the matter following 

9 subparagraph (G)— 

10 (A) by striking ‘‘and (XV)’’ and inserting 

11 ‘‘(XV)’’; and 

12 (B) by inserting ‘‘, and (XVI) the medical 

13 assistance made available to an individual de14 scribed in subsection (ii) shall be limited to 

15 family planning services and supplies described 

16 in section 1905(a)(4)(C) including medical di17 agnosis and treatment services that are pro18 vided pursuant to a family planning service in 

19 a family planning setting’’ before the semicolon. 

20 (4) CONFORMING AMENDMENTS.— 

21 (A) Section 1905(a) of the Social Security 

22 Act (42 U.S.C. 1396d(a)), as amended by sec23 tion 1601(e)(2)(A), is amended in the matter 

24 preceding paragraph (1)— 


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1 (i) in clause (xiv), by striking ‘‘or’’ at 

2 the end; 

3 (ii) in clause (xv), by adding ‘‘or’’ at 

4 the end; and 

5 (iii) by inserting after clause (xv) the 

6 following: 

7 ‘‘(xvi) individuals described in section 

8 1902(ii),’’. 

9 (B) Section 1903(f)(4) of such Act (42 

10 U.S.C. 1396b(f)(4)), as amended by section 

11 1601(e)(2)(B), is amended by inserting 

12 ‘‘1902(a)(10)(A)(ii)(XXI),’’ after 

13 ‘‘1902(a)(10)(A)(ii)(XX),’’. 

14 (b) PRESUMPTIVE ELIGIBILITY.— 

15 (1) IN GENERAL.—Title XIX of the Social Se16 curity Act (42 U.S.C. 1396 et seq.) is amended by 

17 inserting after section 1920B the following: 

18 ‘‘PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING

19 SERVICES

20 ‘‘SEC. 1920C. (a) STATE OPTION.—State plan ap21 proved under section 1902 may provide for making med22 ical assistance available to an individual described in sec23 tion 1902(ii) (relating to individuals who meet certain in24 come eligibility standard) during a presumptive eligibility 

25 period. In the case of an individual described in section 

26 1902(ii), such medical assistance shall be limited to family 


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1 planning services and supplies described in 1905(a)(4)(C) 

2 and, at the State’s option, medical diagnosis and treat3 ment services that are provided in conjunction with a fam4 ily planning service in a family planning setting. 

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

6 ‘‘(1) PRESUMPTIVE ELIGIBILITY PERIOD.—The 

7 term ‘presumptive eligibility period’ means, with re8 spect to an individual described in subsection (a), 

9 the period that— 

10 ‘‘(A) begins with the date on which a 

11 qualified entity determines, on the basis of pre12 liminary information, that the individual is de13 scribed in section 1902(ii); and 

14 ‘‘(B) ends with (and includes) the earlier 

15 of— 

16 ‘‘(i) the day on which a determination 

17 is made with respect to the eligibility of 

18 such individual for services under the State 

19 plan; or 

20 ‘‘(ii) in the case of such an individual 

21 who does not file an application by the last 

22 day of the month following the month dur23 ing which the entity makes the determina24 tion referred to in subparagraph (A), such 

25 last day. 


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1 ‘‘(2) QUALIFIED ENTITY.— 

2 ‘‘(A) IN GENERAL.—Subject to subpara3 graph (B), the term ‘qualified entity’ means 

4 any entity that— 

5 ‘‘(i) is eligible for payments under a 

6 State plan approved under this title; and 

7 ‘‘(ii) is determined by the State agen8 cy to be capable of making determinations 

9 of the type described in paragraph (1)(A). 

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

11 in this paragraph shall be construed as pre12 venting a State from limiting the classes of en13 tities that may become qualified entities in 

14 order to prevent fraud and abuse. 

15 ‘‘(c) ADMINISTRATION.— 

16 ‘‘(1) IN GENERAL.—The State agency shall pro17 vide qualified entities with— 

18 ‘‘(A) such forms as are necessary for an 

19 application to be made by an individual de20 scribed in subsection (a) for medical assistance 

21 under the State plan; and 

22 ‘‘(B) information on how to assist such in23 dividuals in completing and filing such forms. 

24 ‘‘(2) NOTIFICATION REQUIREMENTS.—A quali25 fied entity that determines under subsection 


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1 (b)(1)(A) that an individual described in subsection 

2 (a) is presumptively eligible for medical assistance 

3 under a State plan shall— 

4 ‘‘(A) notify the State agency of the deter5 mination within 5 working days after the date 

6 on which determination is made; and 

7 ‘‘(B) inform such individual at the time 

8 the determination is made that an application 

9 for medical assistance is required to be made by 

10 not later than the last day of the month fol11 lowing the month during which the determina12 tion is made. 

13 ‘‘(3) APPLICATION FOR MEDICAL ASSIST14 ANCE.—In the case of an individual described in 

15 subsection (a) who is determined by a qualified enti16 ty to be presumptively eligible for medical assistance 

17 under a State plan, the individual shall apply for 

18 medical assistance by not later than the last day of 

19 the month following the month during which the de20 termination is made. 

21 ‘‘(d) PAYMENT.—Notwithstanding any other provi22 sion of law, medical assistance that— 

23 ‘‘(1) is furnished to an individual described in 

24 subsection (a)— 


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1 ‘‘(A) during a presumptive eligibility pe2 riod; and 

3 ‘‘(B) by a entity that is eligible for pay4 ments under the State plan; and 

5 ‘‘(2) is included in the care and services covered 

6 by the State plan, 

7 shall be treated as medical assistance provided by such 

8 plan for purposes of clause (4) of the first sentence of 

9 section 1905(b).’’. 

10 (2) CONFORMING AMENDMENTS.— 

11 (A) Section 1902(a)(47) of the Social Se12 curity Act (42 U.S.C. 1396a(a)(47)), as amend13 ed by section 1622(a), is amended— 

14 (i) in subparagraph (A), by inserting 

15 before the semicolon at the end the fol16 lowing: ‘‘and provide for making medical 

17 assistance available to individuals described 

18 in subsection (a) of section 1920C during 

19 a presumptive eligibility period in accord20 ance with such section’’; and 

21 (ii) in subparagraph (B), by striking 

22 ‘‘or 1920B’’ and inserting ‘‘1920B, or 

23 1920C’’. 

24 (B) Section 1903(u)(1)(D)(v) of such Act 

25 (42 U.S.C. 1396b(u)(1)(D)(v)), as amended by 


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1 section 1622(b), is amended by inserting ‘‘or 

2 for medical assistance provided to an individual 

3 described in subsection (a) of section 1920C 

4 during a presumptive eligibility period under 

5 such section,’’ after ‘‘1920B during a presump6 tive eligibility period under such section,’’. 

7 (c) CLARIFICATION OF COVERAGE OF FAMILY PLAN8 NING SERVICES AND SUPPLIES.—Section 1937(b) of the 

9 Social Security Act (42 U.S.C. 1396u–7(b)), as amended 

10 by section 1601(c), is amended by adding at the end the 

11 following: 

12 ‘‘(7) COVERAGE OF FAMILY PLANNING SERV13 ICES AND SUPPLIES.—Notwithstanding the previous 

14 provisions of this section, a State may not provide 

15 for medical assistance through enrollment of an indi16 vidual with benchmark coverage or benchmark-equiv17 alent coverage under this section unless such cov18 erage includes for any individual described in section 

19 1905(a)(4)(C), medical assistance for family plan20 ning services and supplies in accordance with such 

21 section.’’. 

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

23 this section take effect on the date of the enactment of 

24 this Act and shall apply to items and services furnished 

25 on or after such date. 


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1 SEC. 1640. GRANTS FOR SCHOOL-BASED HEALTH CENTERS. 

2 Title XIX of the Social Security Act (42 U.S.C. 

3 1397aa et seq.), as amended by section 1621, is amended 

4 by adding at the end the following: 

5 ‘‘SEC. 1944. GRANTS FOR SCHOOL-BASED HEALTH CEN6 TERS. 

7 ‘‘(a) PROGRAM.—The Secretary shall establish a pro8 gram to award grants to eligible entities to support the 

9 operation of school-based health centers (as defined in sec10 tion 2110(c)(9)). 

11 ‘‘(b) ELIGIBILITY.—To be eligible for a grant under 

12 this section, an entity shall— 

13 ‘‘(1) be a school-based health center or a spon14 soring facility (as defined in section 2110(c)(9)(B)) 

15 of a school-based health center; and 

16 ‘‘(2) submit an application at such time, in 

17 such manner, and containing such information as 

18 the Secretary may require, including at a minimum 

19 an assurance that funds awarded under the grant 

20 shall not be used to provide any service that is not 

21 authorized or allowed by Federal, State, or local law. 

22 ‘‘(c) PREFERENCE.—In awarding grants under this 

23 section, the Secretary shall give preference to awarded 

24 grants for school-based health centers that serve a large 

25 population of children eligible for medical assistance under 

26 the State plan under this title or under a waiver of the 


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1 plan or children eligible for child health assistance under 

2 the State child health plan under title XXI. 

3 ‘‘(d) APPROPRIATIONS.—Out of any funds in the 

4 Treasury not otherwise appropriated, there is appro5 priated for each of fiscal years 2010 and 2011, 

6 $100,000,000 for the purpose of carrying out this section. 

7 Funds appropriated under this subsection shall remain 

8 available until expended.’’. 

9 SEC. 1641. THERAPEUTIC FOSTER CARE. 

10 Section 1905 of the Social Security Act (42 U.S.C. 

11 1396d), as amended by sections 1601(a)(3) and 1636, is 

12 amended by adding at the end the following: 

13 ‘‘(aa)(1) Nothing in subsection (a) shall be construed 

14 as limiting a State from providing medical assistance for 

15 therapeutic foster care for children in foster care under 

16 the responsibility of the State in out-of-home placements. 

17 ‘‘(2) The term ‘therapeutic foster care’ means a fos18 ter care program that provides— 

19 ‘‘(A) to a child in foster care under the respon20 sibility of the State— 

21 ‘‘(i) structured daily activities that develop, 

22 improve, monitor, and reinforce age-appropriate 

23 social, communications, and behavioral skills; 

24 ‘‘(ii) crisis intervention and crisis support 

25 services; 


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1 ‘‘(iii) medication monitoring; 

2 ‘‘(iv) counseling; and 

3 ‘‘(v) case management services; and 

4 ‘‘(B) specialized training for the foster parent 

5 and consultation with the foster parent on the man6 agement of children with mental illnesses and re7 lated health and developmental conditions.’’. 

8 SEC. 1642. SENSE OF THE SENATE REGARDING LONG-TERM 

9 CARE. 

10 (a) FINDINGS.—The Senate makes the following 

11 findings: 

12 (1) Nearly 2 decades have passed since Con13 gress seriously considered long-term care reform. 

14 The United States Bipartisan Commission on Com15 prehensive Health Care, also know as the ‘‘Pepper 

16 Commission’’, released its ‘‘Call for Action’’ blue17 print for health reform in September 1990. In the 

18 20 years since those recommendations were made, 

19 Congress has never acted on the report. 

20 (2) In 1999, under the United States Supreme 

21 Court’s decision in Olmstead v. L.C., 527 U.S. 581 

22 (1999), individuals with disabilities have the right to 

23 choose to receive their long-term services and sup24 ports in the community, rather than in an institu25 tional setting. 


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1 (3) Despite the Pepper Commission and 

2 Olmstead decision, the long-term care provided to 

3 our Nation‘s elderly and disabled has not improved. 

4 In fact, for many, it has gotten far worse. 

5 (4) In 2007, 69 percent of Medicaid long-term 

6 care spending for elderly individuals and adults with 

7 physical disabilities paid for institutional services. 

8 Only 6 states spent 50 percent or more of their 

9 Medicaid long-term care dollars on home and com10 munity-based services for elderly individuals and 

adults with physical disabilities while 1 11 ⁄2 of the 

12 States spent less than 25 percent. This disparity 

13 continues even though, on average, it is estimated 

14 that Medicaid dollars can support nearly 3 elderly 

15 individuals and adults with physical disabilities in 

16 home and community-based services for every indi17 vidual in a nursing home. Although every State has 

18 chosen to provide certain services under home and 

19 community-based waivers, these services are un20 evenly available within and across States, and reach 

21 a small percentage of eligible individuals. 

22 (b) SENSE OF THE SENATE.—It is the sense of the 

23 Senate that— 

24 (1) during the 111th session of Congress, Con25 gress should address long-term services and supports 


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1 in a comprehensive way that guarantees elderly and 

2 disabled individuals the care they need; and 

3 (2) long term services and supports should be 

4 made available in the community in addition to in 

5 institutions. 

6 PART V—MEDICAID PRESCRIPTION DRUG 

7 COVERAGE 

8 SEC. 1651. PRESCRIPTION DRUG REBATES. 

9 (a) INCREASE IN MINIMUM REBATE PERCENTAGE

10 FOR SINGLE SOURCE DRUGS AND INNOVATOR MULTIPLE

11 SOURCE DRUGS.—Section 1927(c)(1)(B) of the Social Se12 curity Act (42 U.S.C. 1396r–8(c)(1)(B)) is amended— 

13 (1) in clause (i)— 

14 (A) in subclause (IV), by striking ‘‘and’’ at 

15 the end; 

16 (B) in subclause (V)— 

17 (i) by inserting ‘‘and before January 

18 1, 2010’’ after ‘‘December 31, 1995,’’; and 

19 (ii) by striking the period at the end 

20 and inserting ‘‘; and’’; and 

21 (C) by adding at the end the following new 

22 subclause: 

23 ‘‘(VI) except as provided in 

24 clause (iii), after December 31, 2009, 

25 23.1 percent.’’; and 


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1 (2) by adding at the end the following new 

2 clause: 

3 ‘‘(iii) MINIMUM REBATE PERCENTAGE

4 FOR CERTAIN DRUGS.— 

5 ‘‘(I) IN GENERAL.—In the case 

6 of a single source drug or an inno7 vator multiple source drug described 

8 in subclause (II), the minimum rebate 

9 percentage for rebate periods specified 

10 in clause (i)(VI) is 17.1 percent. 

11 ‘‘(II) DRUG DESCRIBED.—For 

12 purposes of subclause (I), a single 

13 source drug or an innovator multiple 

14 source drug described in this sub15 clause is any of the following drugs: 

16 ‘‘(aa) A clotting factor for 

17 which a separate furnishing pay18 ment is made under section 

19 1842(o)(5) and which is included 

20 on a list of such factors specified 

21 and updated regularly by the 

22 Secretary. 

23 ‘‘(bb) A drug approved by 

24 the Food and Drug AdministraVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00385 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tion exclusively for pediatric indi2 cations.’’. 

3 (b) INCREASE IN REBATE FOR OTHER DRUGS.—Sec4 tion 1927(c)(3)(B) of such Act (42 U.S.C. 1396r– 

5 8(c)(3)(B)) is amended— 

6 (1) in clause (i), by striking ‘‘and’’ at the end; 

7 (2) in clause (ii)— 

8 (A) by inserting ‘‘and before January 1, 

9 2010,’’ after ‘‘December 31, 1993,’’; and 

10 (B) by striking the period and inserting ‘‘; 

11 and’’; and 

12 (3) by adding at the end the following new 

13 clause: 

14 ‘‘(iii) after December 31, 2009, is 13 

15 percent.’’. 

16 (c) EXTENSION OF PRESCRIPTION DRUG DISCOUNTS

17 TO ENROLLEES OF MEDICAID MANAGED CARE ORGANI18 ZATIONS.— 

19 (1) IN GENERAL.—Section 1903(m)(2)(A) of 

20 such Act (42 U.S.C. 1396b(m)(2)(A)) is amended— 

21 (A) in clause (xi), by striking ‘‘and’’ at the 

22 end; 

23 (B) in clause (xii), by striking the period 

24 at the end and inserting ‘‘; and’’; and 

25 (C) by adding at the end the following: 


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1 ‘‘(xiii) such contract provides that (I) 

2 covered outpatient drugs dispensed to indi3 viduals eligible for medical assistance who 

4 are enrolled with the entity shall be subject 

5 to the same rebate required by the agree6 ment entered into under section 1927 as 

7 the State is subject to and that the State 

8 shall collect such rebates from manufactur9 ers, (II) capitation rates paid to the entity 

10 shall be based on actual cost experience re11 lated to rebates and subject to the Federal 

12 regulations requiring actuarially sound 

13 rates, and (III) the entity shall report to 

14 the State, on such timely and periodic 

15 basis as specified by the Secretary, infor16 mation on the total number of units of 

17 each dosage form and strength and pack18 age size by National Drug Code of each 

19 covered outpatient drug dispensed to indi20 viduals eligible for medical assistance who 

21 are enrolled with the entity and for which 

22 the entity is responsible for coverage of 

23 such drug under this subsection.’’. 

24 (2) CONFORMING AMENDMENTS.—Section 1927 

25 (42 U.S.C. 1396r–8) is amended— 


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1 (A) in subsection (d)(4), by inserting after 

2 subparagraph (E) the following: 

3 ‘‘(F) Notwithstanding the preceding sub4 paragraphs of this paragraph, any formulary 

5 established by medicaid managed care organiza6 tion with a contract under section 1903(m) may 

7 be based on positive inclusion of drugs selected 

8 by a formulary committee consisting of physi9 cians, pharmacists, and other individuals with 

10 appropriate clinical experience as long as drugs 

11 excluded from the formulary are available 

12 through prior authorization, as described in 

13 paragraph (5).’’; and 

14 (B) in subsection (j), by striking para15 graph (1) and inserting the following: 

16 ‘‘(1) Covered outpatient drugs are not subject 

17 to the requirements of this section if such drugs 

18 are— 

19 ‘‘(A) dispensed by health maintenance or20 ganizations, including Medicaid managed care 

21 organizations that contract under section 

22 1903(m); and 

23 ‘‘(B) subject to discounts under section 

24 340B of the Public Health Service Act.’’. 


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1 (d) ADDITIONAL REBATE FOR NEW FORMULATIONS

2 OF EXISTING DRUGS.— 

3 (1) IN GENERAL.—Section 1927(c)(2) of the 

4 Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 

5 amended by adding at the end the following new 

6 subparagraph: 

7 ‘‘(C) TREATMENT OF NEW FORMULA8 TIONS.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii), in the case of a drug 

11 that is a new formulation, such as an ex12 tended-release formulation, of a single 

13 source drug or an innovator multiple 

14 source drug, the rebate obligation with re15 spect to the drug under this section shall 

16 be the amount computed under this section 

17 for the new formulation of the drug or, if 

18 greater, the product of— 

19 ‘‘(I) the average manufacturer 

20 price of the new formulation of the 

21 single source drug or innovator mul22 tiple source drug; 

23 ‘‘(II) the highest additional re24 bate (calculated as a percentage of av25 erage manufacturer price) under this 


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1 section for any strength of the origi2 nal single source drug or innovator 

3 multiple source drug; and 

4 ‘‘(III) the total number of units 

5 of each dosage form and strength of 

6 the new formulation paid for under 

7 the State plan in the rebate period (as 

8 reported by the State). 

9 ‘‘(ii) NO APPLICATION TO NEW FOR10 MULATIONS OF ORPHAN DRUGS.—Clause 

11 (i) shall not apply to a new formulation of 

12 a covered outpatient drug that is or has 

13 been designated under section 526 of the 

14 Federal Food, Drug, and Cosmetic Act (21 

15 U.S.C. 360bb) for a rare disease or condi16 tion, without regard to whether the period 

17 of market exclusivity for the drug under 

18 section 527 of such Act has expired or the 

19 specific indication for use of the drug.’’. 

20 (2) EFFECTIVE DATE.—The amendment made 

21 by paragraph (1) shall apply to drugs dispensed 

22 after December 31, 2009. 

23 (e) MAXIMUM REBATE AMOUNT.—Section 

24 1927(c)(2) of such Act (42 U.S.C. 1396r–8(c)(2)), as 


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1 amended by subsection (d), is amended by adding at the 

2 end the following new subparagraph: 

3 ‘‘(D) MAXIMUM REBATE AMOUNT.—In no 

4 case shall the sum of the amounts applied 

5 under paragraph (1)(A)(ii) and this paragraph 

6 with respect to each dosage form and strength 

7 of a single source drug or an innovator multiple 

8 source drug for a rebate period beginning after 

9 December 31, 2009, exceed 100 percent of the 

10 average manufacturer price of the drug.’’. 

11 (f) CONFORMING AMENDMENTS.— 

12 (1) IN GENERAL.—Section 340B of the Public 

13 Health Service Act (42 U.S.C. 256b) is amended— 

14 (A) in subsection (a)(2)(B)(i), by striking 

15 ‘‘1927(c)(4)’’ and inserting ‘‘1927(c)(3)’’; and 

16 (B) by striking subsection (c); and 

17 (C) redesignating subsection (d) as sub18 section (c). 

19 (2) EFFECTIVE DATE.—The amendments made 

20 by this subsection take effect on January 1, 2010. 

21 SEC. 1652. ELIMINATION OF EXCLUSION OF COVERAGE OF 

22 CERTAIN DRUGS. 

23 (a) IN GENERAL.—Section 1927(d) of the Social Se24 curity Act (42 U.S.C. 1397r–8(d)) is amended— 

25 (1) in paragraph (2)— 


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1 (A) by striking subparagraphs (E), (I), 

2 and (J), respectively; and 

3 (B) by redesignating subparagraphs (F), 

4 (G), (H), and (K) as subparagraphs (E), (F), 

5 (G), and (H), respectively; and 

6 (2) by adding at the end the following new 

7 paragraph: 

8 ‘‘(7) NON-EXCLUDABLE DRUGS.—The following 

9 drugs or classes of drugs, or their medical uses, shall 

10 not be excluded from coverage: 

11 ‘‘(A) Agents when used to promote smok12 ing cessation. 

13 ‘‘(B) Barbiturates. 

14 ‘‘(C) Benzodiazepines.’’. 

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

16 this section shall apply to services furnished on or after 

17 January 1, 2014. 

18 SEC. 1653. PROVIDING ADEQUATE PHARMACY REIMBURSE19 MENT. 

20 (a) PHARMACY REIMBURSEMENT LIMITS.— 

21 (1) IN GENERAL.—Section 1927(e) of the So22 cial Security Act (42 U.S.C. 1396r–8(e)) is amend23 ed— 

24 (A) in paragraph (4), by striking ‘‘(or, ef25 fective January 1, 2007, two or more)’’; and 


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1 (B) by striking paragraph (5) and insert2 ing the following: 

3 ‘‘(5) USE OF AMP IN UPPER PAYMENT LIM4 ITS.—The Secretary shall calculate the Federal 

5 upper reimbursement limit established under para6 graph (4) as no less than 175 percent of the weight7 ed average (determined on the basis of utilization) of 

8 the most recently reported monthly average manu9 facturer prices for pharmaceutically and therapeuti10 cally equivalent multiple source drug products that 

11 are available for purchase by retail community phar12 macies on a nationwide basis. The Secretary shall 

13 implement a smoothing process for average manu14 facturer prices. Such process shall be similar to the 

15 smoothing process used in determining the average 

16 sales price of a drug or biological under section 

17 1847A.’’. 

18 (2) DEFINITION OF AMP.—Section 1927(k)(1) 

19 of such Act (42 U.S.C. 1396r–8(k)(1)) is amend20 ed— 

21 (A) in subparagraph (A), by striking ‘‘by’’ 

22 and all that follows through the period and in23 serting ‘‘by— 

24 ‘‘(i) wholesalers for drugs distributed 

25 to retail community pharmacies; and 


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1 ‘‘(ii) retail community pharmacies 

2 that purchase drugs directly from the man3 ufacturer.’’; and 

4 (B) by striking subparagraph (B) and in5 serting the following: 

6 ‘‘(B) EXCLUSION OF CUSTOMARY PROMPT

7 PAY DISCOUNTS AND OTHER PAYMENTS.— 

8 ‘‘(i) IN GENERAL.—The average man9 ufacturer price for a covered outpatient 

10 drug shall exclude— 

11 ‘‘(I) customary prompt pay dis12 counts extended to wholesalers; 

13 ‘‘(II) bona fide service fees paid 

14 by manufacturers to wholesalers or re15 tail community pharmacies, including 

16 (but not limited to) distribution serv17 ice fees, inventory management fees, 

18 product stocking allowances, and fees 

19 associated with administrative services 

20 agreements and patient care programs 

21 (such as medication compliance pro22 grams and patient education pro23 grams); 

24 ‘‘(III) reimbursement by manu25 facturers for recalled, damaged, exVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00394 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 pired, or otherwise unsalable returned 

2 goods, including (but not limited to) 

3 reimbursement for the cost of the 

4 goods and any reimbursement of costs 

5 associated with return goods handling 

6 and processing, reverse logistics, and 

7 drug destruction; and 

8 ‘‘(IV) payments received from, 

9 and rebates or discounts provided to, 

10 pharmacy benefit managers, managed 

11 care organizations, health mainte12 nance organizations, insurers, hos13 pitals, clinics, mail order pharmacies, 

14 long term care providers, manufactur15 ers, or any other entity that does not 

16 conduct business as a wholesaler or a 

17 retail community pharmacy. 

18 ‘‘(ii) INCLUSION OF OTHER DIS19 COUNTS AND PAYMENTS.—Notwith20 standing clause (i), any other discounts, 

21 rebates, payments, or other financial trans22 actions that are received by, paid by, or 

23 passed through to, retail community phar24 macies shall be included in the average 


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1 manufacturer price for a covered out2 patient drug.’’; and 

3 (C) in subparagraph (C), by striking ‘‘the 

4 retail pharmacy class of trade’’ and inserting 

5 ‘‘retail community pharmacies’’. 

6 (3) DEFINITION OF MULTIPLE SOURCE

7 DRUG.—Section 1927(k)(7) of such Act (42 U.S.C. 

8 1396r–8(k)(7)) is amended— 

9 (A) in subparagraph (A)(i)(III), by strik10 ing ‘‘the State’’ and inserting ‘‘the United 

11 States’’; and 

12 (B) in subparagraph (C)— 

13 (i) in clause (i), by inserting ‘‘and’’ 

14 after the semicolon; 

15 (ii) in clause (ii), by striking ‘‘; and’’ 

16 and inserting a period; and 

17 (iii) by striking clause (iii). 

18 (4) DEFINITIONS OF RETAIL COMMUNITY PHAR19 MACY; WHOLESALER.—Section 1927(k) of such Act 

20 (42 U.S.C. 1396r–8(k)) is amended by adding at the 

21 end the following new paragraphs: 

22 ‘‘(10) RETAIL COMMUNITY PHARMACY.—The 

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1 macy that is licensed as a pharmacy by the State 

2 and that dispenses medications to the general public 

3 at retail prices. Such term does not include a phar4 macy that dispenses prescription medications to pa5 tients primarily through the mail, nursing home 

6 pharmacies, long-term care facility pharmacies, hos7 pital pharmacies, clinics, charitable or not-for-profit 

8 pharmacies, government pharmacies, or pharmacy 

9 benefit managers. 

10 ‘‘(11) WHOLESALER.—The term ‘wholesaler’ 

11 means a drug wholesaler that is engaged in whole12 sale distribution of prescription drugs to retail com13 munity pharmacies, including (but not limited to) 

14 manufacturers, repackers, distributors, own-label 

15 distributors, private-label distributors, jobbers, bro16 kers, warehouses (including manufacturer’s and dis17 tributor’s warehouses, chain drug warehouses, and 

18 wholesale drug warehouses) independent wholesale 

19 drug traders, and retail community pharmacies that 

20 conduct wholesale distributions.’’. 

21 (b) DISCLOSURE OF PRICE INFORMATION TO THE

22 PUBLIC.—Section 1927(b)(3) of such Act (42 U.S.C. 

23 1396r–8(b)(3)) is amended— 

24 (1) in subparagraph (A)— 


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1 (A) in clause (i), in the matter preceding 

2 subclause (I), by inserting ‘‘month of a’’ after 

3 ‘‘each’’; and 

4 (B) in the second sentence, by inserting 

5 ‘‘(relating to the weighted average of the most 

6 recently reported monthly average manufacturer 

7 prices)’’ after ‘‘(D)(v)’’; and 

8 (2) in subparagraph (D)(v), by striking ‘‘aver9 age manufacturer prices’’ and inserting ‘‘the weight10 ed average of the most recently reported monthly av11 erage manufacturer prices and the average retail 

12 survey price determined for each multiple source 

13 drug in accordance with subsection (f)’’. 

14 (c) CLARIFICATION OF APPLICATION OF SURVEY OF

15 RETAIL PRICES.—Section 1927(f)(1) of such Act (42 

16 U.S.C. 1396r–8(b)(1)) is amended— 

17 (1) in subparagraph (A)(i), by inserting ‘‘with 

18 respect to a retail community pharmacy,’’ before 

19 ‘‘the determination’’; and 

20 (2) in subparagraph (C)(ii), by striking ‘‘retail 

21 pharmacies’’ and inserting ‘‘retail community phar22 macies’’. 

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

24 this section shall take effect on the first day of the first 

25 calendar year quarter that begins at least 180 days after 


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1 the date of enactment of this Act, without regard to 

2 whether or not final regulations to carry out such amend3 ments have been promulgated by such date. 

4 SEC. 1654. STUDY OF BARRIERS TO APPROPRIATE UTILIZA5 TION OF GENERIC MEDICINE IN FEDERAL 

6 HEALTH CARE PROGRAMS. 

7 (a) STUDY.—The Comptroller General of the United 

8 States shall conduct a study of State laws that have a 

9 negative impact on generic drug utilization in Federal 

10 health care programs (as defined in section 1128B(f) of 

11 the Social Security Act (42 U.S.C. 1320a–7b(f))) due to 

12 restrictions such as (but not limited to) limits on phar13 macists’ ability to provide a generic drug substitute for 

14 a prescribed name brand drug and carve-outs of certain 

15 classes of drugs from generic substitution. 

16 (b) REPORT.—Not later than April 1, 2012, the 

17 Comptroller General of the United States shall submit a 

18 report to Congress on the results of the study conducted 

19 under subsection (a). 

20 PART VI—MEDICAID DISPROPORTIONATE SHARE 

21 HOSPITAL (DSH) PAYMENTS 

22 SEC. 1655. DISPROPORTIONATE SHARE HOSPITAL PAY23 MENTS. 

24 (a) IN GENERAL.—Section 1923(f) of the Social Se25 curity Act (42 U.S.C. 1396r–4(f)) is amended— 


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1 (1) in paragraph (1), by striking ‘‘and (3)’’ and 

2 inserting ‘‘, (3), and (7)’’; 

3 (2) in paragraph (3)(A), by striking ‘‘paragraph 

4 (6)’’ and inserting ‘‘paragraphs (6) and (7)’’; 

5 (3) by redesignating paragraph (7) as para6 graph (8); and 

7 (4) by inserting after paragraph (6) the fol8 lowing new paragraph: 

9 ‘‘(7) REDUCTION OF STATE DSH ALLOTMENTS

10 ONCE REDUCTION IN UNINSURED THRESHOLD

11 REACHED.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (E), the DSH allotment for a State for 

14 fiscal years beginning with the fiscal year de15 scribed in subparagraph (C) (with respect to 

16 the State), is equal to the DSH allotment that 

17 would be determined under this subsection for 

18 the State for the fiscal year without application 

19 of this paragraph (but after the application of 

20 subparagraph (D)), reduced by the applicable 

21 percentage determined for the State for the fis22 cal year under subparagraph (B). 

23 ‘‘(B) APPLICABLE PERCENTAGE.—For 

24 purposes of subparagraph (A), the applicable 


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1 percentage for a State for a fiscal year is the 

2 following: 

3 ‘‘(i) UNINSURED REDUCTION THRESH4 OLD FISCAL YEAR.—In the case of the first 

5 fiscal year described in subparagraph (C) 

6 with respect to the State— 

7 ‘‘(I) if the State is a low DSH 

8 State described in paragraph (5)(B), 

9 the applicable percentage is equal to 

10 25 percent; and 

11 ‘‘(II) if the State is any other 

12 State, the applicable percentage is 50 

13 percent. 

14 ‘‘(ii) SUBSEQUENT FISCAL YEARS IN

15 WHICH THE PERCENTAGE OF UNINSURED

16 DECREASES.—In the case of any fiscal 

17 year after the first fiscal year described in 

18 subparagraph (C) with respect to a State, 

19 if the Secretary determines on the basis of 

20 the most recent American Community Sur21 vey of the Bureau of the Census, that the 

22 percentage of uncovered individuals resid23 ing in the State is less than the percentage 

24 of such individuals determined for the 

25 State for the preceding fiscal year— 


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1 ‘‘(I) if the State is a low DSH 

2 State described in paragraph (5)(B), 

3 the applicable percentage is equal to 

4 the product of the amount by which 

5 the percentage of uncovered individ6 uals for the fiscal year is less than the 

7 percentage of such individuals for the 

8 preceding fiscal year and 17.5 per9 cent; and 

10 ‘‘(II) if the State is any other 

11 State, the applicable percentage is 

12 equal to the product of the amount by 

13 which the percentage of uncovered in14 dividuals for the fiscal year is less 

15 than the percentage of such individ16 uals for the preceding fiscal year and 

17 35 percent. 

18 ‘‘(C) FISCAL YEAR DESCRIBED.—For pur19 poses of subparagraph (A), the fiscal year de20 scribed in this subparagraph with respect to a 

21 State is the first fiscal year that occurs after 

22 fiscal year 2012 for which the Secretary deter23 mines, on the basis of the most recent Amer24 ican Community Survey of the Bureau of the 

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1 viduals residing in the State is at least 50 per2 cent less than the percentage of such individ3 uals determined for the State for fiscal year 

4 2009. 

5 ‘‘(D) EXCLUSION OF PORTIONS DIVERTED

6 FOR COVERAGE EXPANSIONS.—For purposes of 

7 applying the applicable percentage reduction 

8 under subparagraph (A) to the DSH allotment 

9 for a State for a fiscal year, the DSH allotment 

10 for a State that would be determined under this 

11 subsection for the State for the fiscal year with12 out the application of this paragraph (and prior 

13 to any such reduction) shall not include any 

14 portion of the allotment for which the Secretary 

15 has approved the State’s diversion to the costs 

16 of providing medical assistance or other health 

17 benefits coverage under a waiver that is in ef18 fect on July 2009. 

19 ‘‘(E) MINIMUM ALLOTMENT.—In no event 

20 shall the DSH allotment determined for a State 

21 in accordance with this paragraph for fiscal 

22 year 2013 or any succeeding fiscal year be less 

23 than the amount equal to 35 percent of the 

24 DSH allotment determined for the State for fis25 cal year 2012 under this subsection (and after 


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1 the application of this paragraph, if applicable), 

2 increased by the percentage change in the con3 sumer price index for all urban consumers (all 

4 items, U.S. city average) for each previous fis5 cal year occurring before the fiscal year. 

6 ‘‘(F) UNCOVERED INDIVIDUALS.—In this 

7 paragraph, the term ‘uncovered individuals’ 

8 means individuals with no health insurance (as 

9 defined in section 2791 of the Public Health 

10 Service Act) at any time during a year.’’. 

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

12 subsection (a) take effect on October 1, 2011. 

13 PART VII—DUAL ELIGIBLES 

14 SEC. 1661. 5-YEAR PERIOD FOR DEMONSTRATION 

15 PROJECTS. 

16 (a) IN GENERAL.—Section 1915(h) of the Social Se17 curity Act (42 U.S.C. 1396n(h)) is amended— 

18 (1) by inserting ‘‘(1)’’ after ‘‘(h)’’; 

19 (2) by inserting ‘‘, or a waiver described in 

20 paragraph (2)’’ after ‘‘(e)’’; and 

21 (3) by adding at the end the following new 

22 paragraph: 

23 ‘‘(2)(A) Notwithstanding subsections (c)(3) and (d) 

24 (3), any waiver under subsection (b), (c), or (d), or a waiv25 er under section 1115, that provides medical assistance 


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1 for dual eligible individuals (including any such waivers 

2 under which non dual eligible individuals may be enrolled 

3 in addition to dual eligible individuals) may be conducted 

4 for a period of 5 years and, upon the request of the State, 

5 may be extended for additional 5-year periods unless the 

6 Secretary determines that for the previous waiver period 

7 the conditions for the waiver have not been met or it would 

8 no longer be cost-effective and efficient, or consistent with 

9 the purposes of this title, to extend the waiver. 

10 ‘‘(B) In this paragraph, the term ‘dual eligible indi11 vidual’ means an individual who is entitled to, or enrolled 

12 for, benefits under part A of title XVIII, or enrolled for 

13 benefits under part B of title XVIII, and is eligible for 

14 medical assistance under the State plan under this title 

15 or under a waiver of such plan.’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) Section 1915 of such Act (42 U.S.C. 

18 1396n) is amended— 

19 (A) in subsection (b), by adding at the end 

20 the following new sentence: ‘‘Subsection (h)(2) 

21 shall apply to a waiver under this subsection.’’; 

22 (B) in subsection (c)(3), in the second sen23 tence, by inserting ‘‘(other than a waiver de24 scribed in subsection (h)(2))’’ after ‘‘A waiver 

25 under this subsection’’; 


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1 (C) in subsection (d)(3), in the second sen2 tence, by inserting ‘‘(other than a waiver de3 scribed in subsection (h)(2))’’ after ‘‘A waiver 

4 under this subsection’’. 

5 (2) Section 1115 of such Act (42 U.S.C. 1315) 

6 is amended— 

7 (A) in subsection (e)(2), by inserting ‘‘(5 

8 years, in the case of a waiver described in sec9 tion 1915(h)(2))’’ after ‘‘3 years’’; and 

10 (B) in subsection (f)(6), by inserting ‘‘(5 

11 years, in the case of a waiver described in sec12 tion 1915(h)(2))’’ after ‘‘3 years’’. 

13 SEC. 1662. PROVIDING FEDERAL COVERAGE AND PAYMENT 

14 COORDINATION FOR LOW-INCOME MEDICARE 

15 BENEFICIARIES. 

16 (a) ESTABLISHMENT OF FEDERAL COORDINATED

17 HEALTH CARE OFFICE.— 

18 (1) IN GENERAL.—Not later than March 1, 

19 2010, the Secretary of Health and Human Services 

20 (in this section referred to as the ‘‘Secretary’’) shall 

21 establish a Federal Coordinated Health Care Office. 

22 (2) ESTABLISHMENT AND REPORTING TO CMS

23 ADMINISTRATOR.—The Federal Coordinated Health 

24 Care Office— 


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1 (A) shall be established within the Centers 

2 for Medicare & Medicaid Services; and 

3 (B) have as the Office a Director who shall 

4 be appointed by, and be in direct line of author5 ity to, the Administrator of the Centers for 

6 Medicare & Medicaid Services. 

7 (b) PURPOSE.—The purpose of the Federal Coordi8 nated Health Care Office is to bring together officers and 

9 employees of the Medicare and Medicaid programs at the 

10 Centers for Medicare & Medicaid Services in order to— 

11 (1) more effectively integrate benefits under the 

12 Medicare program under title XVIII of the Social 

13 Security Act and the Medicaid program under title 

14 XIX of such Act; and 

15 (2) improve the coordination between the Fed16 eral Government and States for individuals eligible 

17 for benefits under both such programs in order to 

18 ensure that such individuals get full access to the 

19 items and services to which they are entitled under 

20 titles XVIII and XIX of the Social Security Act. 

21 (c) GOALS.—The goals of the Federal Coordinated 

22 Health Care Office are as follows: 

23 (1) Providing dual eligible individuals full ac24 cess to the benefits to which such individuals are en25 titled under the Medicare and Medicaid programs. 


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1 (2) Simplifying the processes for dual eligible 

2 individuals to access the items and services they are 

3 entitled to under the Medicare and Medicaid pro4 grams. 

5 (3) Improving the quality of health care and 

6 long-term services for dual eligible individuals. 

7 (4) Increasing dual eligible individuals’ under8 standing of and satisfaction with coverage under the 

9 Medicare and Medicaid programs. 

10 (5) Eliminating regulatory conflicts between 

11 rules under the Medicare and Medicaid programs. 

12 (6) Improving care continuity and ensuring safe 

13 and effective care transitions for dual eligible indi14 viduals. 

15 (7) Eliminating cost-shifting between the Medi16 care and Medicaid program and among related 

17 health care providers. 

18 (8) Improving the quality of performance of 

19 providers of services and suppliers under the Medi20 care and Medicaid programs. 

21 (d) SPECIFIC RESPONSIBILITIES.—The specific re22 sponsibilities of the Federal Coordinated Health Care Of23 fice are as follows: 

24 (1) Providing States, specialized MA plans for 

25 special needs individuals (as defined in section 


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1 1859(b)(6) of the Social Security Act (42 U.S.C. 

2 1395w–28(b)(6))), physicians and other relevant en3 tities or individuals with the education and tools nec4 essary for developing programs that align benefits 

5 under the Medicare and Medicaid programs for dual 

6 eligible individuals. 

7 (2) Supporting State efforts to coordinate and 

8 align acute care and long-term care services for dual 

9 eligible individuals with other items and services fur10 nished under the Medicare program. 

11 (3) Providing support for coordination of con12 tracting and oversight by States and the Centers for 

13 Medicare & Medicaid Services with respect to the in14 tegration of the Medicare and Medicaid programs in 

15 a manner that is supportive of the goals described 

16 in paragraph (3). 

17 (4) To consult and coordinate with the Medi18 care Payment Advisory Commission established 

19 under section 1805 of the Social Security Act (42 

20 U.S.C. 1395b–6) and the Medicaid and CHIP Pay21 ment and Access Commission established under sec22 tion 1900 of such Act (42 U.S.C. 1396) with respect 

23 to policies relating to the enrollment in, and provi24 sion of, benefits to dual eligible individuals under the 

25 Medicare program under title XVIII of the Social 


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1 Security Act and the Medicaid program under title 

2 XIX of such Act. 

3 (e) REPORT.—The Secretary shall, as part of the 

4 budget transmitted under section 1105(a) of title 31, 

5 United States Code, submit to Congress an annual report 

6 containing recommendations for legislation that would im7 prove care coordination and benefits for dual eligible indi8 viduals. 

9 (f) DUAL ELIGIBLE DEFINED.—In this section, the 

10 term ‘‘dual eligible individual’’ means an individual who 

11 is entitled to, or enrolled for, benefits under part A of title 

12 XVIII of the Social Security Act, or enrolled for benefits 

13 under part B of title XVIII of such Act, and is eligible 

14 for medical assistance under a State plan under title XIX 

15 of such Act or under a waiver of such plan. 

16 PART VIII—MEDICAID QUALITY 

17 SEC. 1671. ADULT HEALTH QUALITY MEASURES. 

18 Title XI of the Social Security Act (42 U.S.C. 1301 

19 et seq.), as amended by section 401 of the Children’s 

20 Health Insurance Program Reauthorization Act of 2009 

21 (Public Law 111-3), is amended by inserting after section 

22 1139A the following new section: 

23 ‘‘SEC. 1139B. ADULT HEALTH QUALITY MEASURES. 

24 ‘‘(a) DEVELOPMENT OF CORE SET OF HEALTH CARE

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1 FITS UNDER MEDICAID.—The Secretary shall identify 

2 and publish a recommended core set of adult health qual3 ity measures for Medicaid eligible adults in the same man4 ner as the Secretary identifies and publishes a core set 

5 of child health quality measures under section 1139A, in6 cluding with respect to identifying and publishing existing 

7 adult health quality measures that are in use under public 

8 and privately sponsored health care coverage arrange9 ments, or that are part of reporting systems that measure 

10 both the presence and duration of health insurance cov11 erage over time, that may be applicable to Medicaid eligi12 ble adults. 

13 ‘‘(b) DEADLINES.— 

14 ‘‘(1) RECOMMENDED MEASURES.—Not later 

15 than January 1, 2011, the Secretary shall identify 

16 and publish for comment a recommended core set of 

17 adult health quality measures for Medicaid eligible 

18 adults. 

19 ‘‘(2) DISSEMINATION.—Not later than January 

20 1, 2012, the Secretary shall publish an initial core 

21 set of adult health quality measures that are appli22 cable to Medicaid eligible adults. 

23 ‘‘(3) STANDARDIZED REPORTING.—Not later 

24 than January 1, 2013, the Secretary, in consultation 

25 with States, shall develop a standardized format for 


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1 reporting information based on the initial core set of 

2 adult health quality measures and create procedures 

3 to encourage States to use such measures to volun4 tarily report information regarding the quality of 

5 health care for Medicaid eligible adults. 

6 ‘‘(4) REPORTS TO CONGRESS.—Not later than 

7 January 1, 2014, and every 3 years thereafter, the 

8 Secretary shall include in the report to Congress re9 quired under section 1139A(a)(6) information simi10 lar to the information required under that section 

11 with respect to the measures established under this 

12 section. 

13 ‘‘(5) ESTABLISHMENT OF MEDICAID QUALITY

14 MEASUREMENT PROGRAM.— 

15 ‘‘(A) IN GENERAL.—Not later than 12 

16 months after the release of the recommended 

17 core set of adult health quality measures under 

18 paragraph (1)), the Secretary shall establish a 

19 Medicaid Quality Measurement Program in the 

20 same manner as the Secretary establishes the 

21 pediatric quality measures program under sec22 tion 1139A(b). The aggregate amount awarded 

23 by the Secretary for grants and contracts for 

24 the development, testing, and validation of 

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1 ures under such program shall equal the aggre2 gate amount awarded by the Secretary for 

3 grants under section 1139A(b)(4)(A) 

4 ‘‘(B) REVISING, STRENGTHENING, AND IM5 PROVING INITIAL CORE MEASURES.—Beginning 

6 not later than 24 months after the establish7 ment of the Medicaid Quality Measurement 

8 Program, and annually thereafter, the Sec9 retary shall publish recommended changes to 

10 the initial core set of adult health quality meas11 ures that shall reflect the results of the testing, 

12 validation, and consensus process for the devel13 opment of adult health quality measures. 

14 ‘‘(c) CONSTRUCTION.—Nothing in this section shall 

15 be construed as supporting the restriction of coverage, 

16 under title XIX or XXI or otherwise, to only those services 

17 that are evidence-based, or in anyway limiting available 

18 services. 

19 ‘‘(d) ANNUAL STATE REPORTS REGARDING STATE20 SPECIFIC QUALITY OF CARE MEASURES APPLIED UNDER

21 MEDICAID.— 

22 ‘‘(1) ANNUAL STATE REPORTS.—Each State 

23 with a State plan or waiver approved under title 

24 XIX shall annually report (separately or as part of 


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1 the annual report required under section 1139A(c)), 

2 to the Secretary on the— 

3 ‘‘(A) State-specific adult health quality 

4 measures applied by the State under the such 

5 plan, including measures described in sub6 section (a)(5); and 

7 ‘‘(B) State-specific information on the 

8 quality of health care furnished to Medicaid eli9 gible adults under such plan, including informa10 tion collected through external quality reviews 

11 of managed care organizations under section 

12 1932 and benchmark plans under section 1937. 

13 ‘‘(2) PUBLICATION.—Not later than September 

14 30, 2014, and annually thereafter, the Secretary 

15 shall collect, analyze, and make publicly available the 

16 information reported by States under paragraph (1). 

17 ‘‘(e) APPROPRIATION.—Out of any funds in the 

18 Treasury not otherwise appropriated, there is appro19 priated for each of fiscal years 2010 through 2014, 

20 $60,000,000 for the purpose of carrying out this section. 

21 Funds appropriated under this subsection shall remain 

22 available until expended.’’. 


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1 SEC. 1672. PAYMENT ADJUSTMENT FOR HEALTH CARE-AC2 QUIRED CONDITIONS. 

3 (a) IN GENERAL.—The Secretary of Health and 

4 Human Services (in this subsection referred to as the 

5 ‘‘Secretary’’) shall conduct surveys to identify current 

6 State practices that prohibit payment for health care-ac7 quired conditions and shall promulgate regulations, to be 

8 effective as of July 1, 2011, to prohibit payments to States 

9 under section 1903 of the Social Security Act for any 

10 amounts expended for providing medical assistance for 

11 such conditions. Such regulations shall ensure that a pro12 hibition on payment for health care-acquired conditions 

13 shall not affect care or services provided to a Medicaid 

14 beneficiary. 

15 (b) HEALTH CARE-ACQUIRED CONDITION.—In this 

16 section. the term ‘‘health care-acquired condition’’ means 

17 a medical condition for which an individual was diagnosed 

18 that could be identified by a secondary diagnostic code de19 scribed in section 1886(d)(4)(D)(iv) of the Social Security 

20 Act (42 U.S.C. 1395ww(d)(4)(D)(iv)). 

21 (c) MEDICARE PROVISIONS.—In carrying out this 

22 section, the Secretary may elect to apply to State plans 

23 (or waivers) under title XIX of the Social Security Act 

24 the regulations promulgated pursuant to section 

25 1886(d)(4)(D) of such Act (42 U.S.C. 1395ww(d)(4)(D)) 

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1 ence of a secondary diagnosis code specified by the Sec2 retary in such regulations. The Secretary may exclude cer3 tain conditions identified under title XVIII of the Social 

4 Security Act for non-payment under title XIX of such Act 

5 when the Secretary finds the inclusion of such conditions 

6 to be inapplicable to beneficiaries under title XIX. 

7 SEC. 1673. DEMONSTRATION PROJECT TO EVALUATE INTE8 GRATED CARE AROUND A HOSPITALIZATION. 

9 (a) AUTHORITY TO CONDUCT PROJECT.—The Sec10 retary of Health and Human Services (in this section re11 ferred to as the ‘‘Secretary’’) shall establish a demonstra12 tion project under title XIX of the Social Security Act to 

13 evaluate the use of bundled payments for the provision of 

14 integrated care for a Medicaid beneficiary— 

15 (1) with respect to an episode of care that in16 cludes a hospitalization; and 

17 (2) for concurrent physicians services provided 

18 during a hospitalization. 

19 (b) REQUIREMENTS.—The demonstration project 

20 shall be conducted in accordance with the following: 

21 (1) The demonstration project shall be con22 ducted in up to 8 States, determined by the Sec23 retary based on consideration of the potential to 

24 lower costs under the Medicaid program while im25 proving care for Medicaid beneficiaries. A State seVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00416 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 lected to participate in the demonstration project 

2 may target the demonstration project to particular 

3 categories of beneficiaries, beneficiaries with par4 ticular diagnoses, or particular geographic regions of 

5 the State, but the Secretary shall insure that, as a 

6 whole, the demonstration project is, to the greatest 

7 extent possible, representative of the demographic 

8 and geographic composition of Medicaid beneficiaries 

9 nationally. 

10 (2) The demonstration project shall focus on 

11 conditions where there is evidence of an opportunity 

12 for providers of services and suppliers to improve the 

13 quality of care furnished to Medicaid beneficiaries 

14 while reducing total expenditures under the State 

15 Medicaid programs selected to participate, as deter16 mined by the Secretary. 

17 (3) A State selected to participate in the dem18 onstration project shall specify the 1 or more epi19 sodes of care the State proposes to address in the 

20 project, the services to be included in the bundled 

21 payments, and the rationale for the selection of such 

22 episodes of care and services. The Secretary may 

23 modify the episodes of care as well as the services 

24 to be included in the bundled payments prior to or 

25 after approving the project. The Secretary may also 


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1 vary such factors among the different States partici2 pating in the demonstration project. 

3 (4) The Secretary shall ensure that payments 

4 made under the demonstration project are adjusted 

5 for severity of illness and other characteristics of 

6 Medicaid beneficiaries within a category or having a 

7 diagnosis targeted as part of the demonstration 

8 project. States shall ensure that Medicaid bene9 ficiaries are not liable for any additional cost sharing 

10 than if their care had not been subject to payment 

11 under the demonstration project. 

12 (5) Hospitals participating in the demonstration 

13 project shall have or establish robust discharge plan14 ning programs to ensure that Medicaid beneficiaries 

15 requiring post-acute care are appropriately placed in, 

16 or have ready access to, post-acute care settings. 

17 (6) The Secretary and each State selected to 

18 participate in the demonstration project shall ensure 

19 that the demonstration project does not result in the 

20 Medicaid beneficiaries whose care is subject to pay21 ment under the demonstration project being pro22 vided with less items and services for which medical 

23 assistance is provided under the State Medicaid pro24 gram than the items and services for which medical 

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1 ficiaries under the State Medicaid program in the 

2 absence of the demonstration project. 

3 (c) WAIVER OF PROVISIONS.—Notwithstanding sec4 tion 1115(a) of the Social Security Act (42 U.S.C. 

5 1315(a)), the Secretary may waive such provisions of titles 

6 XIX, XVIII, and XI of that Act as may be necessary to 

7 accomplish the goals of the demonstration, ensure bene8 ficiary access to acute and post-acute care, and maintain 

9 quality of care. 

10 (d) EVALUATION AND REPORT.— 

11 (1) DATA.—Each State selected to participate 

12 in the demonstration project under this section shall 

13 provide to the Secretary, in such form and manner 

14 as the Secretary shall specify, relevant data nec15 essary to monitor outcomes, costs, and quality, and 

16 evaluate the rationales for selection of the episodes 

17 of care and services specified by States under sub18 section (b)(3). 

19 (2) REPORT.—Not later than 1 year after the 

20 conclusion of the demonstration project, the Sec21 retary shall submit a report to Congress on the re22 sults of the demonstration project. 


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1 SEC. 1674. MEDICAID GLOBAL PAYMENT SYSTEM DEM2 ONSTRATION PROJECT. 

3 (a) IN GENERAL.—The Secretary of Health and 

4 Human Services (referred to in this section as the ‘‘Sec5 retary’’) shall, in coordination with the Innovation Center 

6 (as established under section 3021), establish the Med7 icaid Global Payment System Demonstration Project 

8 under which a participating State shall adjust the pay9 ments made to an eligible safety net hospital system or 

10 network from a fee-for-service payment structure to a 

11 global capitated payment model. 

12 (b) DURATION AND SCOPE.—The demonstration 

13 project conducted under this section shall operate during 

14 a period of fiscal years 2010 through 2012. The Secretary 

15 shall select not more than 5 States to participate in the 

16 demonstration project. 

17 (c) ELIGIBLE SAFETY NET HOSPITAL SYSTEM OR

18 NETWORK.—For purposes of this section, the term ‘‘eligi19 ble safety net hospital system or network’’ means a large, 

20 safety net hospital system or network (as defined by the 

21 Secretary) that operates within a State selected by the 

22 Secretary under subsection (b). 

23 (d) EVALUATION.— 

24 (1) TESTING.—The Innovation Center shall test 

25 and evaluate the demonstration project conducted 

26 under this section to examine any changes in health 


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1 care quality outcomes and spending by the eligible 

2 safety net hospital systems or networks. 

3 (2) BUDGET NEUTRALITY.—During the testing 

4 period under paragraph (1), any budget neutrality 

5 requirements under section 1115A(b)(3) of the So6 cial Security Act (as added by section 3021) shall 

7 not be applicable. 

8 (3) MODIFICATION.—During the testing period 

9 under paragraph (1), the Secretary may, in the Sec10 retary’s discretion, modify or terminate the dem11 onstration project conducted under this section. 

12 (e) REPORT.—Not later than 12 months after the 

13 date of completion of the demonstration project under this 

14 section, the Secretary shall submit to Congress a report 

15 containing the results of the evaluation and testing con16 ducted under subsection (d), together with recommenda17 tions for such legislation and administrative action as the 

18 Secretary determines appropriate. 

19 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

20 are authorized to be appropriated such sums as are nec21 essary to carry out this section. 

22 SEC. 1675. PEDIATRIC ACCOUNTABLE CARE ORGANIZATION 

23 DEMONSTRATION PROJECT. 

24 (a) IN GENERAL.—The Secretary of Health and 

25 Human Services (referred to in this section as the ‘‘SecVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00421 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 retary’’) shall establish the Pediatric Accountable Care 

2 Organization Demonstration Project to authorize a par3 ticipating State to allow pediatric medical providers that 

4 meet specified requirements to be recognized as an ac5 countable care organization for purposes of receiving in6 centive payments (as described under subsection (d)), in 

7 the same manner as an accountable care organization is 

8 recognized and provided with incentive payments under 

9 section 1899 of the Social Security Act (as added by sec10 tion 3022). 

11 (b) APPLICATION.—A State that desires to partici12 pate in the demonstration project under this section shall 

13 submit to the Secretary an application at such time, in 

14 such manner, and containing such information as the Sec15 retary may require. 

16 (c) REQUIREMENTS.— 

17 (1) PERFORMANCE GUIDELINES.—The Sec18 retary, in consultation with the States and pediatric 

19 providers, shall establish guidelines to ensure that 

20 the quality of care delivered to individuals by a pro21 vider recognized as an accountable care organization 

22 under this section is not less than the quality of care 

23 that would have otherwise been provided to such in24 dividuals. 


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1 (2) SAVINGS REQUIREMENT.—A participating 

2 State, in consultation with the Secretary, shall es3 tablish an annual minimal level of savings in expend4 itures for items and services covered under the Med5 icaid program under title XIX of the Social Security 

6 Act and the CHIP program under title XXI of such 

7 Act that must be reached by an accountable care or8 ganization in order for such organization to receive 

9 an incentive payment under subsection (d). 

10 (d) INCENTIVE PAYMENT.—An accountable care or11 ganization that meets the performance guidelines estab12 lished by the Secretary under subsection (c)(1) and 

13 achieves savings greater than the annual minimal savings 

14 level established by the State under subsection (c)(2) shall 

15 receive an incentive payment for such year equal to a por16 tion (as determined appropriate by the Secretary) of the 

17 amount of such excess savings. The Secretary may estab18 lish an annual cap on incentive payments for an account19 able care organization. 

20 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated such sums as are nec22 essary to carry out this section. 


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1 SEC. 1676. MEDICAID EMERGENCY PSYCHIATRIC DEM2 ONSTRATION PROJECT. 

3 (a) AUTHORITY TO CONDUCT DEMONSTRATION

4 PROJECT.—The Secretary of Health and Human Services 

5 (in this section referred to as the ‘‘Secretary’’) shall estab6 lish a demonstration project for up to 8 States under 

7 which an eligible State (as described in subsection (c)) 

8 shall provide reimbursement under the State Medicaid 

9 plan under title XIX of the Social Security Act to an insti10 tution for mental diseases (as defined in section 1905(i) 

11 of such Act) that is not publicly owned or operated and 

12 that is subject to the requirements of section 1867 of the 

13 Social Security Act (42 U.S.C. 1395dd) for the provision 

14 of medical assistance available under such plan to an indi15 vidual who— 

16 (1) has attained age 21, but has not attained 

17 age 65; 

18 (2) is eligible for medical assistance under such 

19 plan; and 

20 (3) requires such medical assistance to stabilize 

21 a psychiatric emergency medical condition, as evi22 denced by the expression of suicidal or homicidal 

23 thoughts or gestures determined dangerous to the 

24 individual or others. 

25 (b) IN-STAY REVIEW.—The Secretary shall establish 

26 a mechanism for in-stay review to determine whether or 


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1 not the patient has been stabilized (as defined in sub2 section (h)(5)). This mechanism shall commence before 

3 the third day of the inpatient stay. States participating 

4 in the demonstration project may manage the provision 

5 of these benefits under the project through utilization re6 view, authorization, or management practices, or the ap7 plication of medical necessity and appropriateness criteria 

8 applicable to behavioral health. 

9 (c) ELIGIBLE STATE DEFINED.— 

10 (1) APPLICATION.—Upon approval of an appli11 cation submitted by a State described in paragraph 

12 (2), the State shall be an eligible State for purposes 

13 of conducting a demonstration project under this 

14 section. 

15 (2) STATE DESCRIBED.—States shall be se16 lected by the Secretary in a manner so as to provide 

17 geographic diversity on the basis of the application 

18 to conduct a demonstration project under this sec19 tion submitted by such States. 

20 (d) LENGTH OF DEMONSTRATION PROJECT.—The 

21 demonstration project established under this section shall 

22 be conducted for a period of 3 consecutive years. 

23 (e) LIMITATIONS ON FEDERAL FUNDING.— 

24 (1) APPROPRIATION.— 


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1 (A) IN GENERAL.—Out of any funds in the 

2 Treasury not otherwise appropriated, there is 

3 appropriated to carry out this section, 

4 $75,000,000 for fiscal year 2010. 

5 (B) BUDGET AUTHORITY.—Subparagraph 

6 (A) constitutes budget authority in advance of 

7 appropriations Act and represents the obliga8 tion of the Federal Government to provide for 

9 the payment of the amounts appropriated under 

10 that subparagraph. 

11 (2) 3-YEAR AVAILABILITY.—Funds appro12 priated under paragraph (1) shall remain available 

13 for obligation through December 31, 2012. 

14 (3) LIMITATION ON PAYMENTS.—In no case 

15 may— 

16 (A) the aggregate amount of payments 

17 made by the Secretary to eligible States under 

18 this section exceed $75,000,000; or 

19 (B) payments be provided by the Secretary 

20 under this section after December 31, 2012. 

21 (4) FUNDS ALLOCATED TO STATES.—The Sec22 retary shall allocate funds to eligible States based on 

23 their applications and the availability of funds. 

24 (5) PAYMENTS TO STATES.—The Secretary 

25 shall pay to each eligible State, from its allocation 


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1 under paragraph (4), an amount each quarter equal 

2 to the Federal medical assistance percentage of ex3 penditures in the quarter for medical assistance de4 scribed in subsection (a). 

5 (f) REPORTS.— 

6 (1) ANNUAL PROGRESS REPORTS.—The Sec7 retary shall submit annual reports to Congress on 

8 the progress of the demonstration project conducted 

9 under this section. 

10 (2) FINAL REPORT AND RECOMMENDATION.— 

11 An evaluation should be conducted of the demonstra12 tion project’s impact on the functioning of the health 

13 and mental health service system and on individuals 

14 enrolled in the Medicaid program. This evaluation 

15 should include collection of baseline data for one16 year prior to the initiation of the demonstration 

17 project as well as collection of data from matched 

18 comparison states not participating in the dem19 onstration. The evaluation measures shall include 

20 the following: 

21 (A) A determination, by State, as to 

22 whether the demonstration project resulted in 

23 increased access to inpatient mental health 

24 services under the Medicaid program and 

25 whether average length of stays were longer (or 


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1 shorter) for individuals admitted under the 

2 demonstration project compared with individ3 uals otherwise admitted in comparison sites. 

4 (B) An analysis by State, regarding wheth5 er the demonstration project produced a signifi6 cant reduction in emergency room visits for in7 dividuals eligible for assistance under the Med8 icaid program or in the duration of emergency 

9 room lengths of stay. 

10 (C) An assessment of discharge planning 

11 by participating hospitals that ensures access to 

12 further (non-emergency) inpatient or residential 

13 care as well as continuity of care for those dis14 charged to outpatient care. 

15 (D) An assessment of the impact of the 

16 demonstration project on the costs of the full 

17 range of mental health services (including inpa18 tient, emergency and ambulatory care) under 

19 the plan as contrasted with the comparison 

20 areas. 

21 (E) Data on the percentage of consumers 

22 with Medicaid coverage who are admitted to in23 patient facilities as a result of the demonstra24 tion project as compared to those admitted to 

25 these same facilities through other means. 


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1 (F) A recommendation regarding whether 

2 the demonstration project should be continued 

3 after December 31, 2012, and expanded on a 

4 national basis. 

5 (g) WAIVER AUTHORITY.— 

6 (1) IN GENERAL.—The Secretary shall waive 

7 the limitation of subdivision (B) following paragraph 

8 (28) of section 1905(a) of the Social Security Act 

9 (42 U.S.C. 1396d(a)) (relating to limitations on pay10 ments for care or services for individuals under 65 

11 years of age who are patients in an institution for 

12 mental diseases) for purposes of carrying out the 

13 demonstration project under this section. 

14 (2) LIMITED OTHER WAIVER AUTHORITY.—The 

15 Secretary may waive other requirements of titles XI 

16 and XIX of the Social Security Act (including the 

17 requirements of sections 1902(a)(1) (relating to 

18 statewideness) and 1902(1)(10)(B) (relating to com19 parability)) only to extent necessary to carry out the 

20 demonstration project under this section. 


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1 PART IX—IMPROVEMENTS TO THE MEDICAID 

2 AND CHIP PAYMENT AND ACCESS COMMIS3 SION (MACPAC) 

4 SEC. 1681. MACPAC ASSESSMENT OF POLICIES AFFECTING 

5 ALL MEDICAID BENEFICIARIES. 

6 (a) IN GENERAL.—Section 1900 of the Social Secu7 rity Act (42 U.S.C. 1396) is amended— 

8 (1) in subsection (b)— 

9 (A) in paragraph (1)— 

10 (i) in the paragraph heading, by in11 serting ‘‘FOR ALL STATES’’ before ‘‘AND

12 ANNUAL’’; and 

13 (ii) in subparagraph (A), by striking 

14 ‘‘children’s’’; 

15 (iii) in subparagraph (B), by inserting 

16 ‘‘, the Secretary, and States’’ after ‘‘Con17 gress’’; 

18 (iv) in subparagraph (C), by striking 

19 ‘‘March 1’’ and inserting ‘‘March 15’’; and 

20 (v) in subparagraph (D), by striking 

21 ‘‘June 1’’ and inserting ‘‘June 15’’; 

22 (B) in paragraph (2)— 

23 (i) in subparagraph (A)— 

24 (I) in clause (i)— 


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1 (aa) by inserting ‘‘the effi2 cient provision of’’ after ‘‘expend3 itures for’’; and 

4 (bb) by striking ‘‘hospital, 

5 skilled nursing facility, physician, 

6 Federally-qualified health center, 

7 rural health center, and other 

8 fees’’ and inserting ‘‘payments to 

9 medical, dental, and health pro10 fessionals, hospitals, residential 

11 and long-term care providers, 

12 providers of home and commu13 nity based services, Federally14 qualified health centers and rural 

15 health clinics, managed care enti16 ties, and providers of other cov17 ered items and services’’; and 

18 (II) in clause (iii), by inserting 

19 ‘‘(including how such factors and 

20 methodologies enable such bene21 ficiaries to obtain the services for 

22 which they are eligible, affect provider 

23 supply, and affect providers that serve 

24 a disproportionate share of low-income 


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1 and other vulnerable populations)’’ 

2 after ‘‘beneficiaries’’; 

3 (ii) by redesignating subparagraphs 

4 (B) and (C) as subparagraphs (F) and 

5 (H), respectively; 

6 (iii) by inserting after subparagraph 

7 (A), the following: 

8 ‘‘(B) ELIGIBILITY POLICIES.—Medicaid 

9 and CHIP eligibility policies, including a deter10 mination of the degree to which Federal and 

11 State policies provide health care coverage to 

12 needy populations. 

13 ‘‘(C) ENROLLMENT AND RETENTION PROC14 ESSES.—Medicaid and CHIP enrollment and 

15 retention processes, including a determination 

16 of the degree to which Federal and State poli17 cies encourage the enrollment of individuals 

18 who are eligible for such programs and screen 

19 out individuals who are ineligible, while mini20 mizing the share of program expenses devoted 

21 to such processes. 

22 ‘‘(D) COVERAGE POLICIES.—Medicaid and 

23 CHIP benefit and coverage policies, including a 

24 determination of the degree to which Federal 

25 and State policies provide access to the services 


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1 enrollees require to improve and maintain their 

2 health and functional status. 

3 ‘‘(E) QUALITY OF CARE.—Medicaid and 

4 CHIP policies as they relate to the quality of 

5 care provided under those programs, including 

6 a determination of the degree to which Federal 

7 and State policies achieve their stated goals and 

8 interact with similar goals established by other 

9 purchasers of health care services.’’; 

10 (iv) by inserting after subparagraph 

11 (F) (as redesignated by clause (ii) of this 

12 subparagraph), the following: 

13 ‘‘(G) INTERACTIONS WITH MEDICARE AND

14 MEDICAID.—Consistent with paragraph (11), 

15 the interaction of policies under Medicaid and 

16 the Medicare program under title XVIII, in17 cluding with respect to how such interactions 

18 affect access to services, payments, and dual el19 igible individuals.’’ and 

20 (v) in subparagraph (H) (as so redes21 ignated), by inserting ‘‘and preventive, 

22 acute, and long-term services and sup23 ports’’ after ‘‘barriers’’; 


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1 (C) by redesignating paragraphs (3) 

2 through (9) as paragraphs (4) through (10), re3 spectively; 

4 (D) by inserting after paragraph (2), the 

5 following new paragraph: 

6 ‘‘(3) RECOMMENDATIONS AND REPORTS OF

7 STATE-SPECIFIC DATA.—MACPAC shall— 

8 ‘‘(A) review national and State-specific 

9 Medicaid and CHIP data; and 

10 ‘‘(B) submit reports and recommendations 

11 to Congress, the Secretary, and States based on 

12 such reviews.’’; 

13 (E) in paragraph (4), as redesignated by 

14 subparagraph (C), by striking ‘‘or any other 

15 problems’’ and all that follows through the pe16 riod and inserting ‘‘, as well as other factors 

17 that adversely affect, or have the potential to 

18 adversely affect, access to care by, or the health 

19 care status of, Medicaid and CHIP bene20 ficiaries. MACPAC shall include in the annual 

21 report required under paragraph (1)(D) a de22 scription of all such areas or problems identi23 fied with respect to the period addressed in the 

24 report.’’; 


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1 (F) in paragraph (5), as so redesig2 nated,— 

3 (i) in the paragraph heading, by in4 serting ‘‘AND REGULATIONS’’ after ‘‘RE5 PORTS’’; and 

6 (ii) by striking ‘‘If’’ and inserting the 

7 following: 

8 ‘‘(A) CERTAIN SECRETARIAL REPORTS.— 

9 If’’; and 

10 (iii) in the second sentence, by insert11 ing ‘‘and the Secretary’’ after ‘‘appropriate 

12 committees of Congress’’; and 

13 (iv) by adding at the end the fol14 lowing: 

15 ‘‘(B) REGULATIONS.—MACPAC shall re16 view Medicaid and CHIP regulations and may 

17 comment through submission of a report to the 

18 appropriate committees of Congress and the 

19 Secretary, on any such regulations that affect 

20 access, quality, or efficiency of health care.’’; 

21 (G) in paragraph (10), as so redesignated, 

22 by inserting ‘‘, and shall submit with any rec23 ommendations, a report on the Federal and 

24 State-specific budget consequences of the rec25 ommendations’’ before the period; and 


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1 (H) by adding at the end the following: 

2 ‘‘(11) CONSULTATION AND COORDINATION

3 WITH MEDPAC.— 

4 ‘‘(A) IN GENERAL.—MACPAC shall regu5 larly consult with the Medicare Payment Advi6 sory Commission (in this paragraph referred to 

7 as ‘MedPAC’) established under section 1805 in 

8 carrying out its duties under this section, par9 ticularly with respect to the issues specified in 

10 paragraph (2) as they relate to those Medicaid 

11 beneficiaries who are dually eligible for Med12 icaid and the Medicare program under title 

13 XVIII, adult Medicaid beneficiaries (who are 

14 not dually eligible for Medicare), and bene15 ficiaries under Medicare. Responsibility for 

16 analysis of and recommendations to change 

17 Medicare policy regarding Medicare bene18 ficiaries, including Medicare beneficiaries who 

19 are dually eligible for Medicare and Medicaid, 

20 shall rest with MedPAC. 

21 ‘‘(B) INFORMATION SHARING.—MACPAC 

22 and MedPAC shall have access to deliberations 

23 and records of the other such entity, respec24 tively, upon the request of the other such enti25 ty. 


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1 ‘‘(12) CONSULTATION WITH STATES.— 

2 MACPAC shall regularly consult with States in car3 rying out its duties under this section, including 

4 with respect to developing processes for carrying out 

5 such duties, and shall ensure that input from States 

6 is taken into account and represented in MACPAC’s 

7 recommendations and reports. 

8 ‘‘(13) COORDINATE AND CONSULT WITH THE

9 FEDERAL COORDINATED HEALTH CARE OFFICE.— 

10 MACPAC shall coordinate and consult with the Fed11 eral Coordinated Health Care Office established 

12 under section 1662 of the America’s Healthy Future 

13 Act of 2009 before making any recommendations re14 garding dual eligible individuals. 

15 ‘‘(14) PROGRAMMATIC OVERSIGHT VESTED IN

16 THE SECRETARY.—MACPAC’s authority to make 

17 recommendations in accordance with this section 

18 shall not affect, or be considered to duplicate, the 

19 Secretary’s authority to carry out Federal respon20 sibilities with respect to Medicaid and CHIP.’’; 

21 (2) in subsection (c)(2)— 

22 (A) by striking subparagraphs (A) and (B) 

23 and inserting the following: 

24 ‘‘(A) IN GENERAL.—The membership of 

25 MACPAC shall include individuals who have 


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1 had direct experience as enrollees or parents or 

2 caregivers of enrollees in Medicaid or CHIP and 

3 individuals with national recognition for their 

4 expertise in Federal safety net health programs, 

5 health finance and economics, actuarial science, 

6 health plans and integrated delivery systems, 

7 reimbursement for health care, health informa8 tion technology, and other providers of health 

9 services, public health, and other related fields, 

10 who provide a mix of different professions, 

11 broad geographic representation, and a balance 

12 between urban and rural representation. 

13 ‘‘(B) INCLUSION.—The membership of 

14 MACPAC shall include (but not be limited to) 

15 physicians, dentists, and other health profes16 sionals, employers, third-party payers, and indi17 viduals with expertise in the delivery of health 

18 services. Such membership shall also include 

19 representatives of children, pregnant women, 

20 the elderly, individuals with disabilities, care21 givers, and dual eligible individuals, current or 

22 former representatives of State agencies respon23 sible for administering Medicaid, and current or 

24 former representatives of State agencies respon25 sible for administering CHIP.’’. 


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1 (3) in subsection (d)(2), by inserting ‘‘and 

2 State’’ after ‘‘Federal’’; 

3 (4) in subsection (e)(1), in the first sentence, by 

4 inserting ‘‘and, as a condition for receiving payments 

5 under sections 1903(a) and 2105(a), from any State 

6 agency responsible for administering Medicaid or 

7 CHIP,’’ after ‘‘United States’’; and 

8 (5) in subsection (f)— 

9 (A) in the subsection heading, by striking 

10 ‘‘AUTHORIZATION OF APPROPRIATIONS’’ and 

11 inserting ‘‘FUNDING’’; 

12 (B) in paragraph (1), by inserting ‘‘(other 

13 than for fiscal year 2010)’’ before ‘‘in the same 

14 manner’’; and 

15 (C) by adding at the end the following: 

16 ‘‘(3) FUNDING FOR FISCAL YEAR 2010.— 

17 ‘‘(A) IN GENERAL.—Out of any funds in 

18 the Treasury not otherwise appropriated, there 

19 is appropriated to MACPAC to carry out the 

20 provisions of this section for fiscal year 2010, 

21 $9,000,000. 

22 ‘‘(B) TRANSFER OF FUNDS.—Notwith23 standing section 2104(a)(13), from the 

24 amounts appropriated in such section for fiscal 

25 year 2010, $2,000,000 is hereby transferred 


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1 and made available in such fiscal year to 

2 MACPAC to carry out the provisions of this 

3 section. 

4 ‘‘(4) AVAILABILITY.—Amounts made available 

5 under paragraphs (2) and (3) to MACPAC to carry 

6 out the provisions of this section shall remain avail7 able until expended.’’. 

8 (b) CONFORMING MEDPAC AMENDMENTS.—Section 

9 1805(b) of the Social Security Act (42 U.S.C. 1395b– 

10 6(b)), is amended— 

11 (1) in paragraph (1)(C), by striking ‘‘March 1 

12 of each year (beginning with 1998)’’ and inserting 

13 ‘‘March 15’’; 

14 (2) in paragraph (1)(D), by inserting ‘‘, and 

15 (beginning with 2012) containing an examination of 

16 the topics described in paragraph (9), to the extent 

17 feasible’’ before the period; and 

18 (3) by adding at the end the following: 

19 ‘‘(9) REVIEW AND ANNUAL REPORT ON MED20 ICAID AND COMMERCIAL TRENDS.—The Commission 

21 shall review and report on aggregate trends in 

22 spending, utilization, and financial performance 

23 under the Medicaid program under title XIX and 

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1 tional basis, a significant portion of revenue or serv2 ices is associated with the Medicaid program. Where 

3 appropriate, the Commission shall conduct such re4 view in consultation with the Medicaid and CHIP 

5 Payment and Access Commission (MACPAC) estab6 lished under section 1900. 

7 ‘‘(10) COORDINATE AND CONSULT WITH THE

8 FEDERAL COORDINATED HEALTH CARE OFFICE.— 

9 The Commission shall coordinate and consult with 

10 the Federal Coordinated Health Care Office estab11 lished under section 1662 of the America’s Healthy 

12 Future Act of 2009 before making any recommenda13 tions regarding dual eligible individuals.’’. 

14 PART X—AMERICAN INDIANS AND ALASKA 

15 NATIVES 

16 SEC. 1691. SPECIAL RULES RELATING TO INDIANS. 

17 (a) NO COST-SHARING FOR INDIANS WITH INCOME

18 AT OR BELOW 300 PERCENT OF POVERTY ENROLLED IN

19 COVERAGE THROUGH A STATE EXCHANGE.—For provi20 sions prohibiting cost sharing for Indians enrolled in any 

21 qualified health benefits plan in the individual market 

22 through an exchange, see section 2247(d) of the Social 

23 Security Act. 

24 (b) PAYER OF LAST RESORT.—Nothing in this Act 

25 or the amendments made by this Act shall affect the right 


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1 of the United States, an Indian tribe, or a tribal organiza2 tion to recover reimbursement from third parties for the 

3 costs of health services in accordance with section 206 of 

4 the Indian Health Care Improvement Act (42 U.S.C. 

5 1621e). 

6 (c) FACILITATING ENROLLMENT OF INDIANS UNDER

7 THE EXPRESS LANE OPTION.—Section 

8 1902(e)(13)(F)(ii) of the Social Security Act (42 U.S.C. 

9 1396a(e)(13)(F)(ii)) is amended— 

10 (1) in the clause heading, by inserting ‘‘AND IN11 DIAN TRIBES AND TRIBAL ORGANIZATIONS’’ after 

12 ‘‘AGENCIES’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(IV) The Indian Health Service, 

15 an Indian Tribe, Tribal Organization, 

16 or Urban Indian Organization (as de17 fined in section 1139(c)).’’. 

18 (d) TECHNICAL CORRECTIONS.—Section 1139(c) of 

19 the Social Security Act (42 U.S.C. 1320b–9(c)) is amend20 ed by striking ‘‘In this section’’ and inserting ‘‘For pur21 poses of this section, title XIX, and title XXI’’. 


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1 SEC. 1692. ELIMINATION OF SUNSET FOR REIMBURSEMENT 

2 FOR ALL MEDICARE PART B SERVICES FUR3 NISHED BY CERTAIN INDIAN HOSPITALS AND 

4 CLINICS. 

5 (a) REIMBURSEMENT FOR ALL MEDICARE PART B 

6 SERVICES FURNISHED BY CERTAIN INDIAN HOSPITALS

7 AND CLINICS.—Section 1880(e)(1)(A) of the Social Secu8 rity Act (42 U.S.C. 1395qq(e)(1)(A)) is amended by strik9 ing ‘‘during the 5-year period beginning on’’ and inserting 

10 ‘‘on or after’’. 

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

12 this section shall apply to items or services furnished on 

13 or after January 1, 2010. 

14 Subtitle H—Addressing Health 

15 Disparities 

16 SEC. 1701. STANDARDIZED COLLECTION OF DATA. 

17 (a) UNIFORM CATEGORIES AND COLLECTION RE18 QUIREMENTS.— 

19 (1) APPLICATION OF OMB STANDARDS FOR

20 DATA COLLECTION AND CLASSIFICATION.—The Sec21 retary of Health and Human Services, in consulta22 tion with the Director of the Office of Personnel 

23 Management, the Secretary of Defense, the Sec24 retary of Veterans Affairs, and the head of other ap25 propriate Federal agencies, shall establish proce26 dures to ensure that, beginning January 1, 2011, all 


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1 data collected under a Federal health care program 

2 (as defined in section 1128B(f) of the Social Secu3 rity Act (42 U.S.C. 1320a–7b(f)) and under the 

4 health insurance program under chapter 89 of title 

5 5, United States Code, on race, ethnicity, sex, and 

6 primary language, complies with the following: 

7 (A) Office of Management and Budget Di8 rective 15 (Standards for the Classification of 

9 Federal Data on Race and Ethnicity). 

10 (B) Guidance for Federal agencies that 

11 collect or use aggregate data on race issued by 

12 the Office of Management and Budget. 

13 (C) Guidance for Federal agencies for the 

14 allocation of multiple race responses for use in 

15 civil rights monitoring and enforcement issued 

16 by the Office of Management and Budget. 

17 (2) ACCESS AND TREATMENT FOR INDIVIDUALS

18 WITH DISABILITIES.—Not later than January 1, 

19 2012, the Secretary of Health and Human Services, 

20 in consultation with the Director of the Office of 

21 Personnel Management, the Secretary of Defense, 

22 the Secretary of Veterans Affairs, and the head of 

23 other appropriate Federal agencies, shall establish 

24 procedures for the Administrator of the Centers on 

25 Medicare & Medicaid Services to collect data under 


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1 Federal health care programs (as so defined) and 

2 the health insurance program under chapter 89 of 

3 title 5, United States Code, in order to assess access 

4 to care and treatment for individuals with disabil5 ities. Such procedures shall include surveying health 

6 care providers to identify— 

7 (A) locations where individuals with dis8 abilities access primary, acute (including inten9 sive), and long-term care; 

10 (B) the number of providers with acces11 sible facilities and equipment to meet the needs 

12 of the individuals with disabilities; and 

13 (C) the number of employees of health care 

14 providers trained in disability awareness and 

15 patient care of individuals with disabilities. 

16 (b) MEDICAID CONFORMING AMENDMENTS.— 

17 (1) STATE PLAN REQUIREMENT.—Section 

18 1902(a) of the Social Security Act (42 U.S.C. 

19 1396a(a)), as amended by section 1601(d), is 

20 amended— 

21 (A) in paragraph (74), by striking ‘‘and’’ 

22 at the end; 

23 (B) in paragraph (75), by striking the pe24 riod at the end and inserting ‘‘; and’’; and 


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1 (C) by inserting after paragraph (75) the 

2 following new paragraph: 

3 ‘‘(76) provide that any data collected under the 

4 State plan meets the requirements of section 

5 1701(a) of the America’s Healthy Future Act of 

6 2009.’’. 

7 (c) CHIP CONFORMING AMENDMENTS.—Section 

8 2108(e) of the Social Security Act (42 U.S.C. 1397hh(e)) 

9 is amended by adding at the end the following new para10 graph: 

11 ‘‘(7) Data collected and reported in accordance 

12 with section 1701(a) of the America’s Healthy Fu13 ture Act of 2009, with respect to individuals enrolled 

14 in the State child health plan (and, in the case of 

15 enrollees under 19 years of age, their parents or 

16 legal guardians), including data regarding the pri17 mary language of such individuals, parents, and 

18 legal guardians.’’. 

19 SEC. 1702. REQUIRED COLLECTION OF DATA. 

20 (a) POPULATION SURVEYS AND QUALITY REPORT21 ING.—Beginning January 1, 2012: 

22 (1) FEDERALLY-FUNDED POPULATION SUR23 VEYS.—All federally funded population survey, in24 cluding Current Population Surveys and American 

25 Community Surveys conducted by the Bureau of 


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1 Labor Statistics and the Bureau of the Census, shall 

2 collect sufficient data relating to race, ethnicity, sex, 

3 primary language, and types of disability subgroups 

4 to generate statistically reliable estimates in studies 

5 comparing health disparities populations. 

6 (2) QUALITY REPORTING REQUIREMENTS.— 

7 Any reporting requirements imposed for purposes of 

8 measuring quality under a Federal health care pro9 gram (as defined in section 1128B(f) of the such 

10 Act (42 U.S.C. 1320a–7b(f)) or under the health in11 surance program under chapter 89 of title 5, United 

12 States Code, shall include requirements for the col13 lection of data on individuals receiving health care 

14 items or services under such programs by race, eth15 nicity, sex, primary language, and types of disability. 

16 (b) EXTENDING MEDICARE REQUIREMENT TO AD17 DRESS HEALTH DISPARITIES DATA COLLECTION TO

18 MEDICAID AND CHIP.—Title XIX of the Social Security 

19 Act (42 U.S.C. 1396 et seq.), as amended by section 1640 

20 is amended by adding at the end the following new section: 

21 ‘‘SEC. 1945. ADDRESSING HEALTH CARE DISPARITIES. 

22 ‘‘(a) EVALUATING DATA COLLECTION AP23 PROACHES.—The Secretary shall evaluate approaches for 

24 the collection of data under this title and title XXI, to 

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1 ing requirements and programs under this title and title 

2 XXI, that allow for the ongoing, accurate, and timely col3 lection and evaluation of data on disparities in health care 

4 services and performance on the basis of race, ethnicity, 

5 sex, primary language, and types of disability. In con6 ducting such evaluation, the Secretary shall consider the 

7 following objectives: 

8 ‘‘(1) Protecting patient privacy. 

9 ‘‘(2) Minimizing the administrative burdens of 

10 data collection and reporting on States, providers, 

11 and health plans participating under this title or 

12 title XXI. 

13 ‘‘(3) Improving program data under this title 

14 and title XXI on race, ethnicity, sex, primary lan15 guage, and types of disability. 

16 ‘‘(b) REPORTS TO CONGRESS.— 

17 ‘‘(1) REPORT ON EVALUATION.—Not later than 

18 18 months after the date of the enactment of this 

19 section, the Secretary shall submit to Congress a re20 port on the evaluation conducted under subsection 

21 (a). Such report shall, taking into consideration the 

22 results of such evaluation— 

23 ‘‘(A) identify approaches (including defin24 ing methodologies) for identifying and collecting 

25 and evaluating data on health care disparities 


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1 on the basis of race, ethnicity, sex, primary lan2 guage, and types of disability for the programs 

3 under this title and title XXI; and 

4 ‘‘(B) include recommendations on the most 

5 effective strategies and approaches to reporting 

6 HEDIS quality measures as required under sec7 tion 1852(e)(3) and other nationally recognized 

8 quality performance measures, as appropriate, 

9 on such bases. 

10 ‘‘(2) REPORTS ON DATA ANALYSES.—Not later 

11 than 4 years after the date of the enactment of this 

12 section, and 4 years thereafter, the Secretary shall 

13 submit to Congress a report that includes rec14 ommendations for improving the identification of 

15 health care disparities for beneficiaries under this 

16 title and under title XXI based on analyses of the 

17 data collected under subsection (c). 

18 ‘‘(c) IMPLEMENTING EFFECTIVE APPROACHES.—Not 

19 later than 24 months after the date of the enactment of 

20 this section, the Secretary shall implement the approaches 

21 identified in the report submitted under subsection (b)(1) 

22 for the ongoing, accurate, and timely collection and eval23 uation of data on health care disparities on the basis of 

24 race, ethnicity, sex, primary language, and types of dis25 ability.’’. 


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1 SEC. 1703. DATA SHARING AND PROTECTION. 

2 The Secretary of Health and Human Services, in con3 sultation with the Director of the Office of Personnel Man4 agement, the Secretary of Defense, the Secretary of Vet5 erans Affairs, and the head of other appropriate Federal 

6 agencies, shall establish procedures — 

7 (1) for sharing data collected under a Federal 

8 health care program (as defined in section 1128B(f) 

9 of the such Act (42 U.S.C. 1320a–7b(f)) or under 

10 the health insurance program under chapter 89 of 

11 title 5, United States Code, on race, ethnicity, sex 

12 primary language, and type of disability, measures 

13 relating to such data, and analyses of such data, 

14 with other relevant Federal and State agencies in15 cluding, within the Department of Health and 

16 Human Services, the Office of Minority Health, the 

17 Agency for Healthcare Research and Quality, the 

18 Centers for Disease Control and Prevention, and the 

19 Centers for Medicare & Medicaid Services; and 

20 (2) establish procedures to ensure that all ap21 propriate privacy and information security safe22 guards are used in the collection, analysis, and shar23 ing of such data. 


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1 SEC. 1704. INCLUSION OF INFORMATION ABOUT THE IM2 PORTANCE OF HAVING A HEALTH CARE 

3 POWER OF ATTORNEY IN TRANSITION PLAN4 NING FOR CHILDREN AGING OUT OF FOSTER 

5 CARE AND INDEPENDENT LIVING PROGRAMS. 

6 (a) TRANSITION PLANNING.—Section 475(5)(H) of 

7 the Social Security Act (42 U.S.C. 675(5)(H)) is amended 

8 by inserting ‘‘includes information about the importance 

9 of designating another individual to make health care 

10 treatment decisions on behalf of the child if the child be11 comes unable to participate in such decisions and the child 

12 does not have, or does not want, a relative who would oth13 erwise be authorized under State law to make such deci14 sions, and provides the child with the option to execute 

15 a health care power of attorney, health care proxy, or 

16 other similar document recognized under State law,’’ after 

17 ‘‘employment services,’’. 

18 (b) INDEPENDENT LIVING EDUCATION.—Section 

19 477(b)(3) of such Act (42 U.S.C. 677(b)(3)) is amended 

20 by adding at the end the following: 

21 ‘‘(K) A certification by the chief executive 

22 officer of the State that the State will ensure 

23 that an adolescent participating in the program 

24 under this section are provided with education 

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1 sions on behalf of the adolescent if the adoles2 cent becomes unable to participate in such deci3 sions and the adolescent does not have, or does 

4 not want, a relative who would otherwise be au5 thorized under State law to make such deci6 sions, whether a health care power of attorney, 

7 health care proxy, or other similar document is 

8 recognized under State law, and how to execute 

9 such a document if the adolescent wants to do 

10 so.’’. 

11 (c) HEALTH OVERSIGHT AND COORDINATION

12 PLAN.—Section 422(b)(15)(A) of such Act (42 U.S.C. 

13 622(b)(15)(A)) is amended— 

14 (1) in clause (v), by striking ‘‘and’’ at the end; 

15 and 

16 (2) by adding at the end the following: 

17 ‘‘(vii) steps to ensure that the compo18 nents of the transition plan development 

19 process required under section 475(5)(H) 

20 that relate to the health care needs of chil21 dren aging out of foster care, including the 

22 requirements to include options for health 

23 insurance, information about a health care 

24 power of attorney, health care proxy, or 

25 other similar document recognized under 


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1 State law, and to provide the child with the 

2 option to execute such a document, are 

3 met; and’’. 

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

5 this section take effect on October 1, 2010. 

6 Subtitle I—Maternal and Child 

7 Health Services 

8 SEC. 1801. MATERNAL, INFANT, AND EARLY CHILDHOOD 

9 HOME VISITING PROGRAMS. 

10 Title V of the Social Security Act (42 U.S.C. 701 

11 et seq.) is amended by adding at the end the following 

12 new section: 

13 ‘‘SEC. 511. MATERNAL, INFANT, AND EARLY CHILDHOOD 

14 HOME VISITING PROGRAMS. 

15 ‘‘(a) PURPOSES.—The purposes of this section are— 

16 ‘‘(1) to strengthen and improve the programs 

17 and activities carried out under this title; 

18 ‘‘(2) to improve coordination of services for at 

19 risk communities; and 

20 ‘‘(3) to identify and provide comprehensive 

21 services to improve outcomes for families who reside 

22 in at risk communities. 

23 ‘‘(b) REQUIREMENT FOR ALL STATES TO ASSESS

24 STATEWIDE NEEDS AND IDENTIFY AT RISK COMMU25 NITIES.— 


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1 ‘‘(1) IN GENERAL.—Not later than 6 months 

2 after the date of enactment of this section, each 

3 State shall, as a condition of receiving payments 

4 from an allotment for the State under section 502 

5 for fiscal year 2011, conduct a statewide needs as6 sessment (which shall be separate from the statewide 

7 needs assessment required under section 505(a)) 

8 that identifies— 

9 ‘‘(A) communities with concentrations of— 

10 ‘‘(i) premature birth, low-birth weight 

11 infants, and infant mortality, including in12 fant death due to neglect, or other indica13 tors of at-risk prenatal, maternal, newborn, 

14 or child health; 

15 ‘‘(ii) poverty; 

16 ‘‘(iii) crime; 

17 ‘‘(iv) domestic violence; 

18 ‘‘(v) high rates of high-school drop19 outs; 

20 ‘‘(vi) substance abuse; 

21 ‘‘(vii) unemployment; or 

22 ‘‘(viii) child maltreatment; 

23 ‘‘(B) the quality and capacity of existing 

24 programs or initiatives for early childhood home 

25 visitation in the State including— 


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1 ‘‘(i) the number and types of individ2 uals and families who are receiving services 

3 under such programs or initiatives; 

4 ‘‘(ii) the gaps in early childhood home 

5 visitation in the State; and 

6 ‘‘(iii) the extent to which such pro7 grams or initiatives are meeting the needs 

8 of eligible families described in subsection 

9 (k)(2); and 

10 ‘‘(C) the State’s capacity for providing 

11 substance abuse treatment and counseling serv12 ices to individuals and families in need of such 

13 treatment or services. 

14 ‘‘(2) COORDINATION WITH OTHER ASSESS15 MENTS.—In conducting the statewide needs assess16 ment required under paragraph (1), the State shall 

17 coordinate with, and take into account, other appro18 priate needs assessments conducted by the State, as 

19 determined by the Secretary, including the needs as20 sessment required under section 505(a) (both the 

21 most recently completed assessment and any such 

22 assessment in progress), the communitywide stra23 tegic planning and needs assessments conducted in 

24 accordance with section 640(g)(1)(C) of the Head 

25 Start Act, and the inventory of current unmet needs 


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1 and current community-based and prevention-fo2 cused programs and activities to prevent child abuse 

3 and neglect, and other family resource services oper4 ating in the State required under section 205(3) of 

5 the Child Abuse Prevention and Treatment Act. 

6 ‘‘(3) SUBMISSION TO THE SECRETARY.—Each 

7 State shall submit to the Secretary, in such form 

8 and manner as the Secretary shall require— 

9 ‘‘(A) the results of the statewide needs as10 sessment required under paragraph (1); and 

11 ‘‘(B) a description of how the State in12 tends to address needs identified by the assess13 ment, particularly with respect to communities 

14 identified under paragraph (1)(A), which may 

15 include applying for a grant to conduct an early 

16 childhood home visitation program in accord17 ance with the requirements of this section. 

18 ‘‘(c) GRANTS FOR EARLY CHILDHOOD HOME VISITA19 TION PROGRAMS.— 

20 ‘‘(1) AUTHORITY TO MAKE GRANTS.—In addi21 tion to any other payments made under this title to 

22 a State, the Secretary shall make grants to eligible 

23 entities to enable the entities to deliver services 

24 under early childhood home visitation programs that 

25 satisfy the requirements of subsection (d) to eligible 


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1 families in order to promote improvements in mater2 nal and prenatal health, infant health, child health 

3 and development, parenting related to child develop4 ment outcomes, school readiness, and the socio5 economic status of such families, and reductions in 

6 child abuse, neglect, and injuries. 

7 ‘‘(2) AUTHORITY TO USE INITIAL GRANT FUNDS

8 FOR PLANNING OR IMPLEMENTATION.—An eligible 

9 entity that receives a grant under paragraph (1) 

10 may use a portion of the funds made available to the 

11 entity during the first 6 months of the period for 

12 which the grant is made for planning or implementa13 tion activities to assist with the establishment of 

14 early childhood home visitation programs that sat15 isfy the requirements of subsection (d). 

16 ‘‘(3) GRANT DURATION.—The Secretary shall 

17 determine the period of years for which a grant is 

18 made to an eligible entity under paragraph (1). 

19 ‘‘(d) REQUIREMENTS.—The requirements of this sub20 section for an early childhood home visitation program 

21 conducted with a grant made under this section are as 

22 follows: 

23 ‘‘(1) QUANTIFIABLE, MEASURABLE IMPROVE24 MENT IN BENCHMARK AREAS.— 


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1 ‘‘(A) IN GENERAL.—The eligible entity es2 tablishes, subject to the approval of the Sec3 retary, quantifiable, measurable 3- and 5-year 

4 benchmarks for demonstrating that the pro5 gram results in improvements for the eligible 

6 families participating in the program in each of 

7 the following areas: 

8 ‘‘(i) Improved maternal and newborn 

9 health. 

10 ‘‘(ii) Prevention of child injuries and 

11 reduction of emergency department visits. 

12 ‘‘(iii) Improvement in school readiness 

13 and achievement. 

14 ‘‘(iv) Reduction in crime or domestic 

15 violence. 

16 ‘‘(v) Improvements in family economic 

17 self-sufficiency. 

18 ‘‘(vi) Improvements in the coordina19 tion and referrals for other community re20 sources and supports. 

21 ‘‘(B) DEMONSTRATION OF IMPROVEMENTS

22 AFTER 3 YEARS.— 

23 ‘‘(i) REPORT TO THE SECRETARY.— 

24 Not later than 30 days after the end of the 

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1 ducts the program, the entity submits to 

2 the Secretary a report demonstrating im3 provement in at least 4 of the areas speci4 fied in subparagraph (A). 

5 ‘‘(ii) CORRECTIVE ACTION PLAN.—If 

6 the report submitted by the eligible entity 

7 under clause (i) fails to demonstrate im8 provement in at least 4 of the areas speci9 fied in subparagraph (A), the entity shall 

10 develop and implement a plan to improve 

11 outcomes in each of the areas specified in 

12 subparagraph (A), subject to approval by 

13 the Secretary. The plan shall include provi14 sions for the Secretary to monitor imple15 mentation of the plan and conduct contin16 ued oversight of the program, including 

17 through submission by the entity of reg18 ular reports to the Secretary. 

19 ‘‘(iii) TECHNICAL ASSISTANCE.— 

20 ‘‘(I) IN GENERAL.—The Sec21 retary shall provide an eligible entity 

22 required to develop and implement an 

23 improvement plan under clause (ii) 

24 with technical assistance to develop 

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1 retary may provide the technical as2 sistance directly or through grants, 

3 contracts, or cooperative agreements. 

4 ‘‘(II) ADVISORY PANEL.—The 

5 Secretary shall establish an advisory 

6 panel for purposes of obtaining rec7 ommendations regarding the technical 

8 assistance provided to entities in ac9 cordance with subclause (I). 

10 ‘‘(iv) NO IMPROVEMENT OR FAILURE

11 TO SUBMIT REPORT.—If the Secretary de12 termines after a period of time specified by 

13 the Secretary that an eligible entity imple14 menting an improvement plan under clause 

15 (ii) has failed to demonstrate any improve16 ment in the areas specified in subpara17 graph (A), or if the Secretary determines 

18 that an eligible entity has failed to submit 

19 the report required under clause (i), the 

20 Secretary shall terminate the entity’s grant 

21 and may include any unexpended grant 

22 funds in grants made to nonprofit organi23 zations under subsection (h)(2)(B). 

24 ‘‘(C) FINAL REPORT.—Not later than De25 cember 31, 2014, the eligible entity shall subVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00460 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 mit a report to the Secretary demonstrating im2 provements (if any) in each of the areas speci3 fied in subparagraph (A). 

4 ‘‘(2) IMPROVEMENTS IN OUTCOMES FOR INDI5 VIDUAL FAMILIES.— 

6 ‘‘(A) IN GENERAL.—The program is de7 signed, with respect to an eligible family partici8 pating in the program, to result in the partici9 pant outcomes described in subparagraph (B) 

10 that the eligible entity identifies on the basis of 

11 an individualized assessment of the family, are 

12 relevant for that family. 

13 ‘‘(B) PARTICIPANT OUTCOMES.—The par14 ticipant outcomes described in this subpara15 graph are the following: 

16 ‘‘(i) Improvements in prenatal, mater17 nal, and newborn health, including im18 proved pregnancy outcomes 

19 ‘‘(ii) Improvements in child health 

20 and development, including the prevention 

21 of child injuries and maltreatment and im22 provements in cognitive, language, social23 emotional, and physical developmental indi24 cators. 


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1 ‘‘(iii) Improvements in parenting 

2 skills. 

3 ‘‘(iv) Improvements in school readi4 ness and child academic achievement. 

5 ‘‘(v) Reductions in crime or domestic 

6 violence. 

7 ‘‘(vi) Improvements in family eco8 nomic self-sufficiency. 

9 ‘‘(vii) Improvements in the coordina10 tion of referrals for, and the provision of, 

11 other community resources and supports 

12 for eligible families, consistent with State 

13 child welfare agency training. 

14 ‘‘(3) CORE COMPONENTS.—The program in15 cludes the following core components: 

16 ‘‘(A) SERVICE DELIVERY MODEL OR MOD17 ELS.— 

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

19 (ii), the program is conducted using 1 or 

20 more of the service delivery models de21 scribed in item (aa) or (bb) of subclause 

22 (I) or in subclause (II) selected by the eli23 gible entity: 

24 ‘‘(I) The model conforms to a 

25 clear consistent home visitation model 


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1 that has been in existence for at least 

2 3 years and is research-based, ground3 ed in relevant empirically-based 

4 knowledge, linked to program deter5 mined outcomes, associated with a na6 tional organization or institution of 

7 higher education that has comprehen8 sive home visitation program stand9 ards that ensure high quality service 

10 delivery and continuous program qual11 ity improvement, and has dem12 onstrated significant, (and in the case 

13 of the service delivery model described 

14 in item (aa), sustained) positive out15 comes, as described in the benchmark 

16 areas specified in paragraph (1)(A) 

17 and the participant outcomes de18 scribed in paragraph (2)(B), when 

19 evaluated using well-designed and rig20 orous— 

21 ‘‘(aa) randomized controlled 

22 research designs, and the evalua23 tion results have been published 

24 in a peer-reviewed journal; or 


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1 ‘‘(bb) quasi-experimental re2 search designs. 

3 ‘‘(II) The model conforms to a 

4 promising and new approach to 

5 achieving the benchmark areas speci6 fied in paragraph (1)(A) and the par7 ticipant outcomes described in para8 graph (2)(B), has been developed or 

9 identified by a national organization 

10 or institution of higher education, and 

11 will be evaluated through well-de12 signed and rigorous process. 

13 ‘‘(ii) MAJORITY OF GRANT FUNDS

14 USED FOR EVIDENCE-BASED MODELS.—An 

15 eligible entity shall use not more than 25 

16 percent of the amount of the grant paid to 

17 the entity for a fiscal year for purposes of 

18 conducting a program using the service de19 livery model described in clause (i)(III). 

20 ‘‘(iii) CRITERIA FOR EVIDENCE OF EF21 FECTIVENESS OF MODELS.—The Secretary 

22 shall establish criteria for evidence of effec23 tiveness of the service delivery models 

24 (which may be tiered) and for assessing 

25 such evidence with respect to each such 


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1 model. The Secretary shall ensure that the 

2 process for establishing the criteria is 

3 transparent and provides the opportunity 

4 for public comment. 

5 ‘‘(B) ADDITIONAL REQUIREMENTS.— 

6 ‘‘(i) The program adheres to a clear, 

7 consistent model that satisfies the require8 ments of being grounded in empirically9 based knowledge related to home visiting 

10 and linked to the benchmark areas speci11 fied in paragraph (1)(A) and the partici12 pant outcomes described in paragraph 

13 (2)(B). 

14 ‘‘(ii) The program employs well15 trained and competent staff, as dem16 onstrated by education or training, such as 

17 nurses, social workers, child development 

18 specialists, or other well-trained and com19 petent staff, and provides ongoing and spe20 cific training on the model being delivered. 

21 ‘‘(iii) The program maintains high 

22 quality supervision to establish home vis23 itor competencies. 


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1 ‘‘(iv) The program demonstrates 

2 strong organizational capacity to imple3 ment the activities involved. 

4 ‘‘(v) The program establishes appro5 priate linkages and referral networks to 

6 other community resources and supports 

7 for eligible families. 

8 ‘‘(vi) The program monitors the fidel9 ity of program implementation to ensure 

10 that services are delivered pursuant to the 

11 specified model. 

12 ‘‘(4) PRIORITY FOR SERVING HIGH-RISK POPU13 LATIONS.—The eligible entity gives priority to pro14 viding services under the program to the following: 

15 ‘‘(A) Eligible families who reside in com16 munities in need of such services, as identified 

17 in the statewide needs assessment required 

18 under subsection (b)(1)(A). 

19 ‘‘(B) Low-income eligible families. 

20 ‘‘(C) Eligible families who are pregnant 

21 women who have not attained age 21. 

22 ‘‘(D) Eligible families that have a history 

23 of child abuse or neglect. 

24 ‘‘(E) Eligible families that have had inter25 actions with child welfare services. 


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1 ‘‘(F) Eligible families that have a history 

2 of substance abuse or need substance abuse 

3 treatment. 

4 ‘‘(G) Eligible families that have users of 

5 tobacco products in the home. 

6 ‘‘(H) Eligible families that are or have 

7 children with low student achievement. 

8 ‘‘(I) Eligible families with children with de9 velopmental delays or disabilities. 

10 ‘‘(J) Eligible families who, or that include 

11 individuals who, are serving or formerly served 

12 in the Armed Forces, including such families 

13 that have members of the Armed Forces who 

14 have had multiple deployments outside of the 

15 United States. 

16 ‘‘(e) APPLICATION REQUIREMENTS.—An eligible en17 tity desiring a grant under this section shall submit an 

18 application to the Secretary for approval, in such manner 

19 as the Secretary may require, that includes the following: 

20 ‘‘(1) A description of the populations to be 

21 served by the entity, including specific information 

22 regarding how the entity will serve high risk popu23 lations described in subsection (d)(4). 

24 ‘‘(2) An assurance that the entity will give pri25 ority to serving low-income eligible families and eligiVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00467 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ble families who reside in at risk communities identi2 fied in the statewide needs assessment required 

3 under subsection (b)(1)(A). 

4 ‘‘(3) The service delivery model or models de5 scribed in subsection (d)(3)(A) that the entity will 

6 use under the program and the basis for the selec7 tion of the model or models. 

8 ‘‘(4) A statement identifying how the selection 

9 of the populations to be served and the service deliv10 ery model or models that the entity will use under 

11 the program for such populations is consistent with 

12 the results of the statewide needs assessment con13 ducted under subsection (b). 

14 ‘‘(5) The quantifiable, measurable benchmarks 

15 established by the State to demonstrate that the 

16 program contributes to improvements in the areas 

17 specified in subsection (d)(1)(A). 

18 ‘‘(6) An assurance that the entity will obtain 

19 and submit documentation or other appropriate evi20 dence from the organization or entity that developed 

21 the service delivery model or models used under the 

22 program to verify that the program is implemented 

23 and services are delivered according to the model 

24 specifications. 


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1 ‘‘(7) Assurances that the entity will establish 

2 procedures to ensure that— 

3 ‘‘(A) the participation of each eligible fam4 ily in the program is voluntary; and 

5 ‘‘(B) services are provided to an eligible 

6 family in accordance with the individual assess7 ment for that family. 

8 ‘‘(8) Assurances that the entity will— 

9 ‘‘(A) submit annual reports to the Sec10 retary regarding the program and activities car11 ried out under the program that include such 

12 information and data as the Secretary shall re13 quire; and 

14 ‘‘(B) participate in, and cooperate with, 

15 data and information collection necessary for 

16 the evaluation required under subsection (g)(2) 

17 and other research and evaluation activities car18 ried out under subsection (h)(3). 

19 ‘‘(9) A description of other State programs that 

20 include home visitation services, including, if appli21 cable to the State, other programs carried out under 

22 this title with funds made available from allotments 

23 under section 502(c), programs funded under title 

24 IV, title II of the Child Abuse Prevention and Treat25 ment Act (relating to community-based grants for 


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1 the prevention of child abuse and neglect), and sec2 tion 645A of the Head Start Act (relating to Early 

3 Head Start programs). 

4 ‘‘(10) Other information as required by the Sec5 retary. 

6 ‘‘(f) MAINTENANCE OF EFFORT.—Funds provided to 

7 an eligible entity receiving a grant under this section shall 

8 supplement, and not supplant, funds from other sources 

9 for early childhood home visitation programs or initiatives. 

10 ‘‘(g) EVALUATION.— 

11 ‘‘(1) INDEPENDENT, EXPERT ADVISORY

12 PANEL.—The Secretary, in accordance with sub13 section (h)(1)(A), shall appoint an independent advi14 sory panel consisting of experts in program evalua15 tion and research, education, and early childhood 

16 programs— 

17 ‘‘(A) to review, and make recommendations 

18 on, the design and plan for the evaluation re19 quired under paragraph (2) within 1 year after 

20 the date of enactment of this section; 

21 ‘‘(B) to maintain and advise the Secretary 

22 regarding the progress of the evaluation; and 

23 ‘‘(C) to comment, if the panel so desires, 

24 on the report submitted under paragraph (3). 


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1 ‘‘(2) AUTHORITY TO CONDUCT EVALUATION.— 

2 On the basis of the recommendations of the advisory 

3 panel under paragraph (1), the Secretary shall, by 

4 grant, contract, or interagency agreement, conduct 

5 an evaluation of the statewide needs assessments 

6 submitted under subsection (b) and the grants made 

7 under subsections (c) and (h)(3)(B). The evaluation 

8 shall include— 

9 ‘‘(A) an analysis, on a State-by-State 

10 basis, of the results of such assessments, in11 cluding indicators of maternal and prenatal 

12 health and infant health and mortality, and 

13 State actions in response to the assessments; 

14 and 

15 ‘‘(B) an assessment of— 

16 ‘‘(i) the effect of early childhood home 

17 visitation programs on child and parent 

18 outcomes, including with respect to each of 

19 the benchmark areas specified in sub20 section (d)(1)(A) and the participant out21 comes described in subsection (d)(2)(B); 

22 ‘‘(ii) the effectiveness of such pro23 grams on different populations, including 

24 the extent to which the ability of programs 


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1 to improve participant outcomes varies 

2 across programs and populations; and 

3 ‘‘(iii) the potential for the activities 

4 conducted under such programs, if scaled 

5 broadly, to improve health care practices, 

6 eliminate health disparities, and improve 

7 health care system quality, efficiencies, and 

8 reduce costs. 

9 ‘‘(3) REPORT.—Not later than March 31, 2015, 

10 the Secretary shall submit a report to Congress on 

11 the results of the evaluation conducted under para12 graph (2) and shall make the report publicly avail13 able. 

14 ‘‘(h) OTHER PROVISIONS.— 

15 ‘‘(1) INTRA-AGENCY COLLABORATION.—The 

16 Secretary shall ensure that the Maternal and Child 

17 Health Bureau and the Administration for Children 

18 and Families collaborate with respect to all aspects 

19 of carrying out this section, including with respect 

20 to— 

21 ‘‘(A) reviewing and analyzing the statewide 

22 needs assessments required under subsection 

23 (b), the awarding and oversight of grants 

24 awarded under this section, the establishment 

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1 sections (d)(1)(B)(iii)(II) and (g)(1), and the 

2 evaluation and report required under subsection 

3 (g); and 

4 ‘‘(B) consulting with other Federal agen5 cies with responsibility for administering or 

6 evaluating programs that serve eligible families 

7 to coordinate and collaborate with respect to re8 search related to such programs and families, 

9 including the Office of the Assistant Secretary 

10 for Planning and Evaluation of the Department 

11 of Health and Human Services, the Centers for 

12 Disease Control and Prevention, the National 

13 Institute of Child Health and Human Develop14 ment of the National Institutes of Health, the 

15 Office of Juvenile Justice and Delinquency Pre16 vention of the Department of Justice, and the 

17 Institute of Education Sciences of the Depart18 ment of Education. 

19 ‘‘(2) GRANTS TO ELIGIBLE ENTITIES THAT ARE

20 NOT STATES.— 

21 ‘‘(A) INDIAN TRIBES, TRIBAL ORGANIZA22 TIONS, OR URBAN INDIAN ORGANIZATIONS.— 

23 The Secretary shall specify requirements for eli24 gible entities that are Indian Tribes (or a con25 sortium of Indian Tribes), Tribal OrganizaVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00473 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tions, or Urban Indian Organizations to apply 

2 for and conduct an early childhood home visita3 tion program with a grant under this section. 

4 Such requirements shall, to the greatest extent 

5 practicable, be consistent with the requirements 

6 applicable to eligible entities that are States 

7 and shall require an Indian Tribe (or consor8 tium), Tribal Organization, or Urban Indian 

9 Organization to— 

10 ‘‘(i) conduct a needs assessment simi11 lar to the assessment required for all 

12 States under subsection (b); and 

13 ‘‘(ii) establish quantifiable, measur14 able 3- and 5-year benchmarks consistent 

15 with subsection (d)(1)(A). 

16 ‘‘(B) NONPROFIT ORGANIZATIONS.—If, as 

17 of the beginning of fiscal year 2012, a State 

18 has not applied and been approved for a grant 

19 under this section, the Secretary may use 

20 amounts appropriated under paragraph (1) of 

21 subsection (j) that are available for expenditure 

22 under paragraph (3) of that subsection to make 

23 a grant to an eligible entity that is a nonprofit 

24 organization described in subsection (k)(1)(B) 

25 to conduct an early childhood home visitation 


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1 program in the State. The Secretary shall speci2 fy the requirements for such an organization to 

3 apply for and conduct the program which shall, 

4 to the greatest extent practicable, be consistent 

5 with the requirements applicable to eligible enti6 ties that are States and shall require the orga7 nization to— 

8 ‘‘(i) carry out the program based on 

9 the needs assessment conducted by the 

10 State under subsection (b); and 

11 ‘‘(ii) establish quantifiable, measur12 able 3- and 5-year benchmarks consistent 

13 with subsection (d)(1)(A). 

14 ‘‘(3) RESEARCH AND OTHER EVALUATION AC15 TIVITIES.— 

16 ‘‘(A) IN GENERAL.—The Secretary shall 

17 carry out a continuous program of research and 

18 evaluation activities in order to increase knowl19 edge about the implementation and effective20 ness of home visiting programs, using random 

21 assignment designs to the maximum extent fea22 sible. The Secretary may carry out such activi23 ties directly, or through grants, cooperative 

24 agreements, or contracts. 


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1 ‘‘(B) REQUIREMENTS.—The Secretary 

2 shall ensure that— 

3 ‘‘(i) evaluation of a specific program 

4 or project is conducted by persons or indi5 viduals not directly involved in the oper6 ation of such program or project; and 

7 ‘‘(ii) the conduct of research and eval8 uation activities includes consultation with 

9 independent researchers, State officials, 

10 and developers and providers of home vis11 iting programs on topics including research 

12 design and administrative data matching. 

13 ‘‘(4) REPORT AND RECOMMENDATION.—Not 

14 later than December 31, 2015, the Secretary shall 

15 submit a report to Congress regarding the programs 

16 conducted with grants under this section. The report 

17 required under this paragraph shall include— 

18 ‘‘(A) information regarding the extent to 

19 which eligible entities receiving grants under 

20 this section demonstrated improvements in each 

21 of the areas specified in subsection (d)(1)(A); 

22 ‘‘(B) information regarding any technical 

23 assistance provided under subsection 

24 (d)(1)(B)(iii)(I), including the type of any such 

25 assistance provided; and 


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1 ‘‘(C) recommendations for such legislative 

2 or administrative action as the Secretary deter3 mines appropriate. 

4 ‘‘(i) APPLICATION OF OTHER PROVISIONS OF

5 TITLE.— 

6 ‘‘(1) IN GENERAL.—Except as provided in para7 graph (2), the other provisions of this title shall not 

8 apply to a grant made under this section. 

9 ‘‘(2) EXCEPTIONS.—The following provisions of 

10 this title shall apply to a grant made under this sec11 tion to the same extent and in the same manner as 

12 such provisions apply to allotments made under sec13 tion 502(c): 

14 ‘‘(A) Section 504(b)(6) (relating to prohi15 bition on payments to excluded individuals and 

16 entities). 

17 ‘‘(B) Section 504(c) (relating to the use of 

18 funds for the purchase of technical assistance). 

19 ‘‘(C) Section 504(d) (relating to a limita20 tion on administrative expenditures). 

21 ‘‘(D) Section 506 (relating to reports and 

22 audits), but only to the extent determined by 

23 the Secretary to be appropriate for grants made 

24 under this section. 


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1 ‘‘(E) Section 507 (relating to penalties for 

2 false statements). 

3 ‘‘(F) Section 508 (relating to non4 discrimination). 

5 ‘‘(G) Section 509(a) (relating to the ad6 ministration of the grant program). 

7 ‘‘(j) APPROPRIATIONS.— 

8 ‘‘(1) IN GENERAL.—Out of any funds in the 

9 Treasury not otherwise appropriated, there are ap10 propriated to the Secretary to carry out this sec11 tion— 

12 ‘‘(A) $100,000,000 for fiscal year 2010; 

13 ‘‘(B) $250,000,000 for fiscal year 2011; 

14 ‘‘(C) $350,000,000 for fiscal year 2012; 

15 ‘‘(D) $400,000,000 for fiscal year 2013; 

16 and 

17 ‘‘(E) $400,000,000 for fiscal year 2014. 

18 ‘‘(2) RESERVATIONS.—Of the amount appro19 priated under this subsection for a fiscal year, the 

20 Secretary shall reserve— 

21 ‘‘(A) 3 percent of such amount for pur22 poses of making grants to eligible entities that 

23 are Indian Tribes (or a consortium of Indian 

24 Tribes), Tribal Organizations, or Urban Indian 

25 Organizations; and 


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1 ‘‘(B) 3 percent of such amount for pur2 poses of carrying out subsections (d)(1)(B)(iii), 

3 (g), and (h)(3). 

4 ‘‘(3) AVAILABILITY.—Funds made available to 

5 an eligible entity under this section for a fiscal year 

6 shall remain available for expenditure by the eligible 

7 entity through the end of the second succeeding fis8 cal year after award. Any funds that are not ex9 pended by the eligible entity during the period in 

10 which the funds are available under the preceding 

11 sentence may be used for grants to nonprofit organi12 zations under subsection (h)(2)(B). 

13 ‘‘(k) DEFINITIONS.—In this section: 

14 ‘‘(1) ELIGIBLE ENTITY.— 

15 ‘‘(A) IN GENERAL.—The term ‘eligible en16 tity’ means a State, an Indian Tribe, Tribal Or17 ganization, or Urban Indian Organization, 

18 Puerto Rico, Guam, the Virgin Islands, the 

19 Northern Mariana Islands, and American 

20 Samoa. 

21 ‘‘(B) NONPROFIT ORGANIZATIONS.—Only 

22 for purposes of awarding grants under sub23 section (h)(2)(B), such term shall include a 

24 nonprofit organization with an established 

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1 tion programs or initiatives in a State or sev2 eral States. 

3 ‘‘(2) ELIGIBLE FAMILY.—The term ‘eligible 

4 family’ means— 

5 ‘‘(A) a woman who is pregnant, and the fa6 ther of the child if the father is available; or 

7 ‘‘(B) a parent or primary caregiver of a 

8 child, including grandparents or other relatives 

9 of the child, and foster parents, who are serving 

10 as the child’s primary caregiver from birth until 

11 entry into kindergarten, and including a non12 custodial parent who has an ongoing relation13 ship with, and at times provides physical care 

14 for, the child. 

15 ‘‘(3) INDIAN TRIBE; TRIBAL ORGANIZATION.— 

16 The terms ‘Indian Tribe’ and ‘Tribal Organization’, 

17 and ‘Urban Indian Organization’ have the meanings 

18 given such terms in section 4 of the Indian Health 

19 Care Improvement Act.’’. 

20 SEC. 1802. SUPPORT, EDUCATION, AND RESEARCH FOR 

21 POSTPARTUM DEPRESSION. 

22 (a) DEFINITIONS.—In this section: 

23 (1) The term ‘‘postpartum condition’’ means 

24 postpartum depression or postpartum psychosis. 


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

2 of Health and Human Services. 

3 (b) RESEARCH ON POSTPARTUM CONDITIONS.— 

4 (1) EXPANSION AND INTENSIFICATION OF AC5 TIVITIES.— 

6 (A) CONTINUATION OF ACTIVITIES.—The 

7 Secretary is encouraged to continue activities 

8 on postpartum conditions. 

9 (B) PROGRAMS FOR POSTPARTUM CONDI10 TIONS.—In carrying out subparagraph (A), the 

11 Secretary is encouraged to continue research to 

12 expand the understanding of the causes of, and 

13 treatments for, postpartum conditions. Activi14 ties under such subsection shall include con15 ducting and supporting the following: 

16 (i) Basic research concerning the eti17 ology and causes of the conditions. 

18 (ii) Epidemiological studies to address 

19 the frequency and natural history of the 

20 conditions and the differences among racial 

21 and ethnic groups with respect to the con22 ditions. 

23 (iii) The development of improved 

24 screening and diagnostic techniques. 


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1 (iv) Clinical research for the develop2 ment and evaluation of new treatments. 

3 (v) Information and education pro4 grams for health care professionals and the 

5 public, which may include a coordinated 

6 national campaign to increase the aware7 ness and knowledge of postpartum condi8 tions. Activities under such a national 

9 campaign may— 

10 (I) include public service an11 nouncements through television, radio, 

12 and other means; and 

13 (II) focus on— 

14 (aa) raising awareness about 

15 screening; 

16 (bb) educating new mothers 

17 and their families about 

18 postpartum conditions to pro19 mote earlier diagnosis and treat20 ment; and 

21 (cc) ensuring that such edu22 cation includes complete informa23 tion concerning postpartum con24 ditions, including its symptoms, 


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1 methods of coping with the ill2 ness, and treatment resources. 

3 (2) SENSE OF CONGRESS REGARDING LONGITU4 DINAL STUDY OF RELATIVE MENTAL HEALTH CON5 SEQUENCES FOR WOMEN OF RESOLVING A PREG6 NANCY.— 

7 (A) SENSE OF CONGRESS.—It is the sense 

8 of Congress that the Director of the National 

9 Institute of Mental Health may conduct a na10 tionally representative longitudinal study (dur11 ing the period of fiscal years 2010 through 

12 2019) of the relative mental health con13 sequences for women of resolving a pregnancy 

14 (intended and unintended) in various ways, in15 cluding carrying the pregnancy to term and 

16 parenting the child, carrying the pregnancy to 

17 term and placing the child for adoption, mis18 carriage, and having an abortion. This study 

19 may assess the incidence, timing, magnitude, 

20 and duration of the immediate and long-term 

21 mental health consequences (positive or nega22 tive) of these pregnancy outcomes. 

23 (B) REPORT.—Subject to the completion 

24 of the study under subsection (a), beginning not 

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1 ment of this Act, and periodically thereafter for 

2 the duration of the study, such Director may 

3 prepare and submit to the Congress reports on 

4 the findings of the study. 

5 (c) GRANTS TO PROVIDE SERVICES TO INDIVIDUALS

6 WITH A POSTPARTUM CONDITION AND THEIR FAMI7 LIES.—Title V of the Social Security Act (42 U.S.C. 701 

8 et seq.), as amended by section 1801, is amended by add9 ing at the end the following new section: 

10 ‘‘SEC. 512. SERVICES TO INDIVIDUALS WITH A 

11 POSTPARTUM CONDITION AND THEIR FAMI12 LIES. 

13 ‘‘(a) IN GENERAL.—In addition to any other pay14 ments made under this title to a State, the Secretary may 

15 make grants to eligible entities for projects for the estab16 lishment, operation, and coordination of effective and cost17 efficient systems for the delivery of essential services to 

18 individuals with a postpartum condition and their families. 

19 ‘‘(b) CERTAIN ACTIVITIES.—To the extent prac20 ticable and appropriate, the Secretary shall ensure that 

21 projects funded under subsection (a) provide education 

22 and services with respect to the diagnosis and manage23 ment of postpartum conditions. The Secretary may allow 

24 such projects to include the following: 


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1 ‘‘(1) Delivering or enhancing outpatient and 

2 home-based health and support services, including 

3 case management and comprehensive treatment 

4 services for individuals with or at risk for 

5 postpartum conditions, and delivering or enhancing 

6 support services for their families. 

7 ‘‘(2) Delivering or enhancing inpatient care 

8 management services that ensure the well-being of 

9 the mother and family and the future development 

10 of the infant. 

11 ‘‘(3) Improving the quality, availability, and or12 ganization of health care and support services (in13 cluding transportation services, attendant care, 

14 homemaker services, day or respite care, and pro15 viding counseling on financial assistance and insur16 ance) for individuals with a postpartum condition 

17 and support services for their families. 

18 ‘‘(4) Providing education to new mothers and, 

19 as appropriate, their families about postpartum con20 ditions to promote earlier diagnosis and treatment. 

21 Such education may include— 

22 ‘‘(A) providing complete information on 

23 postpartum conditions, symptoms, methods of 

24 coping with the illness, and treatment re25 sources; and 


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1 ‘‘(B) in the case of a grantee that is a 

2 State, hospital, or birthing facility— 

3 ‘‘(i) providing education to new moth4 ers and fathers, and other family members 

5 as appropriate, concerning postpartum 

6 conditions before new mothers leave the 

7 health facility; and 

8 ‘‘(ii) ensuring that training programs 

9 regarding such education are carried out 

10 at the health facility. 

11 ‘‘(c) INTEGRATION WITH OTHER PROGRAMS.—To 

12 the extent practicable and appropriate, the Secretary may 

13 integrate the grant program under this section with other 

14 grant programs carried out by the Secretary, including the 

15 program under section 330 of the Public Health Service 

16 Act. 

17 ‘‘(d) CERTAIN REQUIREMENTS.—A grant may be 

18 made under this section only if the applicant involved 

19 makes the following agreements: 

20 ‘‘(1) Not more than 5 percent of the grant will 

21 be used for administration, accounting, reporting, 

22 and program oversight functions. 

23 ‘‘(2) The grant will be used to supplement and 

24 not supplant funds from other sources related to the 

25 treatment of postpartum conditions. 


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1 ‘‘(3) The applicant will abide by any limitations 

2 deemed appropriate by the Secretary on any charges 

3 to individuals receiving services pursuant to the 

4 grant. As deemed appropriate by the Secretary, such 

5 limitations on charges may vary based on the finan6 cial circumstances of the individual receiving serv7 ices. 

8 ‘‘(4) The grant will not be expended to make 

9 payment for services authorized under subsection (a) 

10 to the extent that payment has been made, or can 

11 reasonably be expected to be made, with respect to 

12 such services— 

13 ‘‘(A) under any State compensation pro14 gram, under an insurance policy, or under any 

15 Federal or State health benefits program; or 

16 ‘‘(B) by an entity that provides health 

17 services on a prepaid basis. 

18 ‘‘(5) The applicant will, at each site at which 

19 the applicant provides services funded under sub20 section (a), post a conspicuous notice informing indi21 viduals who receive the services of any Federal poli22 cies that apply to the applicant with respect to the 

23 imposition of charges on such individuals. 


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1 ‘‘(6) For each grant period, the applicant will 

2 submit to the Secretary a report that describes how 

3 grant funds were used during such period. 

4 ‘‘(e) TECHNICAL ASSISTANCE.—The Secretary may 

5 provide technical assistance to entities seeking a grant 

6 under this section in order to assist such entities in com7 plying with the requirements of this section. 

8 ‘‘(f) APPLICATION OF OTHER PROVISIONS OF

9 TITLE.— 

10 ‘‘(1) IN GENERAL.—Except as provided in para11 graph (2), the other provisions of this title shall not 

12 apply to a grant made under this section. 

13 ‘‘(2) EXCEPTIONS.—The following provisions of 

14 this title shall apply to a grant made under this sec15 tion to the same extent and in the same manner as 

16 such provisions apply to allotments made under sec17 tion 502(c): 

18 ‘‘(A) Section 504(b)(6) (relating to prohi19 bition on payments to excluded individuals and 

20 entities). 

21 ‘‘(B) Section 504(c) (relating to the use of 

22 funds for the purchase of technical assistance). 

23 ‘‘(C) Section 504(d) (relating to a limita24 tion on administrative expenditures). 


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1 ‘‘(D) Section 506 (relating to reports and 

2 audits), but only to the extent determined by 

3 the Secretary to be appropriate for grants made 

4 under this section. 

5 ‘‘(E) Section 507 (relating to penalties for 

6 false statements). 

7 ‘‘(F) Section 508 (relating to non8 discrimination). 

9 ‘‘(G) Section 509(a) (relating to the ad10 ministration of the grant program). 

11 ‘‘(g) DEFINITIONS.—In this section: 

12 ‘‘(1) The term ‘eligible entity’— 

13 ‘‘(A) means a public or nonprofit private 

14 entity; and 

15 ‘‘(B) includes a State or local government, 

16 public-private partnership, recipient of a grant 

17 under section 330H of the Public Health Serv18 ice Act (relating to the Healthy Start Initia19 tive), public or nonprofit private hospital, com20 munity-based organization, hospice, ambulatory 

21 care facility, community health center, migrant 

22 health center, public housing primary care cen23 ter, or homeless health center. 

24 ‘‘(2) The term ‘postpartum condition’ means 

25 postpartum depression or postpartum psychosis.’’. 


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1 (d) GENERAL PROVISIONS.— 

2 (1) AUTHORIZATION OF APPROPRIATIONS.—To 

3 carry out this section and the amendment made by 

4 subsection (c), there are authorized to be appro5 priated, in addition to such other sums as may be 

6 available for such purpose— 

7 (A) $3,000,000 for fiscal year 2010; and 

8 (B) such sums as may be necessary for fis9 cal years 2011 and 2012. 

10 (2) REPORT BY THE SECRETARY.— 

11 (A) STUDY.—The Secretary shall conduct 

12 a study on the benefits of screening for 

13 postpartum conditions. 

14 (B) REPORT.—Not later than 2 years after 

15 the date of the enactment of this Act, the Sec16 retary shall complete the study required by sub17 paragraph (A) and submit a report to the Con18 gress on the results of such study. 

19 (3) LIMITATION.—Notwithstanding any other 

20 provision of this section or the amendment made by 

21 subsection (c), the Secretary may not utilize 

22 amounts made available under this section or such 

23 amendment to carry out activities or programs that 

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1 ready being carried out through the Department of 

2 Health and Human Services. 

3 SEC. 1803. PERSONAL RESPONSIBILITY EDUCATION FOR 

4 ADULTHOOD TRAINING. 

5 Title V of the Social Security Act (42 U.S.C. 701 

6 et seq.), as amended by sections 1801 and 1802(c), is 

7 amended by adding at the end the following: 

8 ‘‘SEC. 513. PERSONAL RESPONSIBILITY EDUCATION FOR 

9 ADULTHOOD (PRE-ADULTHOOD) TRAINING. 

10 ‘‘(a) ALLOTMENTS TO STATES.— 

11 ‘‘(1) AMOUNT.— 

12 ‘‘(A) IN GENERAL.—For the purpose de13 scribed in subsection (b), subject to the suc14 ceeding provisions of this section, for each of 

15 fiscal years 2010 through 2014, the Secretary 

16 shall allot to each State an amount equal to the 

17 product of— 

18 ‘‘(i) the amount appropriated under 

19 subsection (f) for the fiscal year and avail20 able for allotments to States after the ap21 plication of subsection (c); and 

22 ‘‘(ii) the State youth population per23 centage determined under paragraph (2). 

24 ‘‘(B) MINIMUM ALLOTMENT.— 


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1 ‘‘(i) IN GENERAL.—Each State allot2 ment under this paragraph for a fiscal 

3 year shall be at least $250,000. 

4 ‘‘(ii) PRO RATA ADJUSTMENTS.—The 

5 Secretary shall adjust on a pro rata basis 

6 the amount of the State allotments deter7 mined under this paragraph for a fiscal 

8 year to the extent necessary to comply with 

9 clause (i). 

10 ‘‘(C) APPLICATION REQUIRED TO ACCESS

11 ALLOTMENTS.— 

12 ‘‘(i) IN GENERAL.—A State shall not 

13 be paid from its allotment for a fiscal year 

14 unless the State submits an application to 

15 the Secretary for the fiscal year and the 

16 Secretary approves the application (or re17 quires changes to the application that the 

18 State satisfies) and meets such additional 

19 requirements as the Secretary may specify. 

20 ‘‘(ii) REQUIREMENTS.—The State ap21 plication shall contain an assurance that 

22 the State has complied with the require23 ments of this section in preparing and sub24 mitting the application and shall include 


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1 the following as well as such additional in2 formation as the Secretary may require: 

3 ‘‘(I) Based on data from the 

4 Centers for Disease Control and Pre5 vention National Center for Health 

6 Statistics, the most recent pregnancy 

7 rates for the State for youth ages 10 

8 to 14 and youth ages 15 to 19 for 

9 which data are available, the most re10 cent birth rates for such youth popu11 lations in the State for which data are 

12 available, and trends in those rates 

13 for the most recently preceding 5-year 

14 period for which such data are avail15 able. 

16 ‘‘(II) State-established goals for 

17 reducing the pregnancy rates and 

18 birth rates for such youth populations. 

19 ‘‘(III) A description of the 

20 State’s plan for using the State allot21 ments provided under this section to 

22 achieve such goals, especially among 

23 youth populations that are the most 

24 high-risk or vulnerable for pregnancies 

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1 cumstances, including youth in foster 

2 care, homeless youth, youth with HIV/ 

3 AIDS, pregnant youth who are under 

4 21 years of age, mothers who are 

5 under 21 years of age, and youth re6 siding in areas with high birth rates 

7 for youth. 

8 ‘‘(2) STATE YOUTH POPULATION PERCENT9 AGE.— 

10 ‘‘(A) IN GENERAL.—For purposes of para11 graph (1)(A)(ii), the State youth population 

12 percentage is, with respect to a State, the pro13 portion (expressed as a percentage) of— 

14 ‘‘(i) the number of individuals who 

15 have attained age 10 but not attained age 

16 20 in the State; to 

17 ‘‘(ii) the number of such individuals in 

18 all States. 

19 ‘‘(B) DETERMINATION OF NUMBER OF

20 YOUTH.—The number of individuals described 

21 in clauses (i) and (ii) of subparagraph (A) in a 

22 State shall be determined on the basis of the 

23 most recent Bureau of the Census data. 

24 ‘‘(3) AVAILABILITY OF STATE ALLOTMENTS.— 

25 Subject to paragraph (4)(A), amounts allotted to a 


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1 State pursuant to this subsection for a fiscal year 

2 shall remain available for expenditure by the State 

3 through the end of the second succeeding fiscal year. 

4 ‘‘(4) AUTHORITY TO AWARD GRANTS FROM

5 STATE ALLOTMENTS TO LOCAL ORGANIZATIONS AND

6 ENTITIES IN NONPARTICIPATING STATES.— 

7 ‘‘(A) GRANTS FROM UNEXPENDED ALLOT8 MENTS.—If a State does not submit an applica9 tion under this section for fiscal year 2010 or 

10 2011, the State shall no longer be eligible to 

11 submit an application to receive funds from the 

12 amounts allotted for the State for each of fiscal 

13 years 2010 through 2014 and such amounts 

14 shall be used by the Secretary to award grants 

15 under this paragraph for each of fiscal years 

16 2012 through 2014. The Secretary also shall 

17 use any amounts from the allotments of States 

18 that submit applications under this section for 

19 a fiscal year that remain unexpended as of the 

20 end of the period in which the allotments are 

21 available for expenditure under paragraph (3) 

22 for awarding grants under this paragraph. 

23 ‘‘(B) 3-YEAR GRANTS.— 

24 ‘‘(i) IN GENERAL.—The Secretary 

25 shall solicit applications to award 3-year 


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1 grants in each of fiscal years 2012, 2013, 

2 and 2014 to local organizations and enti3 ties to conduct, consistent with subsection 

4 (b), programs and activities in States that 

5 do not submit an application for an allot6 ment under this section for fiscal year 

7 2010 or 2011. 

8 ‘‘(ii) FAITH-BASED ORGANIZATIONS

9 OR CONSORTIA.—The Secretary may solicit 

10 and award grants under this paragraph to 

11 faith-based organizations or consortia, con12 sistent with the requirements of section 

13 1955 of the Public Health Service Act re14 lating to a grant award to nongovern15 mental entities. 

16 ‘‘(C) EVALUATION.—An organization or 

17 entity awarded a grant under this paragraph 

18 shall agree to participate in a rigorous Federal 

19 evaluation. 

20 ‘‘(5) MAINTENANCE OF EFFORT.—No payment 

21 shall be made to a State from the allotment deter22 mined for the State under this subsection or to a 

23 local organization or entity awarded a grant under 

24 paragraph (4), if the expenditure of non-federal 

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1 ties, programs, or initiatives for which amounts from 

2 allotments and grants under this subsection may be 

3 expended is less than the amount expended by the 

4 State, organization, or entity for such programs or 

5 initiatives for fiscal year 2009. 

6 ‘‘(6) DATA COLLECTION AND REPORTING.—A 

7 State or local organization or entity receiving funds 

8 under this section shall cooperate with such require9 ments relating to the collection of data and informa10 tion and reporting on outcomes regarding the pro11 grams and activities carried out with such funds, as 

12 the Secretary shall specify. 

13 ‘‘(b) PURPOSE.— 

14 ‘‘(1) IN GENERAL.—The purpose of an allot15 ment under subsection (a)(1) to a State is to enable 

16 the State (or, in the case of grants made under sub17 section (a)(4)(B), to enable a local organization or 

18 entity) to carry out personal responsibility education 

19 for adulthood programs consistent with this sub20 section. 

21 ‘‘(2) PERSONAL RESPONSIBILITY EDUCATION

22 FOR ADULTHOOD PROGRAMS.— 

23 ‘‘(A) IN GENERAL.—In this section, the 

24 term ‘personal responsibility education for 


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1 adulthood program’ means a program that is 

2 designed to educate adolescents on— 

3 ‘‘(i) both abstinence and contraception 

4 for the prevention of pregnancy and sexu5 ally transmitted infections, including HIV/ 

6 AIDS, consistent with the requirements of 

7 subparagraph (B); and 

8 ‘‘(ii) at least 3 of the adulthood prep9 aration subjects described in subparagraph 

10 (C). 

11 ‘‘(B) REQUIREMENTS.—The requirements 

12 of this subparagraph are the following: 

13 ‘‘(i) The program replicates evidence14 based effective programs or substantially 

15 incorporates elements of effective programs 

16 that have been proven on the basis of rig17 orous scientific research to change behav18 ior, which means delaying sexual activity, 

19 increasing condom or contraceptive use for 

20 sexually active youth, or reducing preg21 nancy among youth. 

22 ‘‘(ii) The program is medically-accu23 rate and complete. 

24 ‘‘(iii) The program includes activities 

25 to educate youth who are sexually active 


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1 regarding responsible sexual behavior with 

2 respect to both abstinence and the use of 

3 contraception. 

4 ‘‘(iv) The program places substantial 

5 emphasis on both abstinence and contra6 ception for the prevention of pregnancy 

7 among youth and sexually transmitted in8 fections. 

9 ‘‘(v) The program provides age-appro10 priate information and activities. 

11 ‘‘(vi) The information and activities 

12 carried out under the program are pro13 vided in the cultural context that is most 

14 appropriate for individuals in the par15 ticular population group to which they are 

16 directed. 

17 ‘‘(C) ADULTHOOD PREPARATION SUB18 JECTS.—The adulthood preparation subjects 

19 described in this subparagraph are the fol20 lowing: 

21 ‘‘(i) Healthy relationships, such as 

22 positive self-esteem and relationship dy23 namics, friendships, dating, romantic in24 volvement, marriage, and family inter25 actions. 


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1 ‘‘(ii) Adolescent development, such as 

2 the development of healthy attitudes and 

3 values about adolescent growth and devel4 opment, body image, racial and ethnic di5 versity, and other related subjects. 

6 ‘‘(iii) Financial literacy. 

7 ‘‘(iv) Parent-child communication. 

8 ‘‘(v) Educational and career success, 

9 such as developing skills for employment 

10 preparation, job seeking, independent liv11 ing, financial self-sufficiency, and work12 place productivity. 

13 ‘‘(vi) Healthy life skills, such as goal14 setting, decision making, negotiation, com15 munication and interpersonal skills, and 

16 stress management. 

17 ‘‘(D) FAITH-BASED ORGANIZATIONS.—A 

18 faith-based entity carrying out a program fund19 ed in whole or in part with funds made avail20 able under this section through a State allot21 ment or a grant shall agree that information, 

22 activities, and services are carried out with 

23 funds made available to the entity from the al24 lotment consistent with the requirements of sec25 tion 1955 of the Public Health Service Act reVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00500 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 lating to a grant award to nongovernmental en2 tities. 

3 ‘‘(c) RESERVATIONS OF FUNDS.— 

4 ‘‘(1) GRANTS TO IMPLEMENT INNOVATIVE

5 STRATEGIES.—From the amount appropriated under 

6 subsection (f) for the fiscal year, the Secretary shall 

7 reserve $10,000,000 of such amount for purposes of 

8 awarding grants to entities to implement innovative 

9 youth pregnancy prevention strategies and target 

10 services to high-risk, vulnerable, and culturally 

11 under-represented youth populations, including 

12 youth in foster care, homeless youth, youth with 

13 HIV/AIDS, pregnant women who are under 21 years 

14 of age and their partners, mothers who are under 21 

15 years of age and their partners, and youth residing 

16 in areas with high birth rates for youth. An entity 

17 awarded a grant under this paragraph shall agree to 

18 participate in a rigorous Federal evaluation of the 

19 activities carried out with grant funds. 

20 ‘‘(2) OTHER RESERVATIONS.—From the 

21 amount appropriated under subsection (f) for the 

22 fiscal year that remains after the application of 

23 paragraph (1), the Secretary shall reserve the fol24 lowing amounts: 


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1 ‘‘(A) GRANTS FOR INDIAN TRIBES OR

2 TRIBAL ORGANIZATIONS.—The Secretary shall 

3 reserve 5 percent of such remainder for pur4 poses of awarding grants to Indian tribes and 

5 tribal organizations in such manner, and sub6 ject to such requirements, as the Secretary, in 

7 consultation with Indian tribes and tribal orga8 nizations, determines appropriate. 

9 ‘‘(B) SECRETARIAL RESPONSIBILITIES.— 

10 The Secretary shall reserve 10 percent of such 

11 remainder for expenditures by the Secretary for 

12 the following: 

13 ‘‘(i) To award a grant to establish and 

14 operate a national teen pregnancy preven15 tion resource center consistent with sub16 paragraph (C). 

17 ‘‘(ii) To conduct research, training, 

18 and technical assistance with respect to the 

19 programs and activities carried out with 

20 funds made available through allotments or 

21 grants made under this section. 

22 ‘‘(iii) To evaluate the programs and 

23 activities carried out with funds made 

24 available through such allotments and 

25 grants. 


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1 ‘‘(C) NATIONAL TEEN PREGNANCY PRE2 VENTION RESOURCE CENTER.— 

3 ‘‘(i) IN GENERAL.—The Secretary 

4 shall award a grant to a nationally recog5 nized, nonpartisan, nonprofit organization 

6 that meets the requirements described in 

7 clause (ii) to establish and operate a na8 tional teen pregnancy prevention resource 

9 center (in this subparagraph referred to as 

10 the ‘Resource Center’) to carry out the 

11 purpose and activities described in clause 

12 (iii). 

13 ‘‘(ii) REQUIREMENTS.—The require14 ments described in this clause are the fol15 lowing: 

16 ‘‘(I) The organization has dem17 onstrated experience working with and 

18 providing assistance to a broad range 

19 of individuals and entities to reduce 

20 teen pregnancy. 

21 ‘‘(II) The organization is re22 search-based and has comprehensive 

23 knowledge and data about teen preg24 nancy prevention strategies. 


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1 ‘‘(iii) PURPOSE AND ACTIVITIES.— 

2 The Resource Center shall provide infor3 mation and technical assistance to public 

4 and private entities seeking to reduce teen 

5 pregnancy rates through activities that in6 clude the following: 

7 ‘‘(I) Synthesizing and dissemi8 nating research and information re9 garding effective and promising prac10 tices. 

11 ‘‘(II) Developing and providing 

12 information on how to identify, select, 

13 and implement effective programs. 

14 ‘‘(III) Linking organizations to 

15 existing resources, experts, and peers. 

16 ‘‘(IV) Providing consultation and 

17 resources on a broad array of strate18 gies and messages, including messages 

19 that focus on abstinence, contracep20 tion, responsible behavior and choices, 

21 family communication, relationships, 

22 and values. 

23 ‘‘(iv) COLLABORATION WITH OTHER

24 ORGANIZATIONS.—The organization oper25 ating the Resource Center shall collaborate 


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1 with other entities that have expertise in 

2 the prevention of HIV and sexually trans3 mitted infections, healthy relationships, fi4 nancial literacy, and other topics addressed 

5 through the personal responsibility for 

6 adulthood educational programs to develop 

7 resources and materials, provide technical 

8 assistance to States, Indian tribes, and 

9 communities, and undertake other activi10 ties as necessary. 

11 ‘‘(d) ADMINISTRATION.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall admin13 ister this section through the Assistant Secretary for 

14 the Administration for Children and Families within 

15 the Department of Health and Human Services. 

16 ‘‘(2) APPLICATION OF OTHER PROVISIONS OF

17 TITLE.— 

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 subparagraph (B), the other provisions of this 

20 title shall not apply to allotments or grants 

21 made under this section. 

22 ‘‘(B) EXCEPTIONS.—The following provi23 sions of this title shall apply to allotments and 

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1 tent and in the same manner as such provisions 

2 apply to allotments made under section 502(c): 

3 ‘‘(i) Section 504(b)(6) (relating to 

4 prohibition on payments to excluded indi5 viduals and entities). 

6 ‘‘(ii) Section 504(c) (relating to the 

7 use of funds for the purchase of technical 

8 assistance). 

9 ‘‘(iii) Section 504(d) (relating to a 

10 limitation on administrative expenditures). 

11 ‘‘(iv) Section 506 (relating to reports 

12 and audits), but only to the extent deter13 mined by the Secretary to be appropriate 

14 for grants made under this section. 

15 ‘‘(v) Section 507 (relating to penalties 

16 for false statements). 

17 ‘‘(vi) Section 508 (relating to non18 discrimination). 

19 ‘‘(e) DEFINITIONS.—In this section: 

20 ‘‘(1) AGE-APPROPRIATE.—The term ‘age-appro21 priate’, with respect to the information in pregnancy 

22 prevention, means topics, messages, and teaching 

23 methods suitable to particular ages or age groups of 

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1 nitive, emotional, and behavioral capacity typical for 

2 the age or age group. 

3 ‘‘(2) MEDICALLY ACCURATE AND COMPLETE.— 

4 The term ‘medically accurate and complete’ means 

5 verified or supported by the weight of research con6 ducted in compliance with accepted scientific meth7 ods and— 

8 ‘‘(A) published in peer-reviewed journals, 

9 where applicable; or 

10 ‘‘(B) comprising information that leading 

11 professional organizations and agencies with 

12 relevant expertise in the field recognize as accu13 rate, objective, and complete. 

14 ‘‘(3) INDIAN TRIBES; TRIBAL ORGANIZA15 TIONS.—The terms ‘Indian tribe’ and ‘Tribal organi16 zation’ have the meanings given such terms in sec17 tion 4 of the Indian Health Care Improvement Act 

18 (25 U.S.C. 1603)). 

19 ‘‘(4) YOUTH.—The term ‘youth’ means an indi20 vidual who has attained age 10 but has not attained 

21 age 20. 

22 ‘‘(f) APPROPRIATION.—For the purpose of carrying 

23 out this section, there is appropriated, out of any money 

24 in the Treasury not otherwise appropriated, $75,000,000 

25 for each of fiscal years 2010 through 2014. Amounts apVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00507 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 propriated under this subsection shall remain available 

2 until expended.’’. 

3 SEC. 1804. RESTORATION OF FUNDING FOR ABSTINENCE 

4 EDUCATION. 

5 Section 510 of the Social Security Act (42 U.S.C. 

6 710) is amended— 

7 (1) in subsection (a), by striking ‘‘fiscal year 

8 1998 and each subsequent fiscal year’’ and inserting 

9 ‘‘each of fiscal years 2010 through 2014’’; and 

10 (2) in subsection (d)— 

11 (A) in the first sentence, by striking ‘‘1998 

12 through 2003’’ and inserting ‘‘2010 through 

13 2014’’; and 

14 (B) in the second sentence, by inserting 

15 ‘‘(except that such appropriation shall be made 

16 on the date of enactment of the America’s 

17 Healthy Future Act of 2009 in the case of fis18 cal year 2010)’’ before the period. 

19 Subtitle J—Programs of Health 

20 Promotion and Disease Prevention 

21 SEC. 1901. PROGRAMS OF HEALTH PROMOTION AND DIS22 EASE PREVENTION. 

23 (a) INTERNAL REVENUE CODE OF 1986.—Section 

24 9802 of the Internal Revenue Code of 1986 is amended— 


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1 (1) by redesignating the second subsection (f) 

2 as subsection (g); and 

3 (2) by adding at the end the following: 

4 ‘‘(h) PROGRAMS OF HEALTH PROMOTION AND DIS5 EASE PREVENTION.— 

6 ‘‘(1) APPLICABILITY.—The following shall apply 

7 with respect to a program of health promotion or 

8 disease prevention for purposes of subsection 

9 (b)(2)(B). Such programs shall be referred to as 

10 ‘wellness programs’. 

11 ‘‘(2) DEFINITION AND GENERAL RULE.— 

12 ‘‘(A) DEFINITION.—For purposes of this 

13 subsection, a wellness program is any program 

14 designed to promote health or prevent disease, 

15 including a program designed to encourage in16 dividuals to adopt healthy behaviors. 

17 ‘‘(B) GENERAL RULE.—For purposes of 

18 subsections (a)(2) and (b)(2) (which provide ex19 ceptions to the general prohibitions against dis20 crimination based on a health factor for group 

21 health plan provisions that vary benefits (in22 cluding cost-sharing mechanisms) or the pre23 mium or contribution for similarly situated indi24 viduals in connection with a wellness program 

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1 section), if none of the conditions for obtaining 

2 a reward under a wellness program are based 

3 on an individual satisfying a standard that is 

4 related to a health factor, under this subsection, 

5 such wellness program does not violate this sec6 tion if participation in the program is made 

7 available to all similarly situated individuals. If 

8 any of the conditions for obtaining a reward 

9 under such a wellness program is based on an 

10 individual satisfying a standard that is related 

11 to a health factor, the wellness program shall 

12 not violate this section if the requirements of 

13 paragraph (4) of this section are satisfied. 

14 ‘‘(3) WELLNESS PROGRAMS NOT SUBJECT TO

15 REQUIREMENTS.—If none of the conditions for ob16 taining a reward under a wellness program are 

17 based on an individual satisfying a standard that is 

18 related to a health factor (or if a wellness program 

19 does not provide a reward), the wellness program 

20 shall not violate this section, if participation in the 

21 program is made available to all similarly situated 

22 individuals. Such programs need not satisfy the re23 quirements of paragraph (4), if participation in the 

24 program is made available to all similarly situated 


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1 individuals. Wellness programs described in this 

2 paragraph include the following: 

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

4 part of the cost for memberships in a fitness 

5 center. 

6 ‘‘(B) A diagnostic testing program that 

7 provides a reward for participation and does 

8 not base any part of the reward on outcomes. 

9 ‘‘(C) A program that encourages preven10 tive care through the waiver of the copayment 

11 or deductible requirement under a group health 

12 plan for the costs of, for example, prenatal care 

13 or well-baby visits. 

14 ‘‘(D) A program that reimburses employ15 ees for the costs of smoking cessation programs 

16 without regard to whether the employee quits 

17 smoking. 

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

19 employees for attending a monthly health edu20 cation seminar. 

21 ‘‘(4) WELLNESS PROGRAMS SUBJECT TO RE22 QUIREMENTS.—If any of the conditions for obtaining 

23 a reward under a wellness program is based on an 

24 individual satisfying a standard that is related to a 

25 health factor, the wellness program shall not violate 


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1 this section if the requirements of this paragraph 

2 are satisfied. 

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

4 coupled with the reward for other wellness pro5 grams with respect to the plan that require sat6 isfaction of a standard related to a health fac7 tor, shall not exceed 30 percent of the cost of 

8 employee-only coverage under the plan. How9 ever, if, in addition to employees, any class of 

10 dependents (such as spouses or spouses and de11 pendent children) may participate in the 

12 wellness program, the reward shall not exceed 

13 30 percent of the cost of the coverage in which 

14 an employee and any dependents are enrolled. 

15 For purposes of this paragraph, the cost of cov16 erage shall be determined based on the total 

17 amount of employer and employee contributions 

18 for the benefit package under which the em19 ployee is (or the employee and any dependents 

20 are) receiving coverage. A reward may be in the 

21 form of a discount or rebate of a premium or 

22 contribution, a waiver of all or part of a cost23 sharing mechanism (such as deductibles, copay24 ments, or coinsurance), the absence of a sur25 charge, or the value of a benefit that would othVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00512 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 erwise not be provided under the plan. The Sec2 retaries of Labor, Health and Human Services, 

3 and the Treasury may increase the reward 

4 available under this subparagraph to up to 50 

5 percent of the cost of coverage under the plan 

6 if such Secretaries determine that such an in7 crease is appropriate. 

8 ‘‘(B) The wellness program shall be rea9 sonably designed to promote health or prevent 

10 disease. A program satisfies this subparagraph 

11 if it has a reasonable chance of improving the 

12 health of or preventing disease in participating 

13 individuals and it is not overly burdensome, is 

14 not a subterfuge for discriminating based on a 

15 health factor, and is not highly suspect in the 

16 method chosen to promote health or prevent 

17 disease. At least once per year, each plan or 

18 issuer offering a wellness program shall evalu19 ate the reasonableness of such program. 

20 ‘‘(C) The program shall give individuals el21 igible for the program the opportunity to qual22 ify for the reward under the program at least 

23 once per year. 


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1 ‘‘(D)(i) The reward under the program 

2 shall be available to all similarly situated indi3 viduals. 

4 ‘‘(ii) For purposes of clause (i), a reward 

5 is not available to all similarly situated individ6 uals for a period unless the program allows— 

7 ‘‘(I) a reasonable alternative standard 

8 (or waiver of the otherwise applicable 

9 standard) for obtaining the reward for any 

10 individual for whom, for that period, it is 

11 unreasonably difficult due to a medical 

12 condition to satisfy the otherwise applica13 ble standard; and 

14 ‘‘(II) a reasonable alternative stand15 ard (or waiver of the otherwise applicable 

16 standard) for obtaining the reward for any 

17 individual for whom, for that period, it is 

18 medically inadvisable to attempt to satisfy 

19 the otherwise applicable standard. 

20 ‘‘(iii) A plan or issuer may seek 

21 verification, such as a statement from an indi22 vidual’s physician, that a health factor makes it 

23 unreasonably difficult or medically inadvisable 

24 for the individual to satisfy or attempt to sat25 isfy the otherwise applicable standard. 


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1 ‘‘(E)(i) The plan or issuer shall disclose in 

2 all plan materials describing the terms of the 

3 program the availability of a reasonable alter4 native standard (or the possibility of waiver of 

5 the otherwise applicable standard) required 

6 under subparagraph (D). If plan materials 

7 merely mention that a program is available, 

8 without describing its terms, such disclosure is 

9 not required. 

10 ‘‘(ii) The following language, or similar 

11 language, may be used to satisfy the require12 ment of this subparagraph: ‘If it is unreason13 ably difficult due to a medical condition for you 

14 to achieve the standards for the reward under 

15 this program, or if it is medically inadvisable 

16 for you to attempt to achieve the standards for 

17 the reward under this program, call us at [in18 sert telephone number] and we will work with 

19 you to develop another way to qualify for the 

20 reward.’. 

21 ‘‘(5) REGULATIONS.—The Secretaries of Labor, 

22 Health and Human Services, and the Treasury may pro23 mulgate regulations, as appropriate, to carry out this sub24 section. 


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1 ‘‘(6) EFFECTIVE DATE.—This subsection shall take 

2 effect on the date of enactment of the America’s Healthy 

3 Future Act of 2009. 

4 ‘‘(7) EXISTING WELLNESS PROGRAMS.—During the 

5 period of time between the date of enactment of the Amer6 ica’s Healthy Future Act of 2009 and the date on which 

7 the Secretaries of Labor, Health and Human Services, 

8 and the Treasury establish regulations to effectuate this 

9 subsection, a wellness program that was established prior 

10 to the date of enactment of the America’s Healthy Future 

11 Act of 2009 may continue to operate in accordance with 

12 the requirements in effect on the day before such date of 

13 enactment.’’. 

14 (b) PHSA GROUP MARKET.—Section 2702(b) of the 

15 Public Health Service Act (42 U.S.C. 300gg-1(b)) is 

16 amended by adding at the end the following: 

17 ‘‘(4) PROGRAMS OF HEALTH PROMOTION AND

18 DISEASE PREVENTION.—The provisions of section 

19 9802(h) of the Internal Revenue Code of 1986 shall 

20 apply to programs of health promotion and disease 

21 prevention offered through a group health plan or a 

22 health insurance issuer offering group health insur23 ance coverage.’’. 


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1 (c) ERISA.—Section 702(b) of the Employee Retire2 ment Income Security Act of 1974 (29 U.S.C. 1182(b)) 

3 is amended by adding at the end the following: 

4 ‘‘(4) PROGRAMS OF HEALTH PROMOTION AND

5 DISEASE PREVENTION.—The provisions of section 

6 9802(h) of the Internal Revenue Code of 1986 shall 

7 apply to programs of health promotion and disease 

8 prevention offered through a group health plan or a 

9 health insurance issuer offering group health insur10 ance coverage.’’. 

11 (d) APPLICATION OF WELLNESS PROGRAMS PROVI12 SIONS TO CARRIERS PROVIDING FEDERAL EMPLOYEE

13 HEALTH BENEFITS PLANS.— 

14 (1) IN GENERAL.—Notwithstanding section 

15 8906 of title 5, United States Code (including sub16 sections (b)(1) and (b)(2) of such section), sub17 sections (a), (b), and (c) of this section, including 

18 the amendments made by those subsections, (relat19 ing to wellness programs) shall apply to carriers en20 tering into contracts under section 8902 of title 5, 

21 United States Code. 

22 (2) PROPOSALS.—Carriers may submit separate 

23 proposals relating to voluntary wellness program of24 ferings as part of the annual call for benefit and 


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1 rate proposals to the Office of Personnel Manage2 ment. 

3 (3) EFFECTIVE DATE.—This subsection shall 

4 take effect on the date of enactment of this Act and 

5 shall apply to contracts entered into under section 

6 8902 of title 5, United States Code, that take effect 

7 with respect to calendar years that begin more than 

8 1 year after that date. 

9 (e) STATE DEMONSTRATION PROJECT.—Subpart 1 

10 of part B of title XXVII of the Public Health Service Act 

11 (42 U.S.C. 300gg-41 et seq.) is amended by adding at the 

12 end the following: 

13 ‘‘SEC. 2746. WELLNESS PROGRAM DEMONSTRATION 

14 PROJECT. 

15 ‘‘(a) IN GENERAL.—Not later than July 1, 2014, the 

16 Secretary of Health and Human Services, in consultation 

17 with the Secretary of the Treasury, shall establish a 10- 

18 State demonstration project under which participating 

19 States shall apply the provisions of 9802(h) of the Internal 

20 Revenue Code of 1986 to programs of health promotion 

21 offered by a health insurance issuer that offers health in22 surance coverage in the individual market in such State. 

23 ‘‘(b) EXPANSION OF DEMONSTRATION PROJECT.—If 

24 the Secretary of Health and Human Services, in consulta25 tion with the Secretary of the Treasury, determines that 


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1 the demonstration project described in subsection (a) is 

2 effective, such Secretaries may, beginning on July 1, 2017 

3 expand such demonstration project to include additional 

4 participating States. 

5 ‘‘(c) REQUIREMENTS.—States that participate in the 

6 demonstration project under this section shall— 

7 ‘‘(1) ensure that requirements of consumer pro8 tection are met in programs of health promotion in 

9 the individual market; 

10 ‘‘(2) require verification from health insurance 

11 issuers that offer health insurance coverage in the 

12 individual market of such State that premium dis13 counts— 

14 ‘‘(A) do not create undue burdens for indi15 viduals insured in the individual market; 

16 ‘‘(B) do not lead to cost shifting; and 

17 ‘‘(C) are not a subterfuge for discrimina18 tion; and 

19 ‘‘(3) ensure that consumer data is protected in 

20 accordance with the requirements of section 264(c) 

21 of the Health Insurance Portability and Account22 ability Act of 1996 (42 U.S.C. 1320d-2 note). 

23 ‘‘(d) EXISTING PROGRAMS OF HEALTH PROMOTION

24 OR DISEASE PREVENTION.—Nothing in this section shall 

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1 motion offered by a health insurance issuer that offers 

2 health insurance coverage in the individual market in such 

3 State that was established or adopted by State law on or 

4 after the date of enactment of this Act. 

5 ‘‘(e) REGULATIONS.—The Secretaries of Health and 

6 Human Services and the Treasury may promulgate regu7 lations, as appropriate, to carry out this section.’’. 

8 (f) REPORT.— 

9 (1) IN GENERAL.—Not later than 3 years after 

10 the date of enactment of this Act, the Secretary of 

11 Health and Human Services, in consultation with 

12 the Secretary of the Treasury and the Secretary of 

13 Labor, shall submit a report to the appropriate com14 mittees of Congress concerning— 

15 (A) the effectiveness of wellness programs 

16 (as defined in section 9802(h)(2) of the Inter17 nal Revenue Code of 1986, as added by sub18 section (a)) in promoting health and preventing 

19 disease; 

20 (B) the impact of such wellness programs 

21 on the access to care and affordability of cov22 erage for participants and non-participants of 

23 such programs; 

24 (C) the impact of premium-based and cost25 sharing incentives on participant behavior and 


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1 the role of such programs in changing behavior; 

2 and 

3 (D) the effectiveness of different types of 

4 rewards. 

5 (2) DATA COLLECTION.—In preparing the re6 port described in paragraph (1), the Secretaries 

7 shall gather relevant information from employers 

8 who provide employees with access to wellness pro9 grams, including State and Federal agencies. 

10 Subtitle K—Elder Justice Act 

11 SEC. 1911. SHORT TITLE OF SUBTITLE. 

12 This subtitle may be cited as the ‘‘Elder Justice Act 

13 of 2009’’. 

14 SEC. 1912. DEFINITIONS. 

15 Except as otherwise specifically provided, any term 

16 that is defined in section 2011 of the Social Security Act 

17 (as added by section 1913(a)) and is used in this subtitle 

18 has the meaning given such term by such section. 

19 SEC. 1913. ELDER JUSTICE. 

20 (a) ELDER JUSTICE.— 

21 (1) IN GENERAL.—Title XX of the Social Secu22 rity Act (42 U.S.C. 1397 et seq.) is amended— 

23 (A) in the heading, by inserting ‘‘AND 

24 ELDER JUSTICE’’ after ‘‘SOCIAL 

25 SERVICES’’; 


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1 (B) by inserting before section 2001 the 

2 following: 

3 ‘‘Subtitle A—Block Grants to States 

4 for Social Services’’; 

5 and 

6 (C) by adding at the end the following: 

7 ‘‘Subtitle B—Elder Justice 

8 ‘‘SEC. 2011. DEFINITIONS. 

9 ‘‘In this subtitle: 

10 ‘‘(1) ABUSE.—The term ‘abuse’ means the 

11 knowing infliction of physical or psychological harm 

12 or the knowing deprivation of goods or services that 

13 are necessary to meet essential needs or to avoid 

14 physical or psychological harm. 

15 ‘‘(2) ADULT PROTECTIVE SERVICES.—The term 

16 ‘adult protective services’ means such services pro17 vided to adults as the Secretary may specify and in18 cludes services such as— 

19 ‘‘(A) receiving reports of adult abuse, ne20 glect, or exploitation; 

21 ‘‘(B) investigating the reports described in 

22 subparagraph (A); 

23 ‘‘(C) case planning, monitoring, evaluation, 

24 and other case work and services; and 


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1 ‘‘(D) providing, arranging for, or facili2 tating the provision of medical, social service, 

3 economic, legal, housing, law enforcement, or 

4 other protective, emergency, or support services. 

5 ‘‘(3) CAREGIVER.—The term ‘caregiver’ means 

6 an individual who has the responsibility for the care 

7 of an elder, either voluntarily, by contract, by receipt 

8 of payment for care, or as a result of the operation 

9 of law, and means a family member or other indi10 vidual who provides (on behalf of such individual or 

11 of a public or private agency, organization, or insti12 tution) compensated or uncompensated care to an 

13 elder who needs supportive services in any setting. 

14 ‘‘(4) DIRECT CARE.—The term ‘direct care’ 

15 means care by an employee or contractor who pro16 vides assistance or long-term care services to a re17 cipient. 

18 ‘‘(5) ELDER.—The term ‘elder’ means an indi19 vidual age 60 or older. 

20 ‘‘(6) ELDER JUSTICE.—The term ‘elder justice’ 

21 means— 

22 ‘‘(A) from a societal perspective, efforts 

23 to— 


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1 ‘‘(i) prevent, detect, treat, intervene 

2 in, and prosecute elder abuse, neglect, and 

3 exploitation; and 

4 ‘‘(ii) protect elders with diminished 

5 capacity while maximizing their autonomy; 

6 and 

7 ‘‘(B) from an individual perspective, the 

8 recognition of an elder’s rights, including the 

9 right to be free of abuse, neglect, and exploi10 tation. 

11 ‘‘(7) ELIGIBLE ENTITY.—The term ‘eligible en12 tity’ means a State or local government agency, In13 dian tribe or tribal organization, or any other public 

14 or private entity that is engaged in and has expertise 

15 in issues relating to elder justice or in a field nec16 essary to promote elder justice efforts. 

17 ‘‘(8) EXPLOITATION.—The term ‘exploitation’ 

18 means the fraudulent or otherwise illegal, unauthor19 ized, or improper act or process of an individual, in20 cluding a caregiver or fiduciary, that uses the re21 sources of an elder for monetary or personal benefit, 

22 profit, or gain, or that results in depriving an elder 

23 of rightful access to, or use of, benefits, resources, 

24 belongings, or assets. 

25 ‘‘(9) FIDUCIARY.—The term ‘fiduciary’— 


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1 ‘‘(A) means a person or entity with the 

2 legal responsibility— 

3 ‘‘(i) to make decisions on behalf of 

4 and for the benefit of another person; and 

5 ‘‘(ii) to act in good faith and with 

6 fairness; and 

7 ‘‘(B) includes a trustee, a guardian, a con8 servator, an executor, an agent under a finan9 cial power of attorney or health care power of 

10 attorney, or a representative payee. 

11 ‘‘(10) GRANT.—The term ‘grant’ includes a 

12 contract, cooperative agreement, or other mechanism 

13 for providing financial assistance. 

14 ‘‘(11) GUARDIANSHIP.—The term ‘guardian15 ship’ means— 

16 ‘‘(A) the process by which a State court 

17 determines that an adult individual lacks capac18 ity to make decisions about self-care or prop19 erty, and appoints another individual or entity 

20 known as a guardian, as a conservator, or by a 

21 similar term, as a surrogate decisionmaker; 

22 ‘‘(B) the manner in which the court-ap23 pointed surrogate decisionmaker carries out du24 ties to the individual and the court; or 


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1 ‘‘(C) the manner in which the court exer2 cises oversight of the surrogate decisionmaker. 

3 ‘‘(12) INDIAN TRIBE.— 

4 ‘‘(A) IN GENERAL.—The term ‘Indian 

5 tribe’ has the meaning given such term in sec6 tion 4 of the Indian Self-Determination and 

7 Education Assistance Act (25 U.S.C. 450b). 

8 ‘‘(B) INCLUSION OF PUEBLO AND

9 RANCHERIA.—The term ‘Indian tribe’ includes 

10 any Pueblo or Rancheria. 

11 ‘‘(13) LAW ENFORCEMENT.—The term ‘law en12 forcement’ means the full range of potential re13 sponders to elder abuse, neglect, and exploitation in14 cluding— 

15 ‘‘(A) police, sheriffs, detectives, public safe16 ty officers, and corrections personnel; 

17 ‘‘(B) prosecutors; 

18 ‘‘(C) medical examiners; 

19 ‘‘(D) investigators; and 

20 ‘‘(E) coroners. 

21 ‘‘(14) LONG-TERM CARE.— 

22 ‘‘(A) IN GENERAL.—The term ‘long-term 

23 care’ means supportive and health services spec24 ified by the Secretary for individuals who need 

25 assistance because the individuals have a loss of 


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1 capacity for self-care due to illness, disability, 

2 or vulnerability. 

3 ‘‘(B) LOSS OF CAPACITY FOR SELF4 CARE.—For purposes of subparagraph (A), the 

5 term ‘loss of capacity for self-care’ means an in6 ability to engage in 1 or more activities of daily 

7 living, including eating, dressing, bathing, man8 agement of one’s financial affairs, and other ac9 tivities the Secretary determines appropriate. 

10 ‘‘(15) LONG-TERM CARE FACILITY.—The term 

11 ‘long-term care facility’ means a residential care pro12 vider that arranges for, or directly provides, long13 term care. 

14 ‘‘(16) NEGLECT.—The term ‘neglect’ means— 

15 ‘‘(A) the failure of a caregiver or fiduciary 

16 to provide the goods or services that are nec17 essary to maintain the health or safety of an 

18 elder; or 

19 ‘‘(B) self-neglect. 

20 ‘‘(17) NURSING FACILITY.— 

21 ‘‘(A) IN GENERAL.—The term ‘nursing fa22 cility’ has the meaning given such term under 

23 section 1919(a). 

24 ‘‘(B) INCLUSION OF SKILLED NURSING FA25 CILITY.—The term ‘nursing facility’ includes a 


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1 skilled nursing facility (as defined in section 

2 1819(a)). 

3 ‘‘(18) SELF-NEGLECT.—The term ‘self-neglect’ 

4 means an adult’s inability, due to physical or mental 

5 impairment or diminished capacity, to perform es6 sential self-care tasks including— 

7 ‘‘(A) obtaining essential food, clothing, 

8 shelter, and medical care; 

9 ‘‘(B) obtaining goods and services nec10 essary to maintain physical health, mental 

11 health, or general safety; or 

12 ‘‘(C) managing one’s own financial affairs. 

13 ‘‘(19) SERIOUS BODILY INJURY.— 

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

15 bodily injury’ means an injury— 

16 ‘‘(i) involving extreme physical pain; 

17 ‘‘(ii) involving substantial risk of 

18 death; 

19 ‘‘(iii) involving protracted loss or im20 pairment of the function of a bodily mem21 ber, organ, or mental faculty; or 

22 ‘‘(iv) requiring medical intervention 

23 such as surgery, hospitalization, or phys24 ical rehabilitation. 


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1 ‘‘(B) CRIMINAL SEXUAL ABUSE.—Serious 

2 bodily injury shall be considered to have oc3 curred if the conduct causing the injury is con4 duct described in section 2241 (relating to ag5 gravated sexual abuse) or 2242 (relating to sex6 ual abuse) of title 18, United States Code, or 

7 any similar offense under State law. 

8 ‘‘(20) SOCIAL.—The term ‘social’, when used 

9 with respect to a service, includes adult protective 

10 services. 

11 ‘‘(21) STATE LEGAL ASSISTANCE DEVEL12 OPER.—The term ‘State legal assistance developer’ 

13 means an individual described in section 731 of the 

14 Older Americans Act of 1965. 

15 ‘‘(22) STATE LONG-TERM CARE OMBUDSMAN.— 

16 The term ‘State Long-Term Care Ombudsman’ 

17 means the State Long-Term Care Ombudsman de18 scribed in section 712(a)(2) of the Older Americans 

19 Act of 1965. 

20 ‘‘SEC. 2012. GENERAL PROVISIONS. 

21 ‘‘(a) PROTECTION OF PRIVACY.—In pursuing activi22 ties under this subtitle, the Secretary shall ensure the pro23 tection of individual health privacy consistent with the reg24 ulations promulgated under section 264(c) of the Health 


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1 Insurance Portability and Accountability Act of 1996 and 

2 applicable State and local privacy regulations. 

3 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sub4 title shall be construed to interfere with or abridge an el5 der’s right to practice his or her religion through reliance 

6 on prayer alone for healing when this choice— 

7 ‘‘(1) is contemporaneously expressed, either 

8 orally or in writing, with respect to a specific illness 

9 or injury which the elder has at the time of the deci10 sion by an elder who is competent at the time of the 

11 decision; 

12 ‘‘(2) is previously set forth in a living will, 

13 health care proxy, or other advance directive docu14 ment that is validly executed and applied under 

15 State law; or 

16 ‘‘(3) may be unambiguously deduced from the 

17 elder’s life history. 


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1 ‘‘PART I—NATIONAL COORDINATION OF ELDER 

2 JUSTICE ACTIVITIES AND RESEARCH 

3 ‘‘Subpart A—Elder Justice Coordinating Council and 

4 Advisory Board on Elder Abuse, Neglect, and Ex5 ploitation 

6 ‘‘SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL. 

7 ‘‘(a) ESTABLISHMENT.—There is established within 

8 the Office of the Secretary an Elder Justice Coordinating 

9 Council (in this section referred to as the ‘Council’). 

10 ‘‘(b) MEMBERSHIP.— 

11 ‘‘(1) IN GENERAL.—The Council shall be com12 posed of the following members: 

13 ‘‘(A) The Secretary (or the Secretary’s 

14 designee). 

15 ‘‘(B) The Attorney General (or the Attor16 ney General’s designee). 

17 ‘‘(C) The head of each Federal department 

18 or agency or other governmental entity identi19 fied by the Chair referred to in subsection (d) 

20 as having responsibilities, or administering pro21 grams, relating to elder abuse, neglect, and ex22 ploitation. 

23 ‘‘(2) REQUIREMENT.—Each member of the 

24 Council shall be an officer or employee of the Fed25 eral Government. 


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1 ‘‘(c) VACANCIES.—Any vacancy in the Council shall 

2 not affect its powers, but shall be filled in the same man3 ner as the original appointment was made. 

4 ‘‘(d) CHAIR.—The member described in subsection 

5 (b)(1)(A) shall be Chair of the Council. 

6 ‘‘(e) MEETINGS.—The Council shall meet at least 2 

7 times per year, as determined by the Chair. 

8 ‘‘(f) DUTIES.— 

9 ‘‘(1) IN GENERAL.—The Council shall make 

10 recommendations to the Secretary for the coordina11 tion of activities of the Department of Health and 

12 Human Services, the Department of Justice, and 

13 other relevant Federal, State, local, and private 

14 agencies and entities, relating to elder abuse, ne15 glect, and exploitation and other crimes against el16 ders. 

17 ‘‘(2) REPORT.—Not later than the date that is 

18 2 years after the date of enactment of the Elder 

19 Justice Act of 2009 and every 2 years thereafter, 

20 the Council shall submit to the Committee on Fi21 nance of the Senate and the Committee on Ways 

22 and Means and the Committee on Energy and Com23 merce of the House of Representatives a report 

24 that— 


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1 ‘‘(A) describes the activities and accom2 plishments of, and challenges faced by— 

3 ‘‘(i) the Council; and 

4 ‘‘(ii) the entities represented on the 

5 Council; and 

6 ‘‘(B) makes such recommendations for leg7 islation, model laws, or other action as the 

8 Council determines to be appropriate. 

9 ‘‘(g) POWERS OF THE COUNCIL.— 

10 ‘‘(1) INFORMATION FROM FEDERAL AGEN11 CIES.—Subject to the requirements of section 

12 2012(a), the Council may secure directly from any 

13 Federal department or agency such information as 

14 the Council considers necessary to carry out this sec15 tion. Upon request of the Chair of the Council, the 

16 head of such department or agency shall furnish 

17 such information to the Council. 

18 ‘‘(2) POSTAL SERVICES.—The Council may use 

19 the United States mails in the same manner and 

20 under the same conditions as other departments and 

21 agencies of the Federal Government. 

22 ‘‘(h) TRAVEL EXPENSES.—The members of the 

23 Council shall not receive compensation for the perform24 ance of services for the Council. The members shall be 

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1 sistence, at rates authorized for employees of agencies 

2 under subchapter I of chapter 57 of title 5, United States 

3 Code, while away from their homes or regular places of 

4 business in the performance of services for the Council. 

5 Notwithstanding section 1342 of title 31, United States 

6 Code, the Secretary may accept the voluntary and uncom7 pensated services of the members of the Council. 

8 ‘‘(i) DETAIL OF GOVERNMENT EMPLOYEES.—Any 

9 Federal Government employee may be detailed to the 

10 Council without reimbursement, and such detail shall be 

11 without interruption or loss of civil service status or privi12 lege. 

13 ‘‘(j) STATUS AS PERMANENT COUNCIL.—Section 14 

14 of the Federal Advisory Committee Act (5 U.S.C. App.) 

15 shall not apply to the Council. 

16 ‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated such sums as are nec18 essary to carry out this section. 

19 ‘‘SEC. 2022. ADVISORY BOARD ON ELDER ABUSE, NEGLECT, 

20 AND EXPLOITATION. 

21 ‘‘(a) ESTABLISHMENT.—There is established a board 

22 to be known as the ‘Advisory Board on Elder Abuse, Ne23 glect, and Exploitation’ (in this section referred to as the 

24 ‘Advisory Board’) to create short- and long-term multi25 disciplinary strategic plans for the development of the field 


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1 of elder justice and to make recommendations to the Elder 

2 Justice Coordinating Council established under section 

3 2021. 

4 ‘‘(b) COMPOSITION.—The Advisory Board shall be 

5 composed of 27 members appointed by the Secretary from 

6 among members of the general public who are individuals 

7 with experience and expertise in elder abuse, neglect, and 

8 exploitation prevention, detection, treatment, intervention, 

9 or prosecution. 

10 ‘‘(c) SOLICITATION OF NOMINATIONS.—The Sec11 retary shall publish a notice in the Federal Register solic12 iting nominations for the appointment of members of the 

13 Advisory Board under subsection (b). 

14 ‘‘(d) TERMS.— 

15 ‘‘(1) IN GENERAL.—Each member of the Advi16 sory Board shall be appointed for a term of 3 years, 

17 except that, of the members first appointed— 

18 ‘‘(A) 9 shall be appointed for a term of 3 

19 years; 

20 ‘‘(B) 9 shall be appointed for a term of 2 

21 years; and 

22 ‘‘(C) 9 shall be appointed for a term of 1 

23 year. 

24 ‘‘(2) VACANCIES.— 


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1 ‘‘(A) IN GENERAL.—Any vacancy on the 

2 Advisory Board shall not affect its powers, but 

3 shall be filled in the same manner as the origi4 nal appointment was made. 

5 ‘‘(B) FILLING UNEXPIRED TERM.—An in6 dividual chosen to fill a vacancy shall be ap7 pointed for the unexpired term of the member 

8 replaced. 

9 ‘‘(3) EXPIRATION OF TERMS.—The term of any 

10 member shall not expire before the date on which 

11 the member’s successor takes office. 

12 ‘‘(e) ELECTION OF OFFICERS.—The Advisory Board 

13 shall elect a Chair and Vice Chair from among its mem14 bers. The Advisory Board shall elect its initial Chair and 

15 Vice Chair at its initial meeting. 

16 ‘‘(f) DUTIES.— 

17 ‘‘(1) ENHANCE COMMUNICATION ON PRO18 MOTING QUALITY OF, AND PREVENTING ABUSE, NE19 GLECT, AND EXPLOITATION IN, LONG-TERM CARE.— 

20 The Advisory Board shall develop collaborative and 

21 innovative approaches to improve the quality of, in22 cluding preventing abuse, neglect, and exploitation 

23 in, long-term care. 


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1 ‘‘(2) COLLABORATIVE EFFORTS TO DEVELOP

2 CONSENSUS AROUND THE MANAGEMENT OF CER3 TAIN QUALITY-RELATED FACTORS.— 

4 ‘‘(A) IN GENERAL.—The Advisory Board 

5 shall establish multidisciplinary panels to ad6 dress, and develop consensus on, subjects relat7 ing to improving the quality of long-term care. 

8 At least 1 such panel shall address, and develop 

9 consensus on, methods for managing resident10 to-resident abuse in long-term care. 

11 ‘‘(B) ACTIVITIES CONDUCTED.—The multi12 disciplinary panels established under subpara13 graph (A) shall examine relevant research and 

14 data, identify best practices with respect to the 

15 subject of the panel, determine the best way to 

16 carry out those best practices in a practical and 

17 feasible manner, and determine an effective 

18 manner of distributing information on such 

19 subject. 

20 ‘‘(3) REPORT.—Not later than the date that is 

21 18 months after the date of enactment of the Elder 

22 Justice Act of 2009, and annually thereafter, the 

23 Advisory Board shall prepare and submit to the 

24 Elder Justice Coordinating Council, the Committee 

25 on Finance of the Senate, and the Committee on 


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1 Ways and Means and the Committee on Energy and 

2 Commerce of the House of Representatives a report 

3 containing— 

4 ‘‘(A) information on the status of Federal, 

5 State, and local public and private elder justice 

6 activities; 

7 ‘‘(B) recommendations (including rec8 ommended priorities) regarding— 

9 ‘‘(i) elder justice programs, research, 

10 training, services, practice, enforcement, 

11 and coordination; 

12 ‘‘(ii) coordination between entities 

13 pursuing elder justice efforts and those in14 volved in related areas that may inform or 

15 overlap with elder justice efforts, such as 

16 activities to combat violence against women 

17 and child abuse and neglect; and 

18 ‘‘(iii) activities relating to adult fidu19 ciary systems, including guardianship and 

20 other fiduciary arrangements; 

21 ‘‘(C) recommendations for specific modi22 fications needed in Federal and State laws (in23 cluding regulations) or for programs, research, 

24 and training to enhance prevention, detection, 

25 and treatment (including diagnosis) of, interVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00538 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 vention in (including investigation of), and 

2 prosecution of elder abuse, neglect, and exploi3 tation; 

4 ‘‘(D) recommendations on methods for the 

5 most effective coordinated national data collec6 tion with respect to elder justice, and elder 

7 abuse, neglect, and exploitation; and 

8 ‘‘(E) recommendations for a multidisci9 plinary strategic plan to guide the effective and 

10 efficient development of the field of elder jus11 tice. 

12 ‘‘(g) POWERS OF THE ADVISORY BOARD.— 

13 ‘‘(1) INFORMATION FROM FEDERAL AGEN14 CIES.—Subject to the requirements of section 

15 2012(a), the Advisory Board may secure directly 

16 from any Federal department or agency such infor17 mation as the Advisory Board considers necessary to 

18 carry out this section. Upon request of the Chair of 

19 the Advisory Board, the head of such department or 

20 agency shall furnish such information to the Advi21 sory Board. 

22 ‘‘(2) SHARING OF DATA AND REPORTS.—The 

23 Advisory Board may request from any entity pur24 suing elder justice activities under the Elder Justice 

25 Act of 2009 or an amendment made by that Act, 


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1 any data, reports, or recommendations generated in 

2 connection with such activities. 

3 ‘‘(3) POSTAL SERVICES.—The Advisory Board 

4 may use the United States mails in the same man5 ner and under the same conditions as other depart6 ments and agencies of the Federal Government. 

7 ‘‘(h) TRAVEL EXPENSES.—The members of the Advi8 sory Board shall not receive compensation for the perform9 ance of services for the Advisory Board. The members 

10 shall be allowed travel expenses for up to 4 meetings per 

11 year, including per diem in lieu of subsistence, at rates 

12 authorized for employees of agencies under subchapter I 

13 of chapter 57 of title 5, United States Code, while away 

14 from their homes or regular places of business in the per15 formance of services for the Advisory Board. Notwith16 standing section 1342 of title 31, United States Code, the 

17 Secretary may accept the voluntary and uncompensated 

18 services of the members of the Advisory Board. 

19 ‘‘(i) DETAIL OF GOVERNMENT EMPLOYEES.—Any 

20 Federal Government employee may be detailed to the Ad21 visory Board without reimbursement, and such detail shall 

22 be without interruption or loss of civil service status or 

23 privilege. 


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1 ‘‘(j) STATUS AS PERMANENT ADVISORY COM2 MITTEE.—Section 14 of the Federal Advisory Committee 

3 Act (5 U.S.C. App.) shall not apply to the advisory board. 

4 ‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated such sums as are nec6 essary to carry out this section. 

7 ‘‘SEC. 2023. RESEARCH PROTECTIONS. 

8 ‘‘(a) GUIDELINES.—The Secretary shall promulgate 

9 guidelines to assist researchers working in the area of 

10 elder abuse, neglect, and exploitation, with issues relating 

11 to human subject protections. 

12 ‘‘(b) DEFINITION OF LEGALLY AUTHORIZED REP13 RESENTATIVE FOR APPLICATION OF REGULATIONS.—For 

14 purposes of the application of subpart A of part 46 of title 

15 45, Code of Federal Regulations, to research conducted 

16 under this subpart, the term ‘legally authorized represent17 ative’ means, unless otherwise provided by law, the indi18 vidual or judicial or other body authorized under the appli19 cable law to consent to medical treatment on behalf of an20 other person. 

21 ‘‘SEC. 2024. AUTHORIZATION OF APPROPRIATIONS. 

22 ‘‘There are authorized to be appropriated to carry out 

23 this subpart— 

24 ‘‘(1) for fiscal year 2011, $6,500,000; and 


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1 ‘‘(2) for each of fiscal years 2012 through 

2 2014, $7,000,000. 

3 ‘‘Subpart B—Elder Abuse, Neglect, and Exploitation 

4 Forensic Centers 

5 ‘‘SEC. 2031. ESTABLISHMENT AND SUPPORT OF ELDER 

6 ABUSE, NEGLECT, AND EXPLOITATION FO7 RENSIC CENTERS. 

8 ‘‘(a) IN GENERAL.—The Secretary, in consultation 

9 with the Attorney General, shall make grants to eligible 

10 entities to establish and operate stationary and mobile fo11 rensic centers, to develop forensic expertise regarding, and 

12 provide services relating to, elder abuse, neglect, and ex13 ploitation. 

14 ‘‘(b) STATIONARY FORENSIC CENTERS.—The Sec15 retary shall make 4 of the grants described in subsection 

16 (a) to institutions of higher education with demonstrated 

17 expertise in forensics or commitment to preventing or 

18 treating elder abuse, neglect, or exploitation, to establish 

19 and operate stationary forensic centers. 

20 ‘‘(c) MOBILE CENTERS.—The Secretary shall make 

21 6 of the grants described in subsection (a) to appropriate 

22 entities to establish and operate mobile forensic centers. 

23 ‘‘(d) AUTHORIZED ACTIVITIES.— 

24 ‘‘(1) DEVELOPMENT OF FORENSIC MARKERS

25 AND METHODOLOGIES.—An eligible entity that reVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00542 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ceives a grant under this section shall use funds 

2 made available through the grant to assist in deter3 mining whether abuse, neglect, or exploitation oc4 curred and whether a crime was committed and to 

5 conduct research to describe and disseminate infor6 mation on— 

7 ‘‘(A) forensic markers that indicate a case 

8 in which elder abuse, neglect, or exploitation 

9 may have occurred; and 

10 ‘‘(B) methodologies for determining, in 

11 such a case, when and how health care, emer12 gency service, social and protective services, and 

13 legal service providers should intervene and 

14 when the providers should report the case to 

15 law enforcement authorities. 

16 ‘‘(2) DEVELOPMENT OF FORENSIC EXPER17 TISE.—An eligible entity that receives a grant under 

18 this section shall use funds made available through 

19 the grant to develop forensic expertise regarding 

20 elder abuse, neglect, and exploitation in order to 

21 provide medical and forensic evaluation, therapeutic 

22 intervention, victim support and advocacy, case re23 view, and case tracking. 

24 ‘‘(3) COLLECTION OF EVIDENCE.—The Sec25 retary, in coordination with the Attorney General, 


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1 shall use data made available by grant recipients 

2 under this section to develop the capacity of geriatric 

3 health care professionals and law enforcement to col4 lect forensic evidence, including collecting forensic 

5 evidence relating to a potential determination of 

6 elder abuse, neglect, or exploitation. 

7 ‘‘(e) APPLICATION.—To be eligible to receive a grant 

8 under this section, an entity shall submit an application 

9 to the Secretary at such time, in such manner, and con10 taining such information as the Secretary may require. 

11 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to carry out this sec13 tion— 

14 ‘‘(1) for fiscal year 2011, $4,000,000; 

15 ‘‘(2) for fiscal year 2012, $6,000,000; and 

16 ‘‘(3) for each of fiscal years 2013 and 2014, 

17 $8,000,000. 

18 ‘‘PART II—PROGRAMS TO PROMOTE ELDER 

19 JUSTICE 

20 ‘‘SEC. 2041. ENHANCEMENT OF LONG-TERM CARE. 

21 ‘‘(a) GRANTS AND INCENTIVES FOR LONG-TERM

22 CARE STAFFING.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall carry 

24 out activities, including activities described in para25 graphs (2) and (3), to provide incentives for individVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00544 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 uals to train for, seek, and maintain employment 

2 providing direct care in long-term care. 

3 ‘‘(2) SPECIFIC PROGRAMS TO ENHANCE TRAIN4 ING, RECRUITMENT, AND RETENTION OF STAFF.— 

5 ‘‘(A) COORDINATION WITH SECRETARY OF

6 LABOR TO RECRUIT AND TRAIN LONG-TERM

7 CARE STAFF.—The Secretary shall coordinate 

8 activities under this subsection with the Sec9 retary of Labor in order to provide incentives 

10 for individuals to train for and seek employ11 ment providing direct care in long-term care. 

12 ‘‘(B) CAREER LADDERS AND WAGE OR

13 BENEFIT INCREASES TO INCREASE STAFFING IN

14 LONG-TERM CARE.— 

15 ‘‘(i) IN GENERAL.—The Secretary 

16 shall make grants to eligible entities to 

17 carry out programs through which the en18 tities— 

19 ‘‘(I) offer, to employees who pro20 vide direct care to residents of an eli21 gible entity or individuals receiving 

22 community-based long-term care from 

23 an eligible entity, continuing training 

24 and varying levels of certification, 

25 based on observed clinical care pracVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00545 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tices and the amount of time the em2 ployees spend providing direct care; 

3 and 

4 ‘‘(II) provide, or make arrange5 ments to provide, bonuses or other in6 creased compensation or benefits to 

7 employees who achieve certification 

8 under such a program. 

9 ‘‘(ii) APPLICATION.—To be eligible to 

10 receive a grant under this subparagraph, 

11 an eligible entity shall submit an applica12 tion to the Secretary at such time, in such 

13 manner, and containing such information 

14 as the Secretary may require (which may 

15 include evidence of consultation with the 

16 State in which the eligible entity is located 

17 with respect to carrying out activities fund18 ed under the grant). 

19 ‘‘(iii) AUTHORITY TO LIMIT NUMBER

20 OF APPLICANTS.—Nothing in this subpara21 graph shall be construed as prohibiting the 

22 Secretary from limiting the number of ap23 plicants for a grant under this subpara24 graph. 


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1 ‘‘(3) SPECIFIC PROGRAMS TO IMPROVE MAN2 AGEMENT PRACTICES.— 

3 ‘‘(A) IN GENERAL.—The Secretary shall 

4 make grants to eligible entities to enable the en5 tities to provide training and technical assist6 ance. 

7 ‘‘(B) AUTHORIZED ACTIVITIES.—An eligi8 ble entity that receives a grant under subpara9 graph (A) shall use funds made available 

10 through the grant to provide training and tech11 nical assistance regarding management prac12 tices using methods that are demonstrated to 

13 promote retention of individuals who provide di14 rect care, such as— 

15 ‘‘(i) the establishment of standard 

16 human resource policies that reward high 

17 performance, including policies that pro18 vide for improved wages and benefits on 

19 the basis of job reviews; 

20 ‘‘(ii) the establishment of motivational 

21 and thoughtful work organization prac22 tices; 

23 ‘‘(iii) the creation of a workplace cul24 ture that respects and values caregivers 

25 and their needs; 


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1 ‘‘(iv) the promotion of a workplace 

2 culture that respects the rights of residents 

3 of an eligible entity or individuals receiving 

4 community-based long-term care from an 

5 eligible entity and results in improved care 

6 for the residents or the individuals; and 

7 ‘‘(v) the establishment of other pro8 grams that promote the provision of high 

9 quality care, such as a continuing edu10 cation program that provides additional 

11 hours of training, including on-the-job 

12 training, for employees who are certified 

13 nurse aides. 

14 ‘‘(C) APPLICATION.—To be eligible to re15 ceive a grant under this paragraph, an eligible 

16 entity shall submit an application to the Sec17 retary at such time, in such manner, and con18 taining such information as the Secretary may 

19 require (which may include evidence of con20 sultation with the State in which the eligible en21 tity is located with respect to carrying out ac22 tivities funded under the grant). 

23 ‘‘(D) AUTHORITY TO LIMIT NUMBER OF

24 APPLICANTS.—Nothing in this paragraph shall 

25 be construed as prohibiting the Secretary from 


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1 limiting the number of applicants for a grant 

2 under this paragraph. 

3 ‘‘(4) ACCOUNTABILITY MEASURES.—The Sec4 retary shall develop accountability measures to en5 sure that the activities conducted using funds made 

6 available under this subsection benefit individuals 

7 who provide direct care and increase the stability of 

8 the long-term care workforce. 

9 ‘‘(5) DEFINITIONS.—In this subsection: 

10 ‘‘(A) COMMUNITY-BASED LONG-TERM

11 CARE.—The term ‘community-based long-term 

12 care’ has the meaning given such term by the 

13 Secretary. 

14 ‘‘(B) ELIGIBLE ENTITY.—The term ‘eligi15 ble entity’ means the following: 

16 ‘‘(i) A long-term care facility. 

17 ‘‘(ii) A community-based long-term 

18 care entity (as defined by the Secretary). 

19 ‘‘(b) CERTIFIED EHR TECHNOLOGY GRANT PRO20 GRAM.— 

21 ‘‘(1) GRANTS AUTHORIZED.—The Secretary is 

22 authorized to make grants to long-term care facili23 ties for the purpose of assisting such entities in off24 setting the costs related to purchasing, leasing, de25 veloping, and implementing certified EHR techVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00549 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 nology (as defined in section 1848(o)(4)) designed to 

2 improve patient safety and reduce adverse events 

3 and health care complications resulting from medica4 tion errors. 

5 ‘‘(2) USE OF GRANT FUNDS.—Funds provided 

6 under grants under this subsection may be used for 

7 any of the following: 

8 ‘‘(A) Purchasing, leasing, and installing 

9 computer software and hardware, including 

10 handheld computer technologies. 

11 ‘‘(B) Making improvements to existing 

12 computer software and hardware. 

13 ‘‘(C) Making upgrades and other improve14 ments to existing computer software and hard15 ware to enable e-prescribing. 

16 ‘‘(D) Providing education and training to 

17 eligible long-term care facility staff on the use 

18 of such technology to implement the electronic 

19 transmission of prescription and patient infor20 mation. 

21 ‘‘(3) APPLICATION.— 

22 ‘‘(A) IN GENERAL.—To be eligible to re23 ceive a grant under this subsection, a long-term 

24 care facility shall submit an application to the 

25 Secretary at such time, in such manner, and 


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1 containing such information as the Secretary 

2 may require (which may include evidence of 

3 consultation with the State in which the long4 term care facility is located with respect to car5 rying out activities funded under the grant). 

6 ‘‘(B) AUTHORITY TO LIMIT NUMBER OF

7 APPLICANTS.—Nothing in this subsection shall 

8 be construed as prohibiting the Secretary from 

9 limiting the number of applicants for a grant 

10 under this subsection. 

11 ‘‘(4) PARTICIPATION IN STATE HEALTH EX12 CHANGES.—A long-term care facility that receives a 

13 grant under this subsection shall, where available, 

14 participate in activities conducted by a State or a 

15 qualified State-designated entity (as defined in sec16 tion 3013(f) of the Public Health Service Act) under 

17 a grant under section 3013 of the Public Health 

18 Service Act to coordinate care and for other pur19 poses determined appropriate by the Secretary. 

20 ‘‘(5) ACCOUNTABILITY MEASURES.—The Sec21 retary shall develop accountability measures to en22 sure that the activities conducted using funds made 

23 available under this subsection help improve patient 

24 safety and reduce adverse events and health care 

25 complications resulting from medication errors. 


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1 ‘‘(c) ADOPTION OF STANDARDS FOR TRANSACTIONS

2 INVOLVING CLINICAL DATA BY LONG-TERM CARE FA3 CILITIES.— 

4 ‘‘(1) STANDARDS AND COMPATIBILITY.—The 

5 Secretary shall adopt electronic standards for the ex6 change of clinical data by long-term care facilities, 

7 including, where available, standards for messaging 

8 and nomenclature. Standards adopted by the Sec9 retary under the preceding sentence shall be compat10 ible with standards established under part C of title 

11 XI, standards established under subsections 

12 (b)(2)(B)(i) and (e)(4) of section 1860D–4, stand13 ards adopted under section 3004 of the Public 

14 Health Service Act, and general health information 

15 technology standards. 

16 ‘‘(2) ELECTRONIC SUBMISSION OF DATA TO

17 THE SECRETARY.— 

18 ‘‘(A) IN GENERAL.—Not later than 10 

19 years after the date of enactment of the Elder 

20 Justice Act of 2009, the Secretary shall have 

21 procedures in place to accept the optional elec22 tronic submission of clinical data by long-term 

23 care facilities pursuant to the standards adopt24 ed under paragraph (1). 


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

2 in this subsection shall be construed to require 

3 a long-term care facility to submit clinical data 

4 electronically to the Secretary. 

5 ‘‘(3) REGULATIONS.—The Secretary shall pro6 mulgate regulations to carry out this subsection. 

7 Such regulations shall require a State, as a condi8 tion of the receipt of funds under this part, to con9 duct such data collection and reporting as the Sec10 retary determines are necessary to satisfy the re11 quirements of this subsection. 

12 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated to carry out this sec14 tion— 

15 ‘‘(1) for fiscal year 2011, $20,000,000; 

16 ‘‘(2) for fiscal year 2012, $17,500,000; and 

17 ‘‘(3) for each of fiscal years 2013 and 2014, 

18 $15,000,000. 

19 ‘‘SEC. 2042. ADULT PROTECTIVE SERVICES FUNCTIONS AND 

20 GRANT PROGRAMS. 

21 ‘‘(a) SECRETARIAL RESPONSIBILITIES.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall ensure 

23 that the Department of Health and Human Serv24 ices— 


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1 ‘‘(A) provides funding authorized by this 

2 part to State and local adult protective services 

3 offices that investigate reports of the abuse, ne4 glect, and exploitation of elders; 

5 ‘‘(B) collects and disseminates data annu6 ally relating to the abuse, exploitation, and ne7 glect of elders in coordination with the Depart8 ment of Justice; 

9 ‘‘(C) develops and disseminates informa10 tion on best practices regarding, and provides 

11 training on, carrying out adult protective serv12 ices; 

13 ‘‘(D) conducts research related to the pro14 vision of adult protective services; and 

15 ‘‘(E) provides technical assistance to 

16 States and other entities that provide or fund 

17 the provision of adult protective services, in18 cluding through grants made under subsections 

19 (b) and (c). 

20 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

21 There are authorized to be appropriated to carry out 

22 this subsection, $3,000,000 for fiscal year 2011 and 

23 $4,000,000 for each of fiscal years 2012 through 

24 2014. 


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1 ‘‘(b) GRANTS TO ENHANCE THE PROVISION OF

2 ADULT PROTECTIVE SERVICES.— 

3 ‘‘(1) ESTABLISHMENT.—There is established an 

4 adult protective services grant program under which 

5 the Secretary shall annually award grants to States 

6 in the amounts calculated under paragraph (2) for 

7 the purposes of enhancing adult protective services 

8 provided by States and local units of government. 

9 ‘‘(2) AMOUNT OF PAYMENT.— 

10 ‘‘(A) IN GENERAL.—Subject to the avail11 ability of appropriations and subparagraphs (B) 

12 and (C), the amount paid to a State for a fiscal 

13 year under the program under this subsection 

14 shall equal the amount appropriated for that 

15 year to carry out this subsection multiplied by 

16 the percentage of the total number of elders 

17 who reside in the United States who reside in 

18 that State. 

19 ‘‘(B) GUARANTEED MINIMUM PAYMENT

20 AMOUNT.— 

21 ‘‘(i) 50 STATES.—Subject to clause 

22 (ii), if the amount determined under sub23 paragraph (A) for a State for a fiscal year 

24 is less than 0.75 percent of the amount ap25 propriated for such year, the Secretary 


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1 shall increase such determined amount so 

2 that the total amount paid under this sub3 section to the State for the year is equal 

4 to 0.75 percent of the amount so appro5 priated. 

6 ‘‘(ii) TERRITORIES.—In the case of a 

7 State other than 1 of the 50 States, clause 

8 (i) shall be applied as if each reference to 

9 ‘0.75’ were a reference to ‘0.1’. 

10 ‘‘(C) PRO RATA REDUCTIONS.—The Sec11 retary shall make such pro rata reductions to 

12 the amounts described in subparagraph (A) as 

13 are necessary to comply with the requirements 

14 of subparagraph (B). 

15 ‘‘(3) AUTHORIZED ACTIVITIES.— 

16 ‘‘(A) ADULT PROTECTIVE SERVICES.— 

17 Funds made available pursuant to this sub18 section may only be used by States and local 

19 units of government to provide adult protective 

20 services and may not be used for any other pur21 pose. 

22 ‘‘(B) USE BY AGENCY.—Each State receiv23 ing funds pursuant to this subsection shall pro24 vide such funds to the agency or unit of State 


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1 government having legal responsibility for pro2 viding adult protective services within the State. 

3 ‘‘(C) SUPPLEMENT NOT SUPPLANT.—Each 

4 State or local unit of government shall use 

5 funds made available pursuant to this sub6 section to supplement and not supplant other 

7 Federal, State, and local public funds expended 

8 to provide adult protective services in the State. 

9 ‘‘(4) STATE REPORTS.—Each State receiving 

10 funds under this subsection shall submit to the Sec11 retary, at such time and in such manner as the Sec12 retary may require, a report on the number of elders 

13 served by the grants awarded under this subsection. 

14 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.— 

15 There are authorized to be appropriated to carry out 

16 this subsection, $100,000,000 for each of fiscal 

17 years 2011 through 2014. 

18 ‘‘(c) STATE DEMONSTRATION PROGRAMS.— 

19 ‘‘(1) ESTABLISHMENT.—The Secretary shall 

20 award grants to States for the purposes of con21 ducting demonstration programs in accordance with 

22 paragraph (2). 

23 ‘‘(2) DEMONSTRATION PROGRAMS.—Funds 

24 made available pursuant to this subsection may be 


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1 used by States and local units of government to con2 duct demonstration programs that test— 

3 ‘‘(A) training modules developed for the 

4 purpose of detecting or preventing elder abuse; 

5 ‘‘(B) methods to detect or prevent financial 

6 exploitation of elders; 

7 ‘‘(C) methods to detect elder abuse; 

8 ‘‘(D) whether training on elder abuse 

9 forensics enhances the detection of elder abuse 

10 by employees of the State or local unit of gov11 ernment; or 

12 ‘‘(E) other matters relating to the detec13 tion or prevention of elder abuse. 

14 ‘‘(3) APPLICATION.—To be eligible to receive a 

15 grant under this subsection, a State shall submit an 

16 application to the Secretary at such time, in such 

17 manner, and containing such information as the Sec18 retary may require. 

19 ‘‘(4) STATE REPORTS.—Each State that re20 ceives funds under this subsection shall submit to 

21 the Secretary a report at such time, in such manner, 

22 and containing such information as the Secretary 

23 may require on the results of the demonstration pro24 gram conducted by the State using funds made 

25 available under this subsection. 


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1 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.— 

2 There are authorized to be appropriated to carry out 

3 this subsection, $25,000,000 for each of fiscal years 

4 2011 through 2014. 

5 ‘‘SEC. 2043. LONG-TERM CARE OMBUDSMAN PROGRAM 

6 GRANTS AND TRAINING. 

7 ‘‘(a) GRANTS TO SUPPORT THE LONG-TERM CARE

8 OMBUDSMAN PROGRAM.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall make 

10 grants to eligible entities with relevant expertise and 

11 experience in abuse and neglect in long-term care fa12 cilities or long-term care ombudsman programs and 

13 responsibilities, for the purpose of— 

14 ‘‘(A) improving the capacity of State long15 term care ombudsman programs to respond to 

16 and resolve complaints about abuse and neglect; 

17 ‘‘(B) conducting pilot programs with State 

18 long-term care ombudsman offices or local om19 budsman entities; and 

20 ‘‘(C) providing support for such State 

21 long-term care ombudsman programs and such 

22 pilot programs (such as through the establish23 ment of a national long-term care ombudsman 

24 resource center). 


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1 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

2 There are authorized to be appropriated to carry out 

3 this subsection— 

4 ‘‘(A) for fiscal year 2011, $5,000,000; 

5 ‘‘(B) for fiscal year 2012, $7,500,000; and 

6 ‘‘(C) for each of fiscal years 2013 and 

7 2014, $10,000,000. 

8 ‘‘(b) OMBUDSMAN TRAINING PROGRAMS.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall estab10 lish programs to provide and improve ombudsman 

11 training with respect to elder abuse, neglect, and ex12 ploitation for national organizations and State long13 term care ombudsman programs. 

14 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

15 There are authorized to be appropriated to carry out 

16 this subsection, for each of fiscal years 2011 

17 through 2014, $10,000,000. 

18 ‘‘SEC. 2044. PROVISION OF INFORMATION REGARDING, AND 

19 EVALUATIONS OF, ELDER JUSTICE PRO20 GRAMS. 

21 ‘‘(a) PROVISION OF INFORMATION.—To be eligible to 

22 receive a grant under this part, an applicant shall agree— 

23 ‘‘(1) except as provided in paragraph (2), to 

24 provide the eligible entity conducting an evaluation 

25 under subsection (b) of the activities funded through 


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1 the grant with such information as the eligible entity 

2 may require in order to conduct such evaluation; or 

3 ‘‘(2) in the case of an applicant for a grant 

4 under section 2041(b), to provide the Secretary with 

5 such information as the Secretary may require to 

6 conduct an evaluation or audit under subsection (c). 

7 ‘‘(b) USE OF ELIGIBLE ENTITIES TO CONDUCT

8 EVALUATIONS.— 

9 ‘‘(1) EVALUATIONS REQUIRED.—Except as pro10 vided in paragraph (2), the Secretary shall— 

11 ‘‘(A) reserve a portion (not less than 2 per12 cent) of the funds appropriated with respect to 

13 each program carried out under this part; and 

14 ‘‘(B) use the funds reserved under sub15 paragraph (A) to provide assistance to eligible 

16 entities to conduct evaluations of the activities 

17 funded under each program carried out under 

18 this part. 

19 ‘‘(2) CERTIFIED EHR TECHNOLOGY GRANT PRO20 GRAM NOT INCLUDED.—The provisions of this sub21 section shall not apply to the certified EHR tech22 nology grant program under section 2041(b). 

23 ‘‘(3) AUTHORIZED ACTIVITIES.—A recipient of 

24 assistance described in paragraph (1)(B) shall use 

25 the funds made available through the assistance to 


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1 conduct a validated evaluation of the effectiveness of 

2 the activities funded under a program carried out 

3 under this part. 

4 ‘‘(4) APPLICATIONS.—To be eligible to receive 

5 assistance under paragraph (1)(B), an entity shall 

6 submit an application to the Secretary at such time, 

7 in such manner, and containing such information as 

8 the Secretary may require, including a proposal for 

9 the evaluation. 

10 ‘‘(5) REPORTS.—Not later than a date specified 

11 by the Secretary, an eligible entity receiving assist12 ance under paragraph (1)(B) shall submit to the 

13 Secretary, the Committee on Ways and Means and 

14 the Committee on Energy and Commerce of the 

15 House of Representatives, and the Committee on Fi16 nance of the Senate a report containing the results 

17 of the evaluation conducted using such assistance to18 gether with such recommendations as the entity de19 termines to be appropriate. 

20 ‘‘(c) EVALUATIONS AND AUDITS OF CERTIFIED EHR 

21 TECHNOLOGY GRANT PROGRAM BY THE SECRETARY.— 

22 ‘‘(1) EVALUATIONS.—The Secretary shall con23 duct an evaluation of the activities funded under the 

24 certified EHR technology grant program under sec25 tion 2041(b). Such evaluation shall include an evalVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00562 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 uation of whether the funding provided under the 

2 grant is expended only for the purposes for which it 

3 is made. 

4 ‘‘(2) AUDITS.—The Secretary shall conduct ap5 propriate audits of grants made under section 

6 2041(b). 

7 ‘‘SEC. 2045. REPORT. 

8 ‘‘Not later than October 1, 2014, the Secretary shall 

9 submit to the Elder Justice Coordinating Council estab10 lished under section 2021, the Committee on Ways and 

11 Means and the Committee on Energy and Commerce of 

12 the House of Representatives, and the Committee on Fi13 nance of the Senate a report— 

14 ‘‘(1) compiling, summarizing, and analyzing the 

15 information contained in the State reports submitted 

16 under subsections (b)(4) and (c)(4) of section 2042; 

17 and 

18 ‘‘(2) containing such recommendations for legis19 lative or administrative action as the Secretary de20 termines to be appropriate.’’. 

21 (2) OPTION FOR STATE PLAN UNDER PROGRAM

22 FOR TEMPORARY ASSISTANCE FOR NEEDY FAMI23 LIES.— 

24 (A) IN GENERAL.—Section 402(a)(1)(B) of 

25 the Social Security Act (42 U.S.C. 


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1 602(a)(1)(B)) is amended by adding at the end 

2 the following new clause: 

3 ‘‘(v) The document shall indicate 

4 whether the State intends to assist individ5 uals to train for, seek, and maintain em6 ployment— 

7 ‘‘(I) providing direct care in a 

8 long-term care facility (as such terms 

9 are defined under section 2011); or 

10 ‘‘(II) in other occupations related 

11 to elder care determined appropriate 

12 by the State for which the State iden13 tifies an unmet need for service per14 sonnel, 

15 and, if so, shall include an overview of such 

16 assistance.’’. 

17 (B) EFFECTIVE DATE.—The amendment 

18 made by subparagraph (A) shall take effect on 

19 January 1, 2011. 

20 (b) PROTECTING RESIDENTS OF LONG-TERM CARE

21 FACILITIES.— 

22 (1) NATIONAL TRAINING INSTITUTE FOR SUR23 VEYORS.— 

24 (A) IN GENERAL.—The Secretary of 

25 Health and Human Services shall enter into a 


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1 contract with an entity for the purpose of estab2 lishing and operating a National Training Insti3 tute for Federal and State surveyors. Such In4 stitute shall provide and improve the training of 

5 surveyors with respect to investigating allega6 tions of abuse, neglect, and misappropriation of 

7 property in programs and long-term care facili8 ties that receive payments under title XVIII or 

9 XIX of the Social Security Act. 

10 (B) ACTIVITIES CARRIED OUT BY THE IN11 STITUTE.—The contract entered into under 

12 subparagraph (A) shall require the Institute es13 tablished and operated under such contract to 

14 carry out the following activities: 

15 (i) Assess the extent to which State 

16 agencies use specialized surveyors for the 

17 investigation of reported allegations of 

18 abuse, neglect, and misappropriation of 

19 property in such programs and long-term 

20 care facilities. 

21 (ii) Evaluate how the competencies of 

22 surveyors may be improved to more effec23 tively investigate reported allegations of 

24 such abuse, neglect, and misappropriation 

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1 eral and State agencies on the evaluations 

2 conducted. 

3 (iii) Provide a national program of 

4 training, tools, and technical assistance to 

5 Federal and State surveyors on inves6 tigating reports of such abuse, neglect, and 

7 misappropriation of property. 

8 (iv) Develop and disseminate informa9 tion on best practices for the investigation 

10 of such abuse, neglect, and misappropria11 tion of property. 

12 (v) Assess the performance of State 

13 complaint intake systems, in order to en14 sure that the intake of complaints occurs 

15 24 hours per day, 7 days a week (including 

16 holidays). 

17 (vi) To the extent approved by the 

18 Secretary of Health and Human Services, 

19 provide a national 24 hours per day, 7 

20 days a week (including holidays), back-up 

21 system to State complaint intake systems 

22 in order to ensure optimum national re23 sponsiveness to complaints of such abuse, 

24 neglect, and misappropriation of property. 


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1 (vii) Analyze and report annually on 

2 the following: 

3 (I) The total number and sources 

4 of complaints of such abuse, neglect, 

5 and misappropriation of property. 

6 (II) The extent to which such 

7 complaints are referred to law en8 forcement agencies. 

9 (III) General results of Federal 

10 and State investigations of such com11 plaints. 

12 (viii) Conduct a national study of the 

13 cost to State agencies of conducting com14 plaint investigations of skilled nursing fa15 cilities and nursing facilities under sections 

16 1819 and 1919, respectively, of the Social 

17 Security Act (42 U.S.C. 1395i–3; 1396r), 

18 and making recommendations to the Sec19 retary of Health and Human Services with 

20 respect to options to increase the efficiency 

21 and cost-effectiveness of such investiga22 tions. 

23 (C) AUTHORIZATION.—There are author24 ized to be appropriated to carry out this paraVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00567 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 graph, for the period of fiscal years 2011 

2 through 2014, $12,000,000. 

3 (2) GRANTS TO STATE SURVEY AGENCIES.— 

4 (A) IN GENERAL.—The Secretary of 

5 Health and Human Services shall make grants 

6 to State agencies that perform surveys of 

7 skilled nursing facilities or nursing facilities 

8 under sections 1819 or 1919, respectively, of 

9 the Social Security Act (42 U.S.C. 1395i–3; 

10 1395r). 

11 (B) USE OF FUNDS.—A grant awarded 

12 under subparagraph (A) shall be used for the 

13 purpose of designing and implementing com14 plaint investigations systems that— 

15 (i) promptly prioritize complaints in 

16 order to ensure a rapid response to the 

17 most serious and urgent complaints; 

18 (ii) respond to complaints with opti19 mum effectiveness and timeliness; and 

20 (iii) optimize the collaboration be21 tween local authorities, consumers, and 

22 providers, including— 

23 (I) such State agency; 

24 (II) the State Long-Term Care 

25 Ombudsman; 


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1 (III) local law enforcement agen2 cies; 

3 (IV) advocacy and consumer or4 ganizations; 

5 (V) State aging units; 

6 (VI) Area Agencies on Aging; 

7 and 

8 (VII) other appropriate entities. 

9 (C) AUTHORIZATION.—There are author10 ized to be appropriated to carry out this para11 graph, for each of fiscal years 2011 through 

12 2014, $5,000,000. 

13 (3) REPORTING OF CRIMES IN FEDERALLY

14 FUNDED LONG-TERM CARE FACILITIES.—Part A of 

15 title XI of the Social Security Act (42 U.S.C. 1301 

16 et seq.), as amended by sections 1611(c), is amend17 ed by inserting after section 1150A the following 

18 new section: 

19 ‘‘REPORTING TO LAW ENFORCEMENT OF CRIMES OCCUR20 RING IN FEDERALLY FUNDED LONG-TERM CARE FA21 CILITIES

22 ‘‘SEC. 1150B. (a) DETERMINATION AND NOTIFICA23 TION.— 

24 ‘‘(1) DETERMINATION.—The owner or operator 

25 of each long-term care facility that receives Federal 

26 funds under this Act shall annually determine 


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1 whether the facility received at least $10,000 in such 

2 Federal funds during the preceding year. 

3 ‘‘(2) NOTIFICATION.—If the owner or operator 

4 determines under paragraph (1) that the facility re5 ceived at least $10,000 in such Federal funds during 

6 the preceding year, such owner or operator shall an7 nually notify each covered individual (as defined in 

8 paragraph (3)) of that individual’s obligation to 

9 comply with the reporting requirements described in 

10 subsection (b). 

11 ‘‘(3) COVERED INDIVIDUAL DEFINED.—In this 

12 section, the term ‘covered individual’ means each in13 dividual who is an owner, operator, employee, man14 ager, agent, or contractor of a long-term care facility 

15 that is the subject of a determination described in 

16 paragraph (1). 

17 ‘‘(b) REPORTING REQUIREMENTS.— 

18 ‘‘(1) IN GENERAL.—Each covered individual 

19 shall report to the Secretary and 1 or more law en20 forcement entities for the political subdivision in 

21 which the facility is located any reasonable suspicion 

22 of a crime (as defined by the law of the applicable 

23 political subdivision) against any individual who is a 

24 resident of, or is receiving care from, the facility. 


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1 ‘‘(2) TIMING.—If the events that cause the sus2 picion— 

3 ‘‘(A) result in serious bodily injury, the in4 dividual shall report the suspicion immediately, 

5 but not later than 2 hours after forming the 

6 suspicion; and 

7 ‘‘(B) do not result in serious bodily injury, 

8 the individual shall report the suspicion not 

9 later than 24 hours after forming the suspicion. 

10 ‘‘(c) PENALTIES.— 

11 ‘‘(1) IN GENERAL.—If a covered individual vio12 lates subsection (b)— 

13 ‘‘(A) the covered individual shall be subject 

14 to a civil money penalty of not more than 

15 $200,000; and 

16 ‘‘(B) the Secretary may make a determina17 tion in the same proceeding to exclude the cov18 ered individual from participation in any Fed19 eral health care program (as defined in section 

20 1128B(f)). 

21 ‘‘(2) INCREASED HARM.—If a covered indi22 vidual violates subsection (b) and the violation exac23 erbates the harm to the victim of the crime or re24 sults in harm to another individual— 


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1 ‘‘(A) the covered individual shall be subject 

2 to a civil money penalty of not more than 

3 $300,000; and 

4 ‘‘(B) the Secretary may make a determina5 tion in the same proceeding to exclude the cov6 ered individual from participation in any Fed7 eral health care program (as defined in section 

8 1128B(f)). 

9 ‘‘(3) EXCLUDED INDIVIDUAL.—During any pe10 riod for which a covered individual is classified as an 

11 excluded individual under paragraph (1)(B) or 

12 (2)(B), a long-term care facility that employs such 

13 individual shall be ineligible to receive Federal funds 

14 under this Act. 

15 ‘‘(4) EXTENUATING CIRCUMSTANCES.— 

16 ‘‘(A) IN GENERAL.—The Secretary may 

17 take into account the financial burden on pro18 viders with underserved populations in deter19 mining any penalty to be imposed under this 

20 subsection. 

21 ‘‘(B) UNDERSERVED POPULATION DE22 FINED.—In this paragraph, the term ‘under23 served population’ means the population of an 

24 area designated by the Secretary as an area 

25 with a shortage of elder justice programs or a 


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1 population group designated by the Secretary 

2 as having a shortage of such programs. Such 

3 areas or groups designated by the Secretary 

4 may include— 

5 ‘‘(i) areas or groups that are geo6 graphically isolated (such as isolated in a 

7 rural area); 

8 ‘‘(ii) racial and ethnic minority popu9 lations; and 

10 ‘‘(iii) populations underserved because 

11 of special needs (such as language barriers, 

12 disabilities, alien status, or age). 

13 ‘‘(d) ADDITIONAL PENALTIES FOR RETALIATION.— 

14 ‘‘(1) IN GENERAL.—A long-term care facility 

15 may not— 

16 ‘‘(A) discharge, demote, suspend, threaten, 

17 harass, or deny a promotion or other employ18 ment-related benefit to an employee, or in any 

19 other manner discriminate against an employee 

20 in the terms and conditions of employment be21 cause of lawful acts done by the employee; or 

22 ‘‘(B) file a complaint or a report against a 

23 nurse or other employee with the appropriate 

24 State professional disciplinary agency because 

25 of lawful acts done by the nurse or employee, 


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1 for making a report, causing a report to be made, 

2 or for taking steps in furtherance of making a report 

3 pursuant to subsection (b)(1). 

4 ‘‘(2) PENALTIES FOR RETALIATION.—If a long5 term care facility violates subparagraph (A) or (B) 

6 of paragraph (1) the facility shall be subject to a 

7 civil money penalty of not more than $200,000 or 

8 the Secretary may classify the entity as an excluded 

9 entity for a period of 2 years pursuant to section 

10 1128(b), or both. 

11 ‘‘(3) REQUIREMENT TO POST NOTICE.—Each 

12 long-term care facility shall post conspicuously in an 

13 appropriate location a sign (in a form specified by 

14 the Secretary) specifying the rights of employees 

15 under this section. Such sign shall include a state16 ment that an employee may file a complaint with the 

17 Secretary against a long-term care facility that vio18 lates the provisions of this subsection and informa19 tion with respect to the manner of filing such a com20 plaint. 

21 ‘‘(e) PROCEDURE.—The provisions of section 1128A 

22 (other than subsections (a) and (b) and the second sen23 tence of subsection (f)) shall apply to a civil money penalty 

24 or exclusion under this section in the same manner as such 


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1 provisions apply to a penalty or proceeding under section 

2 1128A(a). 

3 ‘‘(f) DEFINITIONS.—In this section, the terms ‘elder 

4 justice’, ‘long-term care facility’, and ‘law enforcement’ 

5 have the meanings given those terms in section 2011.’’. 

6 (c) NATIONAL NURSE AIDE REGISTRY.— 

7 (1) DEFINITION OF NURSE AIDE.—In this sub8 section, the term ‘‘nurse aide’’ has the meaning 

9 given that term in sections 1819(b)(5)(F) and 

10 1919(b)(5)(F) of the Social Security Act (42 U.S.C. 

11 1395i–3(b)(5)(F); 1396r(b)(5)(F)). 

12 (2) STUDY AND REPORT.— 

13 (A) IN GENERAL.—The Secretary, in con14 sultation with appropriate government agencies 

15 and private sector organizations, shall conduct 

16 a study on establishing a national nurse aide 

17 registry. 

18 (B) AREAS EVALUATED.—The study con19 ducted under this subsection shall include an 

20 evaluation of— 

21 (i) who should be included in the reg22 istry; 

23 (ii) how such a registry would comply 

24 with Federal and State privacy laws and 

25 regulations; 


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1 (iii) how data would be collected for 

2 the registry; 

3 (iv) what entities and individuals 

4 would have access to the data collected; 

5 (v) how the registry would provide ap6 propriate information regarding violations 

7 of Federal and State law by individuals in8 cluded in the registry; 

9 (vi) how the functions of a national 

10 nurse aide registry would be coordinated 

11 with the nationwide program for national 

12 and State background checks on direct pa13 tient access employees of long-term care 

14 facilities and providers under section 4301; 

15 and 

16 (vii) how the information included in 

17 State nurse aide registries developed and 

18 maintained under sections 1819(e)(2) and 

19 1919(e)(2) of the Social Security Act (42 

20 U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)) 

21 would be provided as part of a national 

22 nurse aide registry. 

23 (C) CONSIDERATIONS.—In conducting the 

24 study and preparing the report required under 

25 this subsection, the Secretary shall take into 


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1 consideration the findings and conclusions of 

2 relevant reports and other relevant resources, 

3 including the following: 

4 (i) The Department of Health and 

5 Human Services Office of Inspector Gen6 eral Report, Nurse Aide Registries: State 

7 Compliance and Practices (February 

8 2005). 

9 (ii) The General Accounting Office 

10 (now known as the Government Account11 ability Office) Report, Nursing Homes: 

12 More Can Be Done to Protect Residents 

13 from Abuse (March 2002). 

14 (iii) The Department of Health and 

15 Human Services Office of the Inspector 

16 General Report, Nurse Aide Registries: 

17 Long-Term Care Facility Compliance and 

18 Practices (July 2005). 

19 (iv) The Department of Health and 

20 Human Services Health Resources and 

21 Services Administration Report, Nursing 

22 Aides, Home Health Aides, and Related 

23 Health Care Occupations—National and 

24 Local Workforce Shortages and Associated 


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1 Data Needs (2004) (in particular with re2 spect to chapter 7 and appendix F). 

3 (v) The 2001 Report to CMS from 

4 the School of Rural Public Health, Texas 

5 A&M University, Preventing Abuse and 

6 Neglect in Nursing Homes: The Role of 

7 Nurse Aide Registries. 

8 (vi) Information included in State 

9 nurse aide registries developed and main10 tained under sections 1819(e)(2) and 

11 1919(e)(2) of the Social Security Act (42 

12 U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)). 

13 (D) REPORT.—Not later than 18 months 

14 after the date of enactment of this Act, the Sec15 retary shall submit to the Elder Justice Coordi16 nating Council established under section 2021 

17 of the Social Security Act, as added by section 

18 1805(a), the Committee on Finance of the Sen19 ate, and the Committee on Ways and Means 

20 and the Committee on Energy and Commerce 

21 of the House of Representatives a report con22 taining the findings and recommendations of 

23 the study conducted under this paragraph. 


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1 (E) FUNDING LIMITATION.—Funding for 

2 the study conducted under this subsection shall 

3 not exceed $500,000. 

4 (3) CONGRESSIONAL ACTION.—After receiving 

5 the report submitted by the Secretary under para6 graph (2)(D), the Committee on Finance of the Sen7 ate and the Committee on Ways and Means and the 

8 Committee on Energy and Commerce of the House 

9 of Representatives shall, as they deem appropriate, 

10 take action based on the recommendations contained 

11 in the report. 

12 (4) AUTHORIZATION OF APPROPRIATIONS.— 

13 There are authorized to be appropriated such sums 

14 as are necessary for the purpose of carrying out this 

15 subsection. 

16 (d) CONFORMING AMENDMENTS.— 

17 (1) TITLE XX.—Title XX of the Social Security 

18 Act (42 U.S.C. 1397 et seq.), as amended by section 

19 1913(a), is amended— 

20 (A) in the heading of section 2001, by 

21 striking ‘‘TITLE’’ and inserting ‘‘SUBTITLE’’; 

22 and 

23 (B) in subtitle 1, by striking ‘‘this title’’ 

24 each place it appears and inserting ‘‘this sub25 title’’. 


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1 (2) TITLE IV.—Title IV of the Social Security 

2 Act (42 U.S.C. 601 et seq.) is amended— 

3 (A) in section 404(d)— 

4 (i) in paragraphs (1)(A), (2)(A), and 

5 (3)(B), by inserting ‘‘subtitle 1 of’’ before 

6 ‘‘title XX’’ each place it appears; 

7 (ii) in the heading of paragraph (2), 

8 by inserting ‘‘SUBTITLE 1 OF’’ before 

9 ‘‘TITLE XX’’; and 

10 (iii) in the heading of paragraph 

11 (3)(B), by inserting ‘‘SUBTITLE 1 OF’’ be12 fore ‘‘TITLE XX’’; and 

13 (B) in sections 422(b), 471(a)(4), 

14 472(h)(1), and 473(b)(2), by inserting ‘‘subtitle 

15 1 of’’ before ‘‘title XX’’ each place it appears. 

16 (3) TITLE XI.—Title XI of the Social Security 

17 Act (42 U.S.C. 1301 et seq.) is amended— 

18 (A) in section 1128(h)(3)— 

19 (i) by inserting ‘‘subtitle 1 of’’ before 

20 ‘‘title XX’’; and 

21 (ii) by striking ‘‘such title’’ and in22 serting ‘‘such subtitle’’; and 

23 (B) in section 1128A(i)(1), by inserting 

24 ‘‘subtitle 1 of’’ before ‘‘title XX’’. 


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1 Subtitle L—Provisions of General 

2 Application 

3 SEC. 1921. PROTECTING AMERICANS AND ENSURING TAX4 PAYER FUNDS IN GOVERNMENT HEALTH 

5 CARE PLANS DO NOT SUPPORT OR FUND 

6 PHYSICIAN-ASSISTED SUICIDE; PROHIBITION 

7 AGAINST DISCRIMINATION ON ASSISTED SUI8 CIDE. 

9 (a) PROTECTING AMERICANS AND ENSURING TAX10 PAYER FUNDS IN GOVERNMENT HEALTH CARE PLANS

11 DO NOT SUPPORT OR FUND PHYSICIAN-ASSISTED SUI12 CIDE.—The Federal Government, and any State or local 

13 government or health care provider that receives Federal 

14 financial assistance under this Act (or under an amend15 ment made by this Act) or any health plan created under 

16 this Act (or under an amendment made by this Act), shall 

17 not pay for or reimburse any health care entity to provide 

18 for any health care item or service furnished for the pur19 pose of causing, or for the purpose of assisting in causing, 

20 the death of any individual, such as by assisted suicide, 

21 euthanasia, or mercy killing. 

22 (b) PROHIBITION AGAINST DISCRIMINATION ON AS23 SISTED SUICIDE.— 

24 (1) IN GENERAL.—The Federal Government, 

25 and any State or local government or health care 


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1 provider that receives Federal financial assistance 

2 under this Act (or under an amendment made by 

3 this Act) or any health plan created under this Act 

4 (or under an amendment made by this Act), may 

5 not subject an individual or institutional health care 

6 entity to discrimination on the basis that the entity 

7 does not provide any health care item or service fur8 nished for the purpose of causing, or for the purpose 

9 of assisting in causing, the death of any individual, 

10 such as by assisted suicide, euthanasia, or mercy 

11 killing. 

12 (2) ADMINISTRATION.—The Office for Civil 

13 Rights of the Department of Health and Human 

14 Services is designated to receive complaints of dis15 crimination based on this subsection. 

16 (c) CONSTRUCTION AND TREATMENT OF CERTAIN

17 SERVICES.—Nothing in subsection (a) or (b) shall be con18 strued to apply to or to affect any limitation relating to— 

19 (1) the withholding or withdrawing of medical 

20 treatment or medical care; 

21 (2) the withholding or withdrawing of nutrition 

22 or hydration; 

23 (3) abortion; or 

24 (4) the use of an item, good, benefit, or service 

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1 comfort, even if such use may increase the risk of 

2 death, so long as such item, good, benefit, or service 

3 is not also furnished for the purpose of causing, or 

4 the purpose of assisting in causing, death, for any 

5 reason. 

6 (d) DEFINITION.—In this section, the term ‘‘health 

7 care entity’’ includes an individual physician or other 

8 health care professional, a hospital, a provider-sponsored 

9 organization, a health maintenance organization, a health 

10 insurance plan, or any other kind of health care facility, 

11 organization, or plan. 

12 SEC. 1922. PROTECTION OF ACCESS TO QUALITY HEALTH 

13 CARE THROUGH THE DEPARTMENT OF VET14 ERANS AFFAIRS AND THE DEPARTMENT OF 

15 DEFENSE. 

16 (a) HEALTH CARE THROUGH DEPARTMENT OF VET17 ERANS AFFAIRS.—Nothing is in this Act shall be con18 strued to prohibit, limit, or otherwise penalize veterans 

19 and dependents eligible for health care through the De20 partment of Veterans Affairs under the laws administered 

21 by the Secretary of Veterans Affairs from receiving timely 

22 access to quality health care in any facility of the Depart23 ment or from any non-Department health care provider 

24 through which the Secretary provides health care. 


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1 (b) HEALTH CARE THROUGH DEPARTMENT OF DE2 FENSE.— 

3 (1) IN GENERAL.—Nothing is in this Act shall 

4 be construed to prohibit, limit, or otherwise penalize 

5 eligible beneficiaries from receiving timely access to 

6 quality health care in any military medical treatment 

7 facility or under the TRICARE program. 

8 (2) DEFINITIONS.—In this subsection: 

9 (A) The term ‘‘eligible beneficiaries’’ 

10 means covered beneficiaries (as defined in sec11 tion 1072(5) of title 10, United States Code) 

12 for purposes of eligible for mental and dental 

13 care under chapter 55 of title 10, United States 

14 Code. 

15 (B) The term ‘‘TRICARE program’’ has 

16 the meaning given that term in section 1072(7) 

17 of title 10, United States Code. 

18 SEC. 1923. CONTINUED APPLICATION OF ANTITRUST LAWS. 

19 Nothing in this Act shall be construed to modify, im20 pair, or supersede the operation of any of the antitrust 

21 laws. For the purposes of this Act, the term ‘‘antitrust 

22 laws’’ has the meaning given such term in subsection (a) 

23 of the first section of the Clayton Act (15 U.S.C. 12(a)). 

24 Such term also includes section 5 of the Federal Trade 


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1 Commission Act (15 U.S.C. 45) to the extent that such 

2 section 5 applies to unfair methods of competition. 

3 TITLE II—PROMOTING DISEASE 

4 PREVENTION AND WELLNESS 

5 Subtitle A—Medicare 

6 SEC. 2001. COVERAGE OF ANNUAL WELLNESS VISIT PRO7 VIDING A PERSONALIZED PREVENTION PLAN. 

8 (a) COVERAGE OF PERSONALIZED PREVENTION

9 PLAN SERVICES.— 

10 (1) IN GENERAL.—Section 1861(s)(2) of the 

11 Social Security Act (42 U.S.C. 1395x(s)(2)) is 

12 amended— 

13 (A) in subparagraph (DD), by striking 

14 ‘‘and’’ at the end; 

15 (B) in subparagraph (EE), by adding 

16 ‘‘and’’ at the end; and 

17 (C) by adding at the end the following new 

18 subparagraph: 

19 ‘‘(FF) personalized prevention plan services (as 

20 defined in subsection (hhh));’’. 

21 (2) CONFORMING AMENDMENTS.—Clauses (i) 

22 and (ii) of section 1861(s)(2)(K) of the Social Secu23 rity Act (42 U.S.C. 1395x(s)(2)(K)) are each 

24 amended by striking ‘‘subsection (ww)(1)’’ and in25 serting ‘‘subsections (ww)(1) and (hhh)’’. 


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1 (b) PERSONALIZED PREVENTION PLAN SERVICES

2 DEFINED.—Section 1861 of the Social Security Act (42 

3 U.S.C. 1395x) is amended by adding at the end the fol4 lowing new subsection: 

5 ‘‘Annual Wellness Visit 

6 ‘‘(hhh)(1) The term ‘personalized prevention plan 

7 services’ means the creation of a plan for an individual— 

8 ‘‘(A) that includes a health risk assessment 

9 (that meets the guidelines established by the Sec10 retary under paragraph (5)(A)) of the individual 

11 that is completed prior to or as part of the same 

12 visit with a health professional described in para13 graph (4); and 

14 ‘‘(B) that— 

15 ‘‘(i) takes into account the results of the 

16 health risk assessment; 

17 ‘‘(ii) contains the elements described in 

18 paragraph (2); and 

19 ‘‘(iii) may contain the elements described 

20 in paragraph (3). 

21 ‘‘(2) Subject to paragraph (5)(H), the elements de22 scribed in this paragraph are the following: 

23 ‘‘(A) The establishment of, or an update to, the 

24 individual’s medical and family history. 


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1 ‘‘(B) The establishment of, or an update to, the 

2 following: 

3 ‘‘(i) A screening schedule for the next 5 to 

4 10 years, as appropriate, based on rec5 ommendations of the United States Preventive 

6 Services Task Force and the individual’s health 

7 status, screening history, and age-appropriate 

8 preventive services covered under this title. 

9 ‘‘(ii) A list of risk factors and conditions 

10 that are of concern with respect to the indi11 vidual, development of a strategy to improve 

12 health status through lifestyle or other interven13 tions that emphasize primary prevention, and 

14 recommendations for appropriate programs and 

15 informational resources for reducing or elimi16 nating such risk factors and conditions. 

17 ‘‘(iii) A list of risk factors and conditions 

18 for which secondary or tertiary prevention 

19 interventions are recommended or are under20 way, and a list of treatment options and their 

21 associated risks and benefits. 

22 ‘‘(iv) A list of all medications currently 

23 prescribed for the individual. 


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1 ‘‘(v) A list of all providers of services and 

2 suppliers regularly involved in providing care to 

3 the individual. 

4 ‘‘(C) The furnishing of personalized health ad5 vice and a referral, as appropriate, to health edu6 cation or preventive counseling services aimed at re7 ducing identified risk factors, or community-based 

8 lifestyle interventions to reduce health risks and pro9 mote wellness, including weight loss, physical activ10 ity, smoking cessation, and nutrition. 

11 ‘‘(D) A measurement of height, weight, body 

12 mass index (or waist circumference, if appropriate), 

13 and blood pressure. 

14 ‘‘(E) Any other element determined appropriate 

15 by the Secretary. 

16 ‘‘(3) Subject to paragraph (5)(H), the elements de17 scribed in this paragraph are the following: 

18 ‘‘(A) Referral for additional testing related to a 

19 diagnosis of a possible chronic condition. 

20 ‘‘(B) In the case of an individual with a diag21 nosed chronic condition, referral for or review of the 

22 available treatment options. 

23 ‘‘(C) The furnishing of or referral for any pre24 ventive services described in subparagraphs (A) and 

25 (B) of subsection (ddd)(3). 


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1 ‘‘(D) Cognitive impairment assessment. 

2 ‘‘(E) Any other element determined appropriate 

3 by the Secretary. 

4 ‘‘(4) A health professional described in this para5 graph is— 

6 ‘‘(A) a physician; 

7 ‘‘(B) a practitioner described in clause (i) of 

8 section 1842(b)(18)(C); or 

9 ‘‘(C) a medical professional (including a health 

10 educator, registered dietitian, or nutrition profes11 sional) or a team of medical professionals, as deter12 mined appropriate by the Secretary, under the su13 pervision of a physician. 

14 ‘‘(5)(A) For purposes of paragraph (1)(A), the Sec15 retary, not later than 1 year after the date of enactment 

16 of the America’s Healthy Future Act of 2009, shall estab17 lish publicly available guidelines for health risk assess18 ments. Such guidelines shall be developed in consultation 

19 with relevant groups and entities and shall provide that 

20 a health risk assessment— 

21 ‘‘(i) identify chronic diseases, modifiable risk 

22 factors, and urgent health needs of the individual; 

23 and 

24 ‘‘(ii) may be furnished— 


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1 ‘‘(I) through an interactive telephonic or 

2 web-based program that meets the standards 

3 established under subparagraph (D); 

4 ‘‘(II) during an encounter with a health 

5 care professional; or 

6 ‘‘(III) through any other means the Sec7 retary determines appropriate to maximize ac8 cessibility and ease of use by beneficiaries, while 

9 ensuring the privacy of such beneficiaries. 

10 ‘‘(B) The Secretary may coordinate with community11 based entities (including State Health Insurance Pro12 grams, Area Agencies on Aging, Aging and Disability Re13 source Centers, and the Administration on Aging) to— 

14 ‘‘(i) ensure that health risk assessments are ac15 cessible to beneficiaries; and 

16 ‘‘(ii) provide appropriate support for the com17 pletion of health risk assessments by beneficiaries. 

18 ‘‘(C) The Secretary shall establish procedures to 

19 make beneficiaries and providers aware of the requirement 

20 that a beneficiary complete a health risk assessment prior 

21 to or at the same time as receiving personalized prevention 

22 plan services. 

23 ‘‘(D) Not later than 1 year after the date of enact24 ment of the America’s Healthy Future Act of 2009, the 

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1 phonic or web-based programs used to furnish health risk 

2 assessments under subparagraph (A)(ii)(I). 

3 ‘‘(E) To the extent practicable, the Secretary shall 

4 encourage the use of, integration with, and coordination 

5 of health information technology (including use of tech6 nology that is compatible with electronic medical records 

7 and personal health records) and may experiment with the 

8 use of personalized technology to aid in the management 

9 of and adherence to provider recommendations in order 

10 to improve the health status of beneficiaries. 

11 ‘‘(F) A beneficiary shall be eligible to receive person12 alized prevention plan services under this subsection pro13 vided that the beneficiary has not received such services 

14 within the preceding 12-month period. During the period 

15 of 12 months after the date that the beneficiary’s first 

16 coverage begins under part B, payment shall be made 

17 under such part for only one of the following services: 

18 ‘‘(i) An initial preventive physical examination 

19 (as defined under subsection (ww)(1)). 

20 ‘‘(ii) Personalized prevention plan services pro21 vided under this subsection. 

22 ‘‘(G)(i) Not later than 1 year after the date of enact23 ment of the America’s Healthy Future Act of 2009, the 

24 Secretary shall develop and make available to the public 

25 a health risk assessment model. Such model shall meet 


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1 the guidelines under subparagraph (A) and may be used 

2 to meet the requirement under paragraph (1)(A). 

3 ‘‘(ii) Any health risk assessment that meets the 

4 guidelines under subparagraph (A) and is approved by the 

5 Secretary may be used to meet the requirement under 

6 paragraph (1)(A). 

7 ‘‘(H)(i) Subject to clause (ii), the Secretary shall 

8 issue guidance that— 

9 ‘‘(I) identifies elements under paragraphs (2) 

10 and (3) that are not required to be provided to a 

11 beneficiary during each annual visit; and 

12 ‘‘(II) establishes a yearly schedule for appro13 priate provision of such elements. 

14 ‘‘(ii) Personalized prevention plan services that are 

15 provided to a beneficiary within the period of 12 months 

16 after the date that such beneficiary’s first coverage period 

17 begins under part B shall be required to include any ele18 ments included under paragraphs (2) and (3).’’. 

19 (c) PAYMENT AND ELIMINATION OF COST-SHAR20 ING.— 

21 (1) PAYMENT AND ELIMINATION OF COINSUR22 ANCE.—Section 1833(a)(1) of the Social Security 

23 Act (42 U.S.C. 1395l(a)(1)) is amended— 

24 (A) in subparagraph (N), by inserting 

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1 ices (as defined in section 1861(hhh)(1))’’ after 

2 ‘‘(as defined in section 1848(j)(3))’’; 

3 (B) by striking ‘‘and’’ before ‘‘(W)’’; and 

4 (C) by inserting before the semicolon at 

5 the end the following: ‘‘, and (X) with respect 

6 to personalized prevention plan services (as de7 fined in section 1861(hhh)(1)), the amount paid 

8 shall be 100 percent of the lesser of the actual 

9 charge for the services or the amount deter10 mined under the payment basis determined 

11 under section 1848’’. 

12 (2) PAYMENT UNDER PHYSICIAN FEE SCHED13 ULE.—Section 1848(j)(3) of the Social Security Act 

14 (42 U.S.C. 1395w–4(j)(3)) is amended by inserting 

15 ‘‘(2)(FF) (including administration of the health 

16 risk assessment) ,’’ after ‘‘(2)(EE),’’. 

17 (3) ELIMINATION OF COINSURANCE IN OUT18 PATIENT HOSPITAL SETTINGS.— 

19 (A) EXCLUSION FROM OPD FEE SCHED20 ULE.—Section 1833(t)(1)(B)(iv) of the Social 

21 Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)) is 

22 amended by striking ‘‘and diagnostic mammog23 raphy’’ and inserting ‘‘, diagnostic mammog24 raphy, or personalized prevention plan services 

25 (as defined in section 1861(hhh)(1))’’. 


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1 (B) CONFORMING AMENDMENTS.—Section 

2 1833(a)(2) of the Social Security Act (42 

3 U.S.C. 1395l(a)(2)) is amended— 

4 (i) in subparagraph (F), by striking 

5 ‘‘and’’ at the end; 

6 (ii) in subparagraph (G)(ii), by strik7 ing the comma at the end and inserting ‘‘; 

8 and’’; and 

9 (iii) by inserting after subparagraph 

10 (G)(ii) the following new subparagraph: 

11 ‘‘(H) with respect to personalized preven12 tion plan services (as defined in section 

13 1861(hhh)(1)) furnished by an outpatient de14 partment of a hospital, the amount determined 

15 under paragraph (1)(X),’’. 

16 (4) WAIVER OF APPLICATION OF DEDUCT17 IBLE.—The first sentence of section 1833(b) of the 

18 Social Security Act (42 U.S.C. 1395l(b)) is amend19 ed— 

20 (A) by striking ‘‘and’’ before ‘‘(9)’’; and 

21 (B) by inserting before the period the fol22 lowing: ‘‘, and (10) such deductible shall not 

23 apply with respect to personalized prevention 

24 plan services (as defined in section 

25 1861(hhh)(1))’’. 


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1 (d) FREQUENCY LIMITATION.—Section 1862(a) of 

2 the Social Security Act (42 U.S.C. 1395y(a)) is amend3 ed— 

4 (1) in paragraph (1)— 

5 (A) in subparagraph (N), by striking 

6 ‘‘and’’ at the end; 

7 (B) in subparagraph (O), by striking the 

8 semicolon at the end and inserting ‘‘, and’’; and 

9 (C) by adding at the end the following new 

10 subparagraph: 

11 ‘‘(P) in the case of personalized prevention plan 

12 services (as defined in section 1861(hhh)(1)), which 

13 are performed more frequently than is covered under 

14 such section;’’; and 

15 (2) in paragraph (7), by striking ‘‘or (K)’’ and 

16 inserting ‘‘(K), or (P)’’. 

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

18 this section shall apply to services furnished on or after 

19 January 1, 2011. 

20 SEC. 2002. REMOVAL OF BARRIERS TO PREVENTIVE SERV21 ICES. 

22 (a) DEFINITION OF PREVENTIVE SERVICES.—Sec23 tion 1861(ddd) of the Social Security Act (42 U.S.C. 

24 1395x(ddd)) is amended— 


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1 (1) in the heading, by inserting ‘‘; Preventive 

2 Services’’ after ‘‘Services’’; 

3 (2) in paragraph (1), by striking ‘‘not otherwise 

4 described in this title’’ and inserting ‘‘not described 

5 in subparagraph (A) or (C) of paragraph (3)’’; and 

6 (3) by adding at the end the following new 

7 paragraph: 

8 ‘‘(3) The term ‘preventive services’ means the fol9 lowing: 

10 ‘‘(A) The screening and preventive services de11 scribed in subsection (ww)(2) (other than the service 

12 described in subparagraph (M) of such subsection). 

13 ‘‘(B) An initial preventive physical examination 

14 (as defined in subsection (ww)). 

15 ‘‘(C) Personalized prevention plan services (as 

16 defined in subsection (hhh)(1)).’’. 

17 (b) COINSURANCE.— 

18 (1) GENERAL APPLICATION.— 

19 (A) IN GENERAL.—Section 1833(a)(1) of 

20 the Social Security Act (42 U.S.C. 

21 1395l(a)(1)), as amended by section 2001(c)(1), 

22 is amended— 

23 (i) in subparagraph (T), by inserting 

24 ‘‘(or 100 percent if such services are rec25 ommended with a grade of A or B by the 


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1 United States Preventive Services Task 

2 Force for any indication or population and 

3 are appropriate for the individual)’’ after 

4 ‘‘80 percent’’; 

5 (ii) in subparagraph (W)— 

6 (I) in clause (i), by inserting ‘‘(if 

7 such subparagraph were applied, by 

8 substituting ‘100 percent’ for ‘80 per9 cent’)’’ after ‘‘subparagraph (D)’’; 

10 and 

11 (II) in clause (ii), by striking ‘‘80 

12 percent’’ and inserting ‘‘100 percent’’; 

13 (iii) by striking ‘‘and’’ before ‘‘(X)’’; 

14 and 

15 (iv) by inserting before the semicolon 

16 at the end the following: ‘‘, and (Y) with 

17 respect to preventive services described in 

18 subparagraphs (A) and (B) of section 

19 1861(ddd)(3) that are appropriate for the 

20 individual and, in the case of such services 

21 described in subparagraph (A), are rec22 ommended with a grade of A or B by the 

23 United States Preventive Services Task 

24 Force for any indication or population, the 

25 amount paid shall be 100 percent of the 


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1 lesser of the actual charge for the services 

2 or the amount determined under the fee 

3 schedule that applies to such services 

4 under this part’’. 

5 (2) ELIMINATION OF COINSURANCE IN OUT6 PATIENT HOSPITAL SETTINGS.— 

7 (A) EXCLUSION FROM OPD FEE SCHED8 ULE.—Section 1833(t)(1)(B)(iv) of the Social 

9 Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)), as 

10 amended by section 2001(c)(3)(A), is amend11 ed— 

12 (i) by striking ‘‘or’’ before ‘‘personal13 ized prevention plan services’’; and 

14 (ii) by inserting before the period the 

15 following: ‘‘, or preventive services de16 scribed in subparagraphs (A) and (B) of 

17 section 1861(ddd)(3) that are appropriate 

18 for the individual and, in the case of such 

19 services described in subparagraph (A), are 

20 recommended with a grade of A or B by 

21 the United States Preventive Services Task 

22 Force for any indication or population’’. 

23 (B) CONFORMING AMENDMENTS.—Section 

24 1833(a)(2) of the Social Security Act (42 


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1 U.S.C. 1395l(a)(2)), as amended by section 

2 2001(c)(3)(B), is amended— 

3 (i) in subparagraph (G)(ii), by strik4 ing ‘‘and’’ after the semicolon at the end; 

5 (ii) in subparagraph (H), by striking 

6 the comma at the end and inserting ‘‘; 

7 and’’; and 

8 (iii) by inserting after subparagraph 

9 (H) the following new subparagraph: 

10 ‘‘(I) with respect to preventive services de11 scribed in subparagraphs (A) and (B) of section 

12 1861(ddd)(3) that are appropriate for the indi13 vidual and are furnished by an outpatient de14 partment of a hospital and, in the case of such 

15 services described in subparagraph (A), are rec16 ommended with a grade of A or B by the 

17 United States Preventive Services Task Force 

18 for any indication or population, the amount 

19 determined under paragraph (1)(W) or 

20 (1)(Y),’’. 

21 (c) WAIVER OF APPLICATION OF DEDUCTIBLE FOR

22 PREVENTIVE SERVICES AND COLORECTAL CANCER

23 SCREENING TESTS.—Section 1833(b) of the Social Secu24 rity Act (42 U.S.C. 1395l(b)), as amended by section 

25 2001(c)(4) is amended— 


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1 (1) in paragraph (1), by striking ‘‘items and 

2 services described in section 1861(s)(10)(A)’’ and in3 serting ‘‘preventive services described in subpara4 graph (A) of section 1861(ddd)(3) that are rec5 ommended with a grade of A or B by the United 

6 States Preventive Services Task Force for any indi7 cation or population and are appropriate for the in8 dividual.’’; and 

9 (2) by adding at the end the following new sen10 tence: ‘‘Paragraph (1) of the first sentence of this 

11 subsection shall apply with respect to a colorectal 

12 cancer screening test regardless of the code that is 

13 billed for the establishment of a diagnosis as a result 

14 of the test, or for the removal of tissue or other mat15 ter or other procedure that is furnished in connec16 tion with, as a result of, and in the same clinical en17 counter as the screening test.’’. 

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

19 this section shall apply to items and services furnished on 

20 or after January 1, 2011. 

21 SEC. 2003. EVIDENCE-BASED COVERAGE OF PREVENTIVE 

22 SERVICES. 

23 (a) AUTHORITY TO MODIFY OR ELIMINATE COV24 ERAGE OF CERTAIN PREVENTIVE SERVICES.— 


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1 (1) IN GENERAL.—Section 1834 of the Social 

2 Security Act (42 U.S.C. 1395m) is amended by add3 ing at the end the following new subsection: 

4 ‘‘(n) AUTHORITY TO MODIFY OR ELIMINATE COV5 ERAGE OF CERTAIN PREVENTIVE SERVICES.—Notwith6 standing any other provision of this title, effective begin7 ning on January 1, 2010, if the Secretary determines ap8 propriate, the Secretary may— 

9 ‘‘(1) modify— 

10 ‘‘(A) the coverage of any preventive service 

11 described in subparagraph (A) of section 

12 1861(ddd)(3) to the extent that such modifica13 tion is consistent with the recommendations of 

14 the United States Preventive Services Task 

15 Force; and 

16 ‘‘(B) the services included in the initial 

17 preventive physical examination described in 

18 subparagraph (B) of such section; and 

19 ‘‘(2) provide that no payment shall be made 

20 under this title for a preventive service described in 

21 subparagraph (A) of such section that is not rec22 ommended with a grade of A, B, C, or I by such 

23 Task Force.’’. 

24 (2) CONSTRUCTION.—Nothing in the amend25 ment made by paragraph (1) shall be construed to 


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1 affect the coverage of diagnostic or treatment serv2 ices under title XVIII of the Social Security Act. 

3 (b) SUPPORT FOR OUTREACH AND EDUCATION RE4 GARDING PREVENTIVE SERVICES.— 

5 (1) FUNDING.— 

6 (A) IN GENERAL.—Out of any funds in the 

7 Treasury not otherwise appropriated, there are 

8 appropriated for fiscal year 2010, $15,000,000 

9 to the Centers for Medicare & Medicaid Serv10 ices Program Management Account for the pur11 poses described in subparagraph (B). Amounts 

12 appropriated under this subparagraph shall— 

13 (i) be disbursed to such Account on 

14 January 1, 2010; and 

15 (ii) remain available until expended. 

16 (B) PURPOSES DESCRIBED.—The purposes 

17 described in this subparagraph are as follows: 

18 (i) To conduct education and outreach 

19 activities to Medicare beneficiaries and 

20 health care providers regarding the cov21 erage of preventive services (as defined in 

22 section 1861(ddd)(3) of the Social Security 

23 Act, as added by section 2002(a)) under 

24 the Medicare program under title XVIII of 


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1 such Act in order to encourage optimal uti2 lization of such services. 

3 (ii) To coordinate such education and 

4 outreach activities with community-based 

5 entities, including State Health Insurance 

6 Programs, Area Agencies on Aging, and 

7 Aging and Disability Resource Centers, 

8 that are carrying out the activities de9 scribed in section 1861(hhh)(5)(B) of the 

10 Social Security Act, as added by section 

11 2001(b). 

12 (C) ACTIVITY SUPPORT.—Out of the 

13 amounts appropriated under subparagraph (A), 

14 the Secretary may provide support and assist15 ance for activities conducted by community16 based entities as described under subparagraph 

17 (B)(ii). 

18 (2) HHS STUDY AND REPORT TO CONGRESS.— 

19 (A) STUDY.—The Secretary of Health and 

20 Human Services shall conduct a study on pre21 ventive services under the Medicare program. 

22 Such study shall include an analysis of— 

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1 viders Act of 2008 (Public Law 110–275; 

2 122 Stat. 2496), including a description of 

3 plans to add coverage of additional preven4 tive services pursuant to such amend5 ments; and 

6 (ii) the implementation of the edu7 cation and outreach activities under para8 graph (1)(B). 

9 (B) REPORT.—Not later than 1 year after 

10 the date of the enactment of this Act, the Sec11 retary of Health and Human Services shall sub12 mit to Congress a report on the study con13 ducted under subparagraph (A), together with 

14 recommendations for such legislation and ad15 ministrative action as the Secretary determines 

16 appropriate. 

17 (C) FUNDING.—Out of the amounts appro18 priated under paragraph (1)(A), an amount not 

19 greater than $1,000,000 shall be made available 

20 to carry out this paragraph. 

21 (3) GAO STUDY AND REPORT TO CONGRESS.— 

22 (A) STUDY.—The Comptroller General of 

23 the United States shall conduct a study on ex24 isting efforts by the Secretary of Health and 

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1 ventive services under the Medicare program, 

2 including primary, secondary, and tertiary serv3 ices and the use of health information tech4 nology to coordinate such services. Such study 

5 shall include an analysis of— 

6 (i) the utilization of and payment for 

7 preventive services under the Medicare pro8 gram; and 

9 (ii) whether barriers to optimal utili10 zation of and access to such services exist 

11 and if so, what are those barriers. 

12 (B) REPORT.—Not later than 2 years after 

13 the date of the enactment of this Act, the 

14 Comptroller General of the United States shall 

15 submit to Congress a report on the study con16 ducted under subparagraph (A), together with 

17 recommendations for— 

18 (i) improving access to, and utilization 

19 and coordination of, primary, secondary, 

20 and tertiary preventive services under the 

21 Medicare program, with an emphasis on 

22 the most costly chronic conditions affecting 

23 Medicare population; and 


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1 (ii) such legislation and administrative 

2 action as the Comptroller General deter3 mines appropriate. 

4 (C) FUNDING.—Out of any funds in the 

5 Treasury not otherwise appropriated, there are 

6 appropriated $2,000,000 to carry out this para7 graph. Amounts appropriated under this sub8 paragraph shall remain available until ex9 pended. 

10 SEC. 2004. GAO STUDY AND REPORT ON MEDICARE BENE11 FICIARY ACCESS TO VACCINES. 

12 (a) STUDY.—The Comptroller General of the United 

13 States (in this section referred to as the ‘‘Comptroller 

14 General’’) shall conduct a study on the ability of Medicare 

15 beneficiaries who were 65 years of age or older to access 

16 routinely recommended vaccines covered under the pre17 scription drug program under part D of title XVIII of the 

18 Social Security Act over the period since the establishment 

19 of such program. Such study shall include the following: 

20 (1) An analysis and determination of— 

21 (A) the number of Medicare beneficiaries 

22 who were 65 years of age or older and were eli23 gible for a routinely recommended vaccination 

24 that was covered under part D; 


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1 (B) the number of such beneficiaries who 

2 actually received a routinely recommended vac3 cination that was covered under part D; and 

4 (C) any barriers to access by such bene5 ficiaries to routinely recommended vaccinations 

6 that were covered under part D. 

7 (2) A summary of the findings and rec8 ommendations by government agencies, departments, 

9 and advisory bodies (as well as relevant professional 

10 organizations) on the impact of coverage under part 

11 D of routinely recommended adult immunizations 

12 for access to such immunizations by Medicare bene13 ficiaries. 

14 (b) REPORT.—Not later than June 1, 2010, the 

15 Comptroller General shall submit to the appropriate com16 mittees of jurisdiction of the House of Representatives and 

17 the Senate a report containing the results of the study 

18 conducted under subsection (a), together with rec19 ommendations for such legislation and administrative ac20 tion as the Comptroller General determines appropriate. 

21 (c) FUNDING.—Out of any funds in the Treasury not 

22 otherwise appropriated, there are appropriated 

23 $1,000,000 for fiscal year 2010 to carry out this section. 

24 SEC. 2005. INCENTIVES FOR HEALTHY LIFESTYLES. 

25 (a) MEDICARE DEMONSTRATION PROJECT.— 


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1 (1) ESTABLISHMENT.— 

2 (A) IN GENERAL.—The Secretary shall es3 tablish and implement a demonstration project 

4 under title XVIII of the Social Security Act to 

5 test programs that provide incentives to Medi6 care beneficiaries to reduce their risk of avoid7 able health outcomes that are associated with 

8 lifestyle choices, including smoking, exercise, 

9 and diet. 

10 (B) EVIDENCE REVIEW.—Prior to the es11 tablishment of the demonstration project, the 

12 Secretary shall review the available evidence, lit13 erature, best practices, and resources relevant 

14 to the Medicare population that are related 

15 to— 

16 (i) programs that promote a healthy 

17 lifestyle and reduce health risk factors; and 

18 (ii) providing individuals with incen19 tives for participating in such programs. 

20 (2) DURATION AND SCOPE.— 

21 (A) DURATION.—The Secretary shall con22 duct the demonstration project for an initial pe23 riod of 3 years, beginning not later than July 

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1 nent that is determined to be effective under 

2 the interim evaluation and report described 

3 under subsection (b). 

4 (B) SCOPE.— 

5 (i) IN GENERAL.—The Secretary shall 

6 select not more than 10 sites to conduct 

7 the programs described in paragraph (3), 

8 and may select such sites in coordination 

9 with other community-based programs that 

10 are oriented towards promoting healthy 

11 lifestyles, reducing risk factors, and reduc12 ing the impact of chronic diseases (includ13 ing programs conducted by the Adminis14 tration on Aging, the Centers for Disease 

15 Control and Prevention, and the Agency 

16 for Healthcare Research and Quality). 

17 (ii) SELECTION.—In selecting sites to 

18 participate in the demonstration project, 

19 the Secretary shall select— 

20 (I) not less than 2 sites that are 

21 located in rural areas; and 

22 (II) not less than 2 sites that 

23 serve a minority community (including 

24 Native American communities). 


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1 (iii) PREFERENCE.—In selecting sites 

2 to participate in the demonstration project, 

3 the Secretary may give preference to orga4 nizations that have demonstrated experi5 ence in designing and implementing pro6 grams that provide incentives to adults to 

7 make healthy lifestyle choices. 

8 (3) PROGRAM DESCRIBED.—The Secretary shall 

9 select programs that are evidence-based and de10 signed to help Medicare beneficiaries make healthy 

11 lifestyle choices to reduce their health risks, includ12 ing— 

13 (A) ceasing use of tobacco products; 

14 (B) controlling or reducing their weight; 

15 (C) controlling or lowering their choles16 terol; 

17 (D) lowering their blood pressure; 

18 (E) learning strategies to avoid the onset 

19 of diabetes or, in the case of a diabetic, improv20 ing the management of such condition; 

21 (F) reducing the risks of falls; and 

22 (G) other approaches as determined by the 

23 Secretary. 


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1 (4) MONITORING PARTICIPATION AND MEAS2 URING OUTCOMES.—Each participating site shall es3 tablish a system to— 

4 (A) monitor participation by Medicare 

5 beneficiaries in programs described in para6 graph (3); and 

7 (B) validate changes in health risks and 

8 outcomes, including adoption and maintenance 

9 of healthy behaviors by Medicare beneficiaries 

10 participating in such programs; and 

11 (C) establish standards and health status 

12 targets for Medicare beneficiaries participating 

13 in such programs and measure the degree to 

14 which such standards and targets are met. 

15 (b) EVALUATIONS AND REPORTS.— 

16 (1) IN GENERAL.— 

17 (A) INDEPENDENT EVALUATIONS.—The 

18 Secretary shall provide for an interim and final 

19 independent evaluation of the demonstration 

20 project that shall assess— 

21 (i) the extent to which participating 

22 Medicare beneficiaries achieved the pro23 gram goals described in subsection (a)(3); 

24 and 


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1 (ii) any impact on utilization of health 

2 services and costs to the Medicare program 

3 as compared to the cost of the programs 

4 conducted under the demonstration 

5 project. 

6 (B) INTERIM DETERMINATION.—Not later 

7 than July 1, 2013, the Secretary shall make a 

8 determination, pursuant to subsection 

9 (a)(2)(A), as to any programs or program com10 ponents that should be extended through July 

11 1, 2015. 

12 (2) INTERIM REPORT.—Not later than January 

13 1, 2014, the Secretary shall submit to Congress an 

14 interim report on the demonstration project. The in15 terim report shall include— 

16 (A) a preliminary evaluation of the effec17 tiveness of the programs or program compo18 nents conducted through the demonstration 

19 project; and 

20 (B) a description of any programs or pro21 gram components that have been extended 

22 under paragraph (1)(B). 

23 (3) FINAL REPORT.—Not later than January 1, 

24 2016, the Secretary shall submit to Congress a final 

25 report on the demonstration project that includes 


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1 the results of the independent evaluation required 

2 under paragraph (1), together with recommenda3 tions for such legislation and administrative action 

4 as the Secretary determines appropriate, including a 

5 recommendation as to any programs conducted 

6 under the demonstration project that should be ex7 tended or expanded. 

8 (c) NO EFFECT ON ELIGIBILITY FOR, OR AMOUNT

9 OF, OTHER BENEFITS.—Any incentives provided to a 

10 Medicare beneficiary participating in the demonstration 

11 project shall not be taken into account for purposes of de12 termining the beneficiary’s eligibility for, or amount of, 

13 benefits under the Medicare program or any other pro14 gram funded in whole or in part with Federal funds. 

15 (d) FUNDING.— 

16 (1) IN GENERAL.—Out of any funds in the 

17 Treasury not otherwise appropriated, there are ap18 propriated $15,000,000 for each of fiscal years 2010 

19 through 2015 to the Centers for Medicare & Med20 icaid Services Program Management Account to 

21 carry out the demonstration project. Amounts appro22 priated under this paragraph shall remain available 

23 until expended. 

24 (2) USE OF CERTAIN FUNDS.—Out of the 

25 amounts appropriated under paragraph (1), an 


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1 amount not greater than $5,000,000 shall be made 

2 available to design, implement, and evaluate pro3 grams conducted under the demonstration project, 

4 with such amount to remain available until ex5 pended. 

6 (e) ADMINISTRATION.—Chapter 35 of title 44, 

7 United States Code shall not apply to the selection, test8 ing, and evaluation of programs, or the expansion of such 

9 programs, under this section. 

10 (f) DEFINITIONS.—In this section: 

11 (1) DEMONSTRATION PROJECT.—The term 

12 ‘‘demonstration project’’ means the demonstration 

13 project conducted under this section. 

14 (2) MEDICARE BENEFICIARY.—The term 

15 ‘‘Medicare beneficiary’’ means an individual who is 

16 entitled to benefits under part A of title XVIII of 

17 the Social Security Act and enrolled under part B 

18 of such title. 

19 (3) SECRETARY.—The term ‘‘Secretary’’ means 

20 the Secretary of Health and Human Services. 


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1 Subtitle B—Medicaid 

2 SEC. 2101. IMPROVING ACCESS TO PREVENTIVE SERVICES 

3 FOR ELIGIBLE ADULTS. 

4 (a) CLARIFICATION OF INCLUSION OF SERVICES.— 

5 Section 1905(a)(13) of the Social Security Act (42 U.S.C. 

6 1396d(a)(13)) is amended to read as follows: 

7 ‘‘(13) other diagnostic, screening, preventive, 

8 and rehabilitative services, including— 

9 ‘‘(A) any clinical preventive services that 

10 are assigned a grade of A or B by the United 

11 States Preventive Services Task Force; 

12 ‘‘(B) with respect to an adult individual, 

13 approved vaccines recommended by the Advi14 sory Committee on Immunization Practices (an 

15 advisory committee established by the Sec16 retary, acting through the Director of the Cen17 ters for Disease Control and Prevention) and 

18 their administration; and 

19 ‘‘(C) any medical or remedial services (pro20 vided in a facility, a home, or other setting) rec21 ommended by a physician or other licensed 

22 practitioner of the healing arts within the scope 

23 of their practice under State law, for the max24 imum reduction of physical or mental disability 


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1 and restoration of an individual to the best pos2 sible functional level;’’. 

3 (b) INCREASED FMAP.—Section 1905(b) of the So4 cial Security Act (42 U.S.C. 1396d(b)), as amended by 

5 sections 1601(a)(3)(A) and 1604(c)(1), is amended in the 

6 first sentence— 

7 (1) by striking ‘‘, and (4)’’ and inserting ‘‘, 

8 (4)’’; and 

9 (2) by inserting before the period the following: 

10 ‘‘, and (5) in the case of a State that provides med11 ical assistance for services and vaccines described in 

12 subparagraphs (A) and (B) of subsection (a)(13), 

13 and prohibits cost-sharing for such services and vac14 cines, the Federal medical assistance percentage, as 

15 determined under this subsection and subsection (y) 

16 (without regard to paragraph (1)(C) of such sub17 section), shall be increased by 1 percentage point 

18 with respect to medical assistance for such services 

19 and vaccines and for items and services described in 

20 subsection (a)(4)(D)’’. 

21 (c) EFFECTIVE DATE.—The amendments made 

22 under this section shall take effect on January 1, 2013. 


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1 SEC. 2102. COVERAGE OF COMPREHENSIVE TOBACCO CES2 SATION SERVICES FOR PREGNANT WOMEN. 

3 (a) REQUIRING COVERAGE OF COUNSELING AND

4 PHARMACOTHERAPY FOR CESSATION OF TOBACCO USE

5 BY PREGNANT WOMEN.—Section 1905 of the Social Secu6 rity Act (42 U.S.C. 1396d), as amended by sections 

7 1601(a)(3)(B), 1636, and 1642, is further amended— 

8 (1) in subsection (a)(4)— 

9 (A) by striking ‘‘and’’ before ‘‘(C)’’; and 

10 (B) by inserting before the semicolon at 

11 the end the following new subparagraph: ‘‘; and 

12 (D) counseling and pharmacotherapy for ces13 sation of tobacco use by pregnant women (as 

14 defined in subsection (bb))’’; and 

15 (2) by adding at the end the following: 

16 ‘‘(bb)(1) For purposes of this title, the term ‘coun17 seling and pharmacotherapy for cessation of tobacco use 

18 by pregnant women’ means diagnostic, therapy, and coun19 seling services and pharmacotherapy (including the cov20 erage of prescription and nonprescription tobacco ces21 sation agents approved by the Food and Drug Administra22 tion) for cessation of tobacco use by pregnant women who 

23 use tobacco products or who are being treated for tobacco 

24 use that is furnished— 

25 ‘‘(A) by or under the supervision of a physician; 

26 or 


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1 ‘‘(B) by any other health care professional 

2 who— 

3 ‘‘(i) is legally authorized to furnish such 

4 services under State law (or the State regu5 latory mechanism provided by State law) of the 

6 State in which the services are furnished; and 

7 ‘‘(ii) is authorized to receive payment for 

8 other services under this title or is designated 

9 by the Secretary for this purpose. 

10 ‘‘(2) Subject to paragraph (3), such term is limited 

11 to— 

12 ‘‘(A) services recommended with respect to 

13 pregnant women in ‘Treating Tobacco Use and De14 pendence: 2008 Update: A Clinical Practice Guide15 line’, published by the Public Health Service in May 

16 2008, or any subsequent modification of such Guide17 line; and 

18 ‘‘(B) such other services that the Secretary rec19 ognizes to be effective for cessation of tobacco use 

20 by pregnant women. 

21 ‘‘(3) Such term shall not include coverage for drugs 

22 or biologicals that are not otherwise covered under this 

23 title.’’. 

24 (b) EXCEPTION FROM OPTIONAL RESTRICTION

25 UNDER MEDICAID PRESCRIPTION DRUG COVERAGE.— 


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1 Section 1927(d)(2)(F) of the Social Security Act (42 

2 U.S.C. 1396r–8(d)(2)(F)), as redesignated by section 

3 1652(a), is amended by inserting before the period at the 

4 end the following: ‘‘, except, in the case of pregnant 

5 women when recommended in accordance with the Guide6 line referred to in section 1905(bb)(2)(A), agents ap7 proved by the Food and Drug Administration under the 

8 over-the-counter monograph process for purposes of pro9 moting, and when used to promote, tobacco cessation’’. 

10 (c) REMOVAL OF COST-SHARING FOR COUNSELING

11 AND PHARMACOTHERAPY FOR CESSATION OF TOBACCO

12 USE BY PREGNANT WOMEN.— 

13 (1) GENERAL COST-SHARING LIMITATIONS.— 

14 Section 1916 of the Social Security Act (42 U.S.C. 

15 1396o) is amended in each of subsections (a)(2)(B) 

16 and (b)(2)(B) by inserting ‘‘, and counseling and 

17 pharmacotherapy for cessation of tobacco use by 

18 pregnant women (as defined in section 1905(bb)) 

19 and covered outpatient drugs (as defined in sub20 section (k)(2) of section 1927 and including non21 prescription drugs described in subsection (d)(2) of 

22 such section) that are prescribed for purposes of 

23 promoting, and when used to promote, tobacco ces24 sation by pregnant women in accordance with the 


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1 Guideline referred to in section 1905(bb)(2)(A)’’ 

2 after ‘‘complicate the pregnancy’’. 

3 (2) APPLICATION TO ALTERNATIVE COST-SHAR4 ING.—Section 1916A(b)(3)(B)(iii) of such Act (42 

5 U.S.C. 1396o–1(b)(3)(B)(iii)) is amended by insert6 ing ‘‘, and counseling and pharmacotherapy for ces7 sation of tobacco use by pregnant women (as defined 

8 in section 1905(bb))’’ after ‘‘complicate the preg9 nancy’’. 

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

11 this section shall take effect on October 1, 2010. 

12 SEC. 2103. INCENTIVES FOR HEALTHY LIFESTYLES. 

13 (a) INITIATIVES.— 

14 (1) ESTABLISHMENT.— 

15 (A) IN GENERAL.—The Secretary shall 

16 award grants to States to carry out initiatives 

17 to provide incentives to Medicaid beneficiaries 

18 who— 

19 (i) successfully participate in a pro20 gram described in paragraph (3); and 

21 (ii) upon completion of such participa22 tion, demonstrate changes in health risk 

23 and outcomes, including the adoption and 

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1 ing specific targets (as described in sub2 section (c)(2)). 

3 (B) PURPOSE.—The purpose of the initia4 tives under this section is to test approaches 

5 that may encourage behavior modification and 

6 determine scalable solutions. 

7 (2) DURATION.— 

8 (A) INITIATION OF PROGRAM; RE9 SOURCES.—The Secretary shall awards grants 

10 to States beginning on January 1, 2011, or be11 ginning on the date on which the Secretary de12 velops program criteria, whichever is earlier. 

13 The Secretary shall develop program criteria for 

14 initiatives under this section using relevant evi15 dence-based research and resources, including 

16 the Guide to Community Preventive Services, 

17 the Guide to Clinical Preventive Services, and 

18 the National Registry of Evidence-Based Pro19 grams and Practices. 

20 (B) DURATION OF PROGRAM.—A State 

21 awarded a grant to carry out initiatives under 

22 this section shall carry out such initiatives with23 in the 5-year period beginning on January 1, 

24 2011, or beginning on the date on which the 

25 Secretary develops program criteria, whichever 


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1 is earlier. Initiatives under this section shall be 

2 carried out by a State for a period of not less 

3 than 3 years. 

4 (3) PROGRAM DESCRIBED.— 

5 (A) IN GENERAL.—A program described in 

6 this paragraph is a comprehensive, evidence7 based, widely available, and easily accessible 

8 program, proposed by the State and approved 

9 by the Secretary, that is designed and uniquely 

10 suited to address the needs of Medicaid bene11 ficiaries and has demonstrated success in help12 ing individuals achieve one or more of the fol13 lowing: 

14 (i) Ceasing use of tobacco products. 

15 (ii) Controlling or reducing their 

16 weight. 

17 (iii) Lowering their cholesterol. 

18 (iv) Lowering their blood pressure. 

19 (v) Avoiding the onset of diabetes or, 

20 in the case of a diabetic, improving the 

21 management of that condition. 

22 (B) CO-MORBIDITIES.—A program under 

23 this section may also address co-morbidities (in24 cluding depression) that are related to any of 

25 the conditions described in subparagraph (A). 


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1 (C) WAIVER AUTHORITY.—The Secretary 

2 may waive the requirements of sections 

3 1902(a)(1) (relating to statewideness) and 

4 1902(a)(10)(B) (relating to comparability) of 

5 the Social Security Act for a State awarded a 

6 grant to conduct an initiative under this section 

7 and shall ensure that a State makes any pro8 gram described in subparagraph (A) widely 

9 available and accessible to Medicaid bene10 ficiaries in the State. 

11 (D) FLEXIBILITY IN IMPLEMENTATION.— 

12 A State may enter into arrangements with pro13 viders participating in Medicaid, community14 based organizations, faith-based organizations, 

15 public-private partnerships, Indian tribes, or 

16 similar entities or organizations to carry out 

17 programs described in subparagraph (A). 

18 (4) APPLICATION.—Following the development 

19 of program criteria by the Secretary, a State may 

20 submit an application, in such manner and con21 taining such information as the Secretary may re22 quire, that shall include a proposal for programs de23 scribed in paragraph (3)(A) and a plan to make 

24 Medicaid beneficiaries and providers participating in 


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1 Medicaid who reside in the State aware and in2 formed about such programs. 

3 (b) EDUCATION AND OUTREACH CAMPAIGN.— 

4 (1) STATE AWARENESS.—The Secretary shall 

5 conduct an outreach and education campaign to 

6 make States aware of the grants under this section. 

7 (2) PROVIDER AND BENEFICIARY EDU8 CATION.—A State awarded a grant to conduct an 

9 initiative under this section shall conduct an out10 reach and education campaign to make Medicaid 

11 beneficiaries and providers participating in Medicaid 

12 who reside in the State aware of the programs de13 scribed in subsection (a)(3) that are to be carried 

14 out by the State under the grant. 

15 (c) MONITORING.—A State awarded a grant to con16 duct an initiative under this section shall develop and im17 plement a system to— 

18 (1) monitor Medicaid beneficiary participation 

19 in the program and validate changes in health risk 

20 and outcomes with clinical data, including the adop21 tion and maintenance of health behaviors by such 

22 beneficiaries; 

23 (2) to the extent practicable, establish stand24 ards and health status targets for Medicaid bene25 ficiaries participating in the program and measure 


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1 the degree to which such standards and targets are 

2 met; 

3 (3) evaluate the effectiveness of the program 

4 and provide the Secretary with such evaluations; 

5 (4) report to the Secretary on processes that 

6 have been developed and lessons learned from the 

7 program; and 

8 (5) report on preventive services as part of re9 porting on quality measures for Medicaid managed 

10 care programs. 

11 (d) INDEPENDENT ASSESSMENTS.— 

12 (1) IN GENERAL.—The Secretary shall provide 

13 for an independent assessment of the initiatives car14 ried out under this section. 

15 (2) STATE REPORTING.—A State awarded a 

16 grant to carry out initiatives under this section shall 

17 submit reports to the Secretary, on a semi-annual 

18 basis, regarding the programs that are supported by 

19 the grant funds. Such report shall include informa20 tion, as specified by the Secretary, regarding— 

21 (A) the specific uses of the grant funds; 

22 (B) an assessment of program implementa23 tion and lessons learned from the programs; 

24 (C) an assessment of quality improvements 

25 and clinical outcomes under such programs; and 


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1 (D) estimates of cost savings resulting 

2 from such programs. 

3 (3) INITIAL REPORT.—Not later than January 

4 1, 2014, the Secretary shall submit to Congress an 

5 initial report on such initiatives based on informa6 tion provided by States through reports required 

7 under paragraph (2). The initial report shall include 

8 an interim evaluation of the effectiveness of the ini9 tiatives carried out with grants awarded under this 

10 section and a recommendation regarding whether 

11 funding for expanding or extending the initiatives 

12 should be extended beyond January 1, 2016. 

13 (4) FINAL REPORT.—Not later than July 1, 

14 2016, the Secretary shall submit to Congress a final 

15 report on the program that includes the results of 

16 the independent assessment required under para17 graph (1), together with recommendations for such 

18 legislation and administrative action as the Sec19 retary determines appropriate. 

20 (e) NO EFFECT ON ELIGIBILITY FOR, OR AMOUNT

21 OF, OTHER BENEFITS.—Any incentives provided to a 

22 Medicaid beneficiary participating in a program described 

23 in subsection (a)(3) shall not be taken into account for 

24 purposes of determining the beneficiary’s eligibility for, or 


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1 amount of, benefits under any program funded in whole 

2 or in part with Federal funds. 

3 (f) FUNDING.—Out of any funds in the Treasury not 

4 otherwise appropriated, there are appropriated for the 5- 

5 year period beginning on January 1, 2011, $100,000,000 

6 to the Secretary to carry out this section. Amounts appro7 priated under this subsection shall remain available until 

8 expended. 

9 (g) DEFINITIONS.—In this section: 

10 (1) MEDICAID BENEFICIARY.—The term ‘‘Med11 icaid beneficiary’’ means an individual who is eligible 

12 for medical assistance under a State plan or waiver 

13 under title XIX of the Social Security Act (42 

14 U.S.C. 1396 et seq.) and is enrolled in such plan or 

15 waiver. 

16 (2) SECRETARY.—The term ‘‘Secretary’’ means 

17 the Secretary of Health and Human Services. 

18 (3) STATE.—The term ‘‘State’’ has the mean19 ing given that term for purposes of title XIX of the 

20 Social Security Act (42 U.S.C. 1396 et seq.). 

21 SEC. 2104. STATE OPTION TO PROVIDE HEALTH HOMES 

22 FOR ENROLLEES WITH CHRONIC CONDI23 TIONS. 

24 (a) STATE PLAN AMENDMENT.—Title XIX of the So25 cial Security Act (42 U.S.C. 1396a et seq.), as amended 


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1 by sections 1621, 1640, and 1702(b), is amended by add2 ing at the end the following new section: 

3 ‘‘SEC. 1946. STATE OPTION TO PROVIDE COORDI4 NATED CARE THROUGH A HEALTH HOME FOR INDIVID5 UALS WITH CHRONIC CONDITIONS.— 

6 ‘‘(a) IN GENERAL.—Notwithstanding section 

7 1902(a)(1) (relating to statewideness), section 

8 1902(a)(10)(B) (relating to comparability), and any other 

9 provision of this title for which the Secretary determines 

10 it is necessary to waive in order to implement this section, 

11 beginning January 1, 2011, a State, at its option as a 

12 State plan amendment, may provide for medical assistance 

13 under this title to eligible individuals with chronic condi14 tions who select a designated provider as the individual’s 

15 health home for purposes of providing the individual with 

16 health home services. 

17 ‘‘(b) HEALTH HOME QUALIFICATION STANDARDS.— 

18 The Secretary shall establish standards for qualification 

19 as a designated provider (as described under subsection 

20 (h)(3)) for the purpose of being eligible to be a health 

21 home for purposes of this section. 

22 ‘‘(c) PAYMENTS.— 

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1 ments for the provision of health home services to 

2 each eligible individual with chronic conditions that 

3 selects the provider as the individual’s health home. 

4 Payments made to a designated provider or a team 

5 for such services shall be treated as medical assist6 ance for purposes of section 1903(a), except that, 

7 during the first 8 fiscal year quarters that the State 

8 plan amendment is in effect, the Federal medical as9 sistance percentage applicable to such payments 

10 shall be equal to 90 percent. 

11 ‘‘(2) METHODOLOGY.— 

12 ‘‘(A) IN GENERAL.—The State shall speci13 fy in the State plan amendment the method14 ology the State will use for determining pay15 ment for the provision of health home services. 

16 Such methodology for determining payment— 

17 ‘‘(i) may be tiered to reflect, with re18 spect to each eligible individual with chron19 ic conditions provided such services by a 

20 designated provider or a team of health 

21 care professionals operating with such a 

22 provider, the severity or number of each 

23 such individual’s chronic conditions or the 

24 specific capabilities of the provider or 

25 team; and 


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1 ‘‘(ii) shall be established consistent 

2 with section 1902(a)(30)(A). 

3 ‘‘(B) ALTERNATE MODELS OF PAYMENT.— 

4 The methodology for determining payment for 

5 provision of health home services under this 

6 section shall not be limited to a per-member 

7 per-month basis and may provide (as proposed 

8 by the State and subject to approval by the 

9 Secretary) for alternate models of payment. 

10 ‘‘(3) PLANNING GRANTS.—The Secretary may 

11 award planning grants to States for purposes of de12 veloping a State plan amendment under this section. 

13 A State awarded a planning grant shall contribute 

14 an amount equal to the State percentage determined 

15 under section 1905(b) (without regard to section 

16 5001 of Public Law 111–5) for each fiscal year for 

17 which the grant is awarded. The total amount of 

18 payments made to States under this paragraph shall 

19 not exceed $25,000,000. 

20 ‘‘(d) HOSPITAL REFERRALS.—A State shall include 

21 in the State plan amendment a requirement for hospitals 

22 that are participating providers under the State plan or 

23 a waiver of such plan to establish procedures for referring 

24 any eligible individuals with chronic conditions who seek 


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1 or need treatment in a hospital emergency department to 

2 designated providers. 

3 ‘‘(e) COORDINATION.—A State shall consult and co4 ordinate, as appropriate, with the Substance Abuse and 

5 Mental Health Services Administration in addressing 

6 issues regarding the prevention and treatment of mental 

7 illness and substance abuse among eligible individuals with 

8 chronic conditions. 

9 ‘‘(f) MONITORING.—A State shall include in the State 

10 plan amendment— 

11 ‘‘(1) a methodology for tracking avoidable hos12 pital readmissions and calculating savings that re13 sult from improved chronic care coordination and 

14 management under this section; and 

15 ‘‘(2) a proposal for use of health information 

16 technology in providing health home services under 

17 this section and improving service delivery and co18 ordination across the care continuum (including the 

19 use of wireless patient technology to improve coordi20 nation and management of care and patient adher21 ence to recommendations made by their provider). 

22 ‘‘(g) REPORT ON QUALITY MEASURES.—As a condi23 tion for receiving payment for health home services pro24 vided to an eligible individual with chronic conditions, a 

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1 ance with such requirements as the Secretary shall specify, 

2 on all applicable measures for determining the quality of 

3 such services. When appropriate and feasible, a designated 

4 provider shall use health information technology in pro5 viding the State with such information. 

6 ‘‘(h) DEFINITIONS.—In this section: 

7 ‘‘(1) ELIGIBLE INDIVIDUAL WITH CHRONIC

8 CONDITIONS.— 

9 ‘‘(A) IN GENERAL.—Subject to subpara10 graph (B), the term ‘eligible individual with 

11 chronic conditions’ means an individual who— 

12 ‘‘(i) is eligible for medical assistance 

13 under the State plan or under a waiver of 

14 such plan; and 

15 ‘‘(ii) has at least— 

16 ‘‘(I) 2 chronic conditions; 

17 ‘‘(II) 1 chronic condition and is 

18 at risk of having a second chronic 

19 condition; or 

20 ‘‘(III) 1 serious and persistent 

21 mental health condition. 

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

23 in this paragraph shall prevent the Secretary 

24 from establishing higher levels as to the number 

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1 tions for purposes of determining eligibility for 

2 receipt of health home services under this sec3 tion. 

4 ‘‘(2) CHRONIC CONDITION.—The term ‘chronic 

5 condition’ has the meaning given that term by the 

6 Secretary and shall include, but is not limited to, the 

7 following: 

8 ‘‘(A) A mental health condition. 

9 ‘‘(B) Substance abuse. 

10 ‘‘(C) Asthma. 

11 ‘‘(D) Diabetes. 

12 ‘‘(E) Heart disease. 

13 ‘‘(F) Being overweight, as evidenced by 

14 having a Body Mass Index (BMI) over 25. 

15 ‘‘(3) DESIGNATED PROVIDER.—The term ‘des16 ignated provider’ means a physician, clinical practice 

17 or clinical group practice, rural clinic, community 

18 health center, community mental health center, 

19 home health agency, or any other entity or provider 

20 (including pediatricians and obstetricians) that is de21 termined by the State and approved by the Sec22 retary to be qualified to be a health home for eligible 

23 individuals with chronic conditions on the basis of 

24 documentation evidencing that the physician, prac25 tice, or clinic— 


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1 ‘‘(A) has the systems and infrastructure in 

2 place to provide health home services; and 

3 ‘‘(B) satisfies the qualification standards 

4 established by the Secretary under subsection 

5 (b). 

6 ‘‘(4) HEALTH HOME.—The term ‘health home’ 

7 means a designated provider (including a provider 

8 that operates in coordination with a team of health 

9 care professionals) selected by an eligible individual 

10 with chronic conditions to provide health home serv11 ices. 

12 ‘‘(5) HEALTH HOME SERVICES.— 

13 ‘‘(A) IN GENERAL.—The term ‘health 

14 home services’ means comprehensive and timely 

15 high-quality services described in subparagraph 

16 (B) that are provided by a designated provider 

17 or a team of health care professionals (as de18 scribed in subparagraph (C)) operating with 

19 such a provider. 

20 ‘‘(B) SERVICES DESCRIBED.—The services 

21 described in this subparagraph are— 

22 ‘‘(i) comprehensive care management; 

23 ‘‘(ii) care coordination and health pro24 motion; 


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1 ‘‘(iii) comprehensive transitional care, 

2 including appropriate follow-up, from inpa3 tient to other settings; 

4 ‘‘(iv) patient and family support; 

5 ‘‘(v) referral to community and social 

6 support services, if relevant; and 

7 ‘‘(vi) use of health information tech8 nology to link services, as feasible and ap9 propriate. 

10 ‘‘(C) TEAM OF HEALTH CARE PROFES11 SIONALS DESCRIBED.—A team of health care 

12 professionals described in this subparagraph is 

13 a team of professionals (as described in the 

14 State plan amendment) that may— 

15 ‘‘(i) include physicians and other pro16 fessionals, such as a nurse care coordi17 nator, nutritionist, social worker, behav18 ioral health professional, or any profes19 sionals deemed appropriate by the State; 

20 and 

21 ‘‘(ii) be free standing, virtual, or 

22 based at a hospital, community health cen23 ter, community mental health center, rural 

24 clinic, clinical practice or clinical group 

25 practice, academic health center, or any 


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1 entity deemed appropriate by the State 

2 and approved by the Secretary.’’. 

3 (b) EVALUATION.— 

4 (1) INDEPENDENT EVALUATION.— 

5 (A) IN GENERAL.—Not later than January 

6 1, 2013, the Secretary shall enter into a con7 tract with an independent entity or organization 

8 to conduct an evaluation and assessment of the 

9 States that have elected the option to provide 

10 coordinated care through a health home for 

11 Medicaid beneficiaries with chronic conditions 

12 under section 1946 of the Social Security Act 

13 (as added by subsection (a)) for the purpose of 

14 determining the effect of such option on reduc15 ing hospital admissions, emergency room visits, 

16 and admissions to skilled nursing facilities. 

17 (B) EVALUATION REPORT.—Not later than 

18 January 1, 2017, the Secretary shall report to 

19 Congress on the evaluation and assessment con20 ducted under subparagraph (A). 

21 (2) SURVEY AND INTERIM REPORT.— 

22 (A) IN GENERAL.—Not later than January 

23 1, 2014, the Secretary of Health and Human 

24 Services shall survey States that have elected 

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1 curity Act (as added by subsection (a)) and re2 port to Congress on the nature, extent, and use 

3 of such option, particularly as it pertains to— 

4 (i) hospital admission rates; 

5 (ii) chronic disease management; 

6 (iii) coordination of care for individ7 uals with chronic conditions; 

8 (iv) assessment of program implemen9 tation; 

10 (v) processes and lessons learned (as 

11 described in subparagraph (B)); 

12 (vi) assessment of quality improve13 ments and clinical outcomes under such 

14 option; and 

15 (vii) estimates of cost savings. 

16 (B) IMPLEMENTATION REPORTING.—A 

17 State that has elected the option under section 

18 1946 of the Social Security Act (as added by 

19 subsection (a)) shall report to the Secretary, as 

20 necessary, on processes that have been devel21 oped and lessons learned regarding provision of 

22 coordinated care through a health home for 

23 Medicaid beneficiaries with chronic conditions 

24 under such option. 


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1 SEC. 2105. FUNDING FOR CHILDHOOD OBESITY DEM2 ONSTRATION PROJECT. 

3 Section 1139A(e)(8) of the Social Security Act (42 

4 U.S.C. 1320b–9a(e)(8)) is amended to read as follows: 

5 ‘‘(8) APPROPRIATION.—Out of any funds in the 

6 Treasury not otherwise appropriated, there is appro7 priated to carry out this subsection, $25,000,000 for 

8 the period of fiscal years 2010 through 2014.’’. 

9 SEC. 2106. PUBLIC AWARENESS OF PREVENTIVE AND OBE10 SITY-RELATED SERVICES. 

11 (a) INFORMATION TO STATES.—The Secretary of 

12 Health and Human Services shall provide guidance and 

13 relevant information to States and health care providers 

14 regarding preventive and obesity-related services that are 

15 available to Medicaid enrollees, including obesity screening 

16 and counseling for children and adults. 

17 (b) INFORMATION TO ENROLLEES.—Each State shall 

18 design a public awareness campaign to educate Medicaid 

19 enrollees regarding availability and coverage of such serv20 ices, with the goal of reducing incidences of obesity. 

21 (c) REPORT.—Not later than January 1, 2011, and 

22 every 3 years thereafter through January 1, 2017, the 

23 Secretary of Health and Human Services shall report to 

24 Congress on the status and effectiveness of efforts under 

25 subsections (a) and (b), including summaries of the 


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1 States’ efforts to increase awareness of coverage of obe2 sity-related services. 

3 TITLE III—IMPROVING THE 

4 QUALITY AND EFFICIENCY OF 

5 HEALTH CARE 

6 Subtitle A—Transforming the 

7 Health Care Delivery System 

8 PART I—LINKING PAYMENT TO QUALITY 

9 OUTCOMES UNDER THE MEDICARE PROGRAM 

10 SEC. 3001. HOSPITAL VALUE-BASED PURCHASING PRO11 GRAM. 

12 (a) PROGRAM.— 

13 (1) IN GENERAL.—Section 1886 of the Social 

14 Security Act (42 U.S.C. 1395ww), as amended by 

15 section 4102(a) of the HITECH Act (Public Law 

16 111–5), is amended by adding at the end the fol17 lowing new subsection: 

18 ‘‘(o) HOSPITAL VALUE-BASED PURCHASING PRO19 GRAM.— 

20 ‘‘(1) ESTABLISHMENT.— 

21 ‘‘(A) IN GENERAL.—Subject to the suc22 ceeding provisions of this subsection, the Sec23 retary shall establish a hospital value-based 

24 purchasing program (in this subsection referred 

25 to as the ‘Program’) under which value-based 


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1 incentive payments are made in a fiscal year to 

2 hospitals that meet the performance standards 

3 under paragraph (3) for the performance period 

4 for such fiscal year (as established under para5 graph (4)). 

6 ‘‘(B) PROGRAM TO BEGIN IN FISCAL YEAR

7 2013.—The Program shall apply to payments 

8 for discharges occurring on or after October 1, 

9 2012. 

10 ‘‘(C) APPLICABILITY OF PROGRAM TO HOS11 PITALS.— 

12 ‘‘(i) IN GENERAL.—For purposes of 

13 this subsection, subject to clause (ii), the 

14 term ‘hospital’ means a subsection (d) hos15 pital (as defined in subsection (d)(1)(B)). 

16 ‘‘(ii) EXCLUSIONS.—The term ‘hos17 pital’ shall not include, with respect to a 

18 fiscal year, a hospital— 

19 ‘‘(I) that is subject to the pay20 ment reduction under subsection 

21 (b)(3)(B)(viii)(I) for such fiscal year; 

22 ‘‘(II) for which, during the per23 formance period for such fiscal year, 

24 the Secretary has cited deficiencies 


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1 that pose immediate jeopardy to the 

2 health or safety of patients; 

3 ‘‘(III) for which there are not a 

4 minimum number (as determined by 

5 the Secretary) of measures that apply 

6 to the hospital for the performance 

7 period for such fiscal year; or 

8 ‘‘(IV) for which there are not a 

9 minimum number (as determined by 

10 the Secretary) of cases for the meas11 ures that apply to the hospital for the 

12 performance period for such fiscal 

13 year. 

14 ‘‘(iii) INDEPENDENT ANALYSIS.—For 

15 purposes of determining the minimum 

16 numbers under subclauses (III) and (IV) 

17 of clause (ii), the Secretary shall have con18 ducted an independent analysis of what 

19 numbers are appropriate. 

20 ‘‘(2) MEASURES.— 

21 ‘‘(A) IN GENERAL.—The Secretary shall 

22 select measures for purposes of the Program. 

23 Such measures shall be selected from the meas24 ures specified under subsection (b)(3)(B)(viii). 

25 ‘‘(B) REQUIREMENTS.— 


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1 ‘‘(i) FOR FISCAL YEAR 2013.—For 

2 value-based incentive payments made with 

3 respect to discharges occurring during fis4 cal year 2013, the Secretary shall ensure 

5 the following: 

6 ‘‘(I) CONDITIONS OR PROCE7 DURES.—Measures are selected under 

8 subparagraph (A) that cover at least 

9 the following 5 specific conditions or 

10 procedures: 

11 ‘‘(aa) Acute myocardial in12 farction (AMI). 

13 ‘‘(bb) Heart failure. 

14 ‘‘(cc) Pneumonia. 

15 ‘‘(dd) Surgeries, as meas16 ured by the Surgical Care Im17 provement Project (formerly re18 ferred to as ‘Surgical Infection 

19 Prevention’ for discharges occur20 ring before July 2006). 

21 ‘‘(ee) Healthcare-associated 

22 infections, as measured by the 

23 prevention metrics and targets 

24 established in the HHS Action 

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1 ciated Infections (or any suc2 cessor plan) of the Department 

3 of Health and Human Services. 

4 ‘‘(II) HCAHPS.—Measures se5 lected under subparagraph (A) shall 

6 be related to the Hospital Consumer 

7 Assessment of Healthcare Providers 

8 and Systems survey (HCAHPS). 

9 ‘‘(ii) INCLUSION OF EFFICIENCY

10 MEASURES.—For value-based incentive 

11 payments made with respect to discharges 

12 occurring during fiscal year 2014 or a sub13 sequent fiscal year, the Secretary shall en14 sure that measures selected under subpara15 graph (A) include efficiency measures, in16 cluding measures of ‘Medicare spending 

17 per beneficiary’. Such measures shall be 

18 adjusted for factors such as age, sex, race, 

19 severity of illness, and other factors that 

20 the Secretary determines appropriate. 

21 ‘‘(C) LIMITATIONS.— 

22 ‘‘(i) TIME REQUIREMENT FOR PRIOR

23 REPORTING AND NOTICE.—The Secretary 

24 may not select a measure under subpara25 graph (A) for use under the Program with 


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1 respect to a performance period for a fiscal 

2 year (as established under paragraph (4)) 

3 unless such measure has been specified 

4 under subsection (b)(3)(B)(viii) and in5 cluded on the Hospital Compare Internet 

6 website for at least 1 year prior to the be7 ginning of such performance period. 

8 ‘‘(ii) MEASURE NOT APPLICABLE UN9 LESS HOSPITAL FURNISHES SERVICES AP10 PROPRIATE TO THE MEASURE.—A measure 

11 selected under subparagraph (A) shall not 

12 apply to a hospital if such hospital does 

13 not furnish services appropriate to such 

14 measure. 

15 ‘‘(D) REPLACING MEASURES.—Subclause 

16 (VI) of subsection (b)(3)(B)(viii) shall apply to 

17 measures selected under subparagraph (A) in 

18 the same manner as such subclause applies to 

19 measures selected under such subsection. 

20 ‘‘(3) PERFORMANCE STANDARDS.— 

21 ‘‘(A) ESTABLISHMENT.—The Secretary 

22 shall establish performance standards with re23 spect to measures selected under paragraph (2) 

24 for a performance period for a fiscal year (as 

25 established under paragraph (4)). 


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1 ‘‘(B) ACHIEVEMENT AND IMPROVE2 MENT.—The performance standards established 

3 under subparagraph (A) shall include levels of 

4 achievement and improvement. 

5 ‘‘(C) TIMING.—The Secretary shall estab6 lish and announce the performance standards 

7 under subparagraph (A) not later than 60 days 

8 prior to the beginning of the performance pe9 riod for the fiscal year involved. 

10 ‘‘(D) CONSIDERATIONS IN ESTABLISHING

11 STANDARDS.—In establishing performance 

12 standards with respect to measures under this 

13 paragraph, the Secretary shall take into ac14 count appropriate factors, such as— 

15 ‘‘(i) practical experience with the 

16 measures involved, including whether a sig17 nificant proportion of hospitals failed to 

18 meet the performance standard during pre19 vious performance periods; 

20 ‘‘(ii) historical performance standards; 

21 ‘‘(iii) improvement rates; and 

22 ‘‘(iv) the opportunity for continued 

23 improvement. 

24 ‘‘(4) PERFORMANCE PERIOD.—For purposes of 

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1 formance period for a fiscal year. Such performance 

2 period shall begin and end prior to the beginning of 

3 such fiscal year. 

4 ‘‘(5) HOSPITAL PERFORMANCE SCORE.— 

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), the Secretary shall develop a meth7 odology for assessing the total performance of 

8 each hospital based on performance standards 

9 with respect to the measures selected under 

10 paragraph (2) for a performance period (as es11 tablished under paragraph (4)). Using such 

12 methodology, the Secretary shall provide for an 

13 assessment (in this subsection referred to as the 

14 ‘hospital performance score’) for each hospital 

15 for each performance period. 

16 ‘‘(B) APPLICATION.— 

17 ‘‘(i) APPROPRIATE DISTRIBUTION.— 

18 The Secretary shall ensure that the appli19 cation of the methodology developed under 

20 subparagraph (A) results in an appropriate 

21 distribution of value-based incentive pay22 ments under paragraph (6) among hos23 pitals achieving different levels of hospital 

24 performance scores, with hospitals achiev25 ing the highest hospital performance scores 


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1 receiving the largest value-based incentive 

2 payments. 

3 ‘‘(ii) HIGHER OF ACHIEVEMENT OR

4 IMPROVEMENT.—The methodology devel5 oped under subparagraph (A) shall provide 

6 that the hospital performance score is de7 termined using the higher of its achieve8 ment or improvement score for each meas9 ure. 

10 ‘‘(iii) WEIGHTS.—The methodology 

11 developed under subparagraph (A) shall 

12 provide for the assignment of weights for 

13 categories of measures as the Secretary de14 termines appropriate. 

15 ‘‘(iv) NO MINIMUM PERFORMANCE

16 STANDARD.—The Secretary shall not set a 

17 minimum performance standard in deter18 mining the hospital performance score for 

19 any hospital. 

20 ‘‘(v) REFLECTION OF MEASURES AP21 PLICABLE TO THE HOSPITAL.—The hos22 pital performance score for a hospital shall 

23 reflect the measures that apply to the hos24 pital. 


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1 ‘‘(6) CALCULATION OF VALUE-BASED INCEN2 TIVE PAYMENTS.— 

3 ‘‘(A) IN GENERAL.—In the case of a hos4 pital that the Secretary determines meets (or 

5 exceeds) the performance standards under para6 graph (3) for the performance period for a fis7 cal year (as established under paragraph (4)), 

8 the Secretary shall increase the base operating 

9 DRG payment amount (as defined in paragraph 

10 (7)(D)), as determined after application of 

11 paragraph (7)(B)(i), for a hospital for each dis12 charge occurring in such fiscal year by the 

13 value-based incentive payment amount. 

14 ‘‘(B) VALUE-BASED INCENTIVE PAYMENT

15 AMOUNT.—The value-based incentive payment 

16 amount for each discharge of a hospital in a fis17 cal year shall be equal to the product of— 

18 ‘‘(i) the base operating DRG payment 

19 amount (as defined in paragraph (7)(D)) 

20 for the discharge for the hospital for such 

21 fiscal year; and 

22 ‘‘(ii) the value-based incentive pay23 ment percentage specified under subpara24 graph (C) for the hospital for such fiscal 

25 year. 


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1 ‘‘(C) VALUE-BASED INCENTIVE PAYMENT

2 PERCENTAGE.— 

3 ‘‘(i) IN GENERAL.—The Secretary 

4 shall specify a value-based incentive pay5 ment percentage for a hospital for a fiscal 

6 year. 

7 ‘‘(ii) REQUIREMENTS.—In specifying 

8 the value-based incentive payment percent9 age for each hospital for a fiscal year 

10 under clause (i), the Secretary shall ensure 

11 that— 

12 ‘‘(I) such percentage is based on 

13 the hospital performance score of the 

14 hospital under paragraph (5); and 

15 ‘‘(II) the total amount of value16 based incentive payments under this 

17 paragraph to all hospitals in such fis18 cal year is equal to the total amount 

19 available for value-based incentive 

20 payments for such fiscal year under 

21 paragraph (7)(A), as estimated by the 

22 Secretary. 

23 ‘‘(7) FUNDING FOR VALUE-BASED INCENTIVE

24 PAYMENTS.— 


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1 ‘‘(A) AMOUNT.—The total amount avail2 able for value-based incentive payments under 

3 paragraph (6) for all hospitals for a fiscal year 

4 shall be equal to the total amount of reduced 

5 payments for all hospitals under subparagraph 

6 (B) for such fiscal year, as estimated by the 

7 Secretary. 

8 ‘‘(B) ADJUSTMENT TO PAYMENTS.— 

9 ‘‘(i) IN GENERAL.—The Secretary 

10 shall reduce the base operating DRG pay11 ment amount (as defined in subparagraph 

12 (D)) for a hospital for each discharge in a 

13 fiscal year (beginning with fiscal year 

14 2013) by an amount equal to the applica15 ble percent (as defined in subparagraph 

16 (C)) of the base operating DRG payment 

17 amount for the discharge for the hospital 

18 for such fiscal year. The Secretary shall 

19 make such reductions for all hospitals in 

20 the fiscal year involved, regardless of 

21 whether or not the hospital has been deter22 mined by the Secretary to have earned a 

23 value-based incentive payment under para24 graph (6) for such fiscal year. 


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1 ‘‘(ii) NO EFFECT ON OTHER PAY2 MENTS.—Payments described in items (aa) 

3 and (bb) of subparagraph (D)(i)(II) for a 

4 hospital shall be determined as if this sub5 section had not been enacted. 

6 ‘‘(C) APPLICABLE PERCENT DEFINED.— 

7 For purposes of subparagraph (B), the term 

8 ‘applicable percent’ means— 

9 ‘‘(i) with respect to fiscal year 2013, 

10 1.0 percent; 

11 ‘‘(ii) with respect to fiscal year 2014, 

12 1.25 percent; 

13 ‘‘(iii) with respect to fiscal year 2015, 

14 1.5 percent; 

15 ‘‘(iv) with respect to fiscal year 2016, 

16 1.75 percent; and 

17 ‘‘(v) with respect to fiscal year 2017 

18 and succeeding fiscal years, 2 percent. 

19 ‘‘(D) BASE OPERATING DRG PAYMENT

20 AMOUNT DEFINED.— 

21 ‘‘(i) IN GENERAL.—Except as pro22 vided in clause (ii), in this subsection, the 

23 term ‘base operating DRG payment 

24 amount’ means, with respect to a hospital 

25 for a fiscal year— 


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1 ‘‘(I) the payment amount that 

2 would otherwise be made under sub3 section (d) for a discharge if this sub4 section did not apply; reduced by 

5 ‘‘(II) any portion of such pay6 ment amount that is attributable to— 

7 ‘‘(aa) payments under para8 graphs (5)(A), (5)(B), (5)(F), 

9 and (12) of subsection (d); and 

10 ‘‘(bb) such other payments 

11 under subsection (d) determined 

12 appropriate by the Secretary. 

13 ‘‘(ii) SPECIAL RULES FOR CERTAIN

14 HOSPITALS.— 

15 ‘‘(I) SOLE COMMUNITY HOS16 PITALS AND MEDICARE-DEPENDENT, 

17 SMALL RURAL HOSPITALS.—In the 

18 case of a medicare-dependent, small 

19 rural hospital (with respect to dis20 charges occurring during fiscal year 

21 2012 and 2013) or a sole community 

22 hospital, in applying subparagraph 

23 (A)(i), the payment amount that 

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1 out regard to subparagraphs (I) and 

2 (L) of subsection (b)(3) and subpara3 graphs (D) and (G) of subsection 

4 (d)(5). 

5 ‘‘(II) HOSPITALS PAID UNDER

6 SECTION 1814.—In the case of a hos7 pital that is paid under section 

8 1814(b)(3), the term ‘base operating 

9 DRG payment amount’ means the 

10 payment amount under such section. 

11 ‘‘(8) ANNOUNCEMENT OF NET RESULT OF AD12 JUSTMENTS.—Under the Program, the Secretary 

13 shall, not later than 60 days prior to the fiscal year 

14 involved, inform each hospital of the adjustments to 

15 payments to the hospital for discharges occurring in 

16 such fiscal year under paragraphs (6) and (7)(B)(i). 

17 ‘‘(9) NO EFFECT IN SUBSEQUENT FISCAL

18 YEARS.—The value-based incentive payment under 

19 paragraph (6) and the payment reduction under 

20 paragraph (7)(B)(i) shall each apply only with re21 spect to the fiscal year involved, and the Secretary 

22 shall not take into account such value-based incen23 tive payment or payment reduction in making pay24 ments to a hospital under this section in a subse25 quent fiscal year. 


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1 ‘‘(10) PUBLIC REPORTING.— 

2 ‘‘(A) HOSPITAL SPECIFIC INFORMATION.— 

3 ‘‘(i) IN GENERAL.—The Secretary 

4 shall make information available to the 

5 public regarding the performance of indi6 vidual hospitals under the Program, in7 cluding— 

8 ‘‘(I) the performance of the hos9 pital with respect to each measure 

10 that applies to the hospital; 

11 ‘‘(II) the performance of the hos12 pital with respect to each condition or 

13 procedure; and 

14 ‘‘(III) the hospital performance 

15 score assessing the total performance 

16 of the hospital. 

17 ‘‘(ii) OPPORTUNITY TO REVIEW AND

18 SUBMIT CORRECTIONS.—The Secretary 

19 shall ensure that a hospital has the oppor20 tunity to review, and submit corrections 

21 for, the information to be made public with 

22 respect to the hospital under clause (i) 

23 prior to such information being made pub24 lic. 


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1 ‘‘(iii) WEBSITE.—Such information 

2 shall be posted on the Hospital Compare 

3 Internet website in an easily understand4 able format. 

5 ‘‘(B) AGGREGATE INFORMATION.—The 

6 Secretary shall periodically post on the Hospital 

7 Compare Internet website aggregate informa8 tion on the Program, including— 

9 ‘‘(i) the number of hospitals receiving 

10 value-based incentive payments under 

11 paragraph (6) and the range and total 

12 amount of such value-based incentive pay13 ments; and 

14 ‘‘(ii) the number of hospitals receiving 

15 less than the maximum value-based incen16 tive payment available to the hospital for 

17 the fiscal year involved and the range and 

18 amount of such payments. 

19 ‘‘(11) IMPLEMENTATION.— 

20 ‘‘(A) APPEALS.—The Secretary shall es21 tablish a process by which hospitals may appeal 

22 the calculation of a hospital’s performance as23 sessment with respect to the performance 

24 standards established under paragraph (3)(A) 

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1 graph (5). The Secretary shall ensure that such 

2 process provides for resolution of such appeals 

3 in a timely manner. 

4 ‘‘(B) LIMITATION ON REVIEW.—Except as 

5 provided in subparagraph (A), there shall be no 

6 administrative or judicial review under section 

7 1869, section 1878, or otherwise of the fol8 lowing: 

9 ‘‘(i) The methodology used to deter10 mine the amount of the value-based incen11 tive payment under paragraph (6) and the 

12 determination of such amount. 

13 ‘‘(ii) The determination of the amount 

14 of funding available for such value-based 

15 incentive payments under paragraph 

16 (7)(A) and the payment reduction under 

17 paragraph (7)(B)(i). 

18 ‘‘(iii) The establishment of the per19 formance standards under paragraph (3) 

20 and the performance period under para21 graph (4). 

22 ‘‘(iv) The measures specified under 

23 subsection (b)(3)(B)(viii) and the measures 

24 selected under paragraph (2). 


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1 ‘‘(v) The methodology developed under 

2 paragraph (5) that is used to calculate 

3 hospital performance scores and the cal4 culation of such scores. 

5 ‘‘(vi) The validation methodology 

6 specified in subsection (b)(3)(B)(viii)(XI). 

7 ‘‘(C) CONSULTATION WITH SMALL HOS8 PITALS.—The Secretary shall consult with small 

9 rural and urban hospitals on the application of 

10 the Program to such hospitals. 

11 ‘‘(12) PROMULGATION OF REGULATIONS.—The 

12 Secretary shall promulgate regulations to carry out 

13 the Program, including the selection of measures 

14 under paragraph (2), the methodology developed 

15 under paragraph (5) that is used to calculate hos16 pital performance scores, and the methodology used 

17 to determine the amount of value-based incentive 

18 payments under paragraph (6).’’. 

19 (2) AMENDMENTS FOR REPORTING OF HOS20 PITAL QUALITY INFORMATION.—Section 

21 1886(b)(3)(B)(viii) of the Social Security Act (42 

22 U.S.C. 1395ww(b)(3)(B)(viii)) is amended— 

23 (A) in subclause (II), by adding at the end 

24 the following sentence: ‘‘The Secretary may re25 quire hospitals to submit data on measures that 


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1 are not used for the determination of value2 based incentive payments under subsection 

3 (o).’’; 

4 (B) in subclause (V), by striking ‘‘begin5 ning with fiscal year 2008’’ and inserting ‘‘for 

6 fiscal years 2008 through 2012’’; 

7 (C) in subclause (VII), in the first sen8 tence, by striking ‘‘data submitted’’ and insert9 ing ‘‘information regarding measures sub10 mitted’’; and 

11 (D) by adding at the end the following new 

12 subclauses: 

13 ‘‘(VIII) Effective for payments beginning with fiscal 

14 year 2013, with respect to quality measures for outcomes 

15 of care, the Secretary shall provide for such risk adjust16 ment as the Secretary determines to be appropriate to 

17 maintain incentives for hospitals to treat patients with se18 vere illnesses or conditions. 

19 ‘‘(IX) Effective for payments beginning with fiscal 

20 year 2013, each measure specified by the Secretary under 

21 this clause shall be endorsed under paragraph (1) of sec22 tion 1890C(f) or used as a result of a determination under 

23 paragraph (2) of such section. 

24 ‘‘(X) To the extent practicable, the Secretary shall, 

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1 holders, take steps to ensure that the measures specified 

2 by the Secretary under this clause are coordinated and 

3 aligned with quality measures applicable to— 

4 ‘‘(aa) physicians under section 1848(k); and 

5 ‘‘(bb) other providers of services and suppliers 

6 under this title. 

7 ‘‘(XI) The Secretary shall establish a process to vali8 date measures specified under this clause as appropriate. 

9 Such process shall include the auditing of a number of 

10 randomly selected hospitals sufficient to ensure validity of 

11 the reporting program under this clause as a whole and 

12 shall provide a hospital with an opportunity to appeal the 

13 validation of measures reported by such hospital.’’. 

14 (3) WEBSITE IMPROVEMENTS.—Section 

15 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 

16 1395ww(b)(3)(B)), as amended by section 4102(b) 

17 of the HITECH Act (Public Law 111–5), is amend18 ed by adding at the end the following new clause: 

19 ‘‘(ix)(I) The Secretary shall develop standard Inter20 net website reports tailored to meet the needs of various 

21 stakeholders such as hospitals, patients, researchers, and 

22 policymakers. The Secretary shall seek input from such 

23 stakeholders in determining the type of information that 

24 is useful and the formats that best facilitate the use of 

25 the information. 


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1 ‘‘(II) The Secretary shall modify the Hospital Com2 pare Internet website to make the use and navigation of 

3 that website readily available to individuals accessing it.’’. 

4 (4) GAO STUDY AND REPORT.— 

5 (A) STUDY.—The Comptroller General of 

6 the United States shall conduct a study on the 

7 performance of the hospital value-based pur8 chasing program established under section 

9 1886(o) of the Social Security Act, as added by 

10 paragraph (1). Such study shall include an 

11 analysis of the impact of such program on— 

12 (i) the quality of care furnished to 

13 Medicare beneficiaries, including diverse 

14 Medicare beneficiary populations (such as 

15 diverse in terms of race, ethnicity, and so16 cioeconomic status); 

17 (ii) expenditures under the Medicare 

18 program, including any reduced expendi19 tures under Part A of title XVIII of such 

20 Act that are attributable to the improve21 ment in the delivery of inpatient hospital 

22 services by reason of such hospital value23 based purchasing program; 

24 (iii) the quality performance among 

25 safety net hospitals and any barriers such 


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1 hospitals face in meeting the performance 

2 standards applicable under such hospital 

3 value-based purchasing program; and 

4 (iv) the quality performance among 

5 small rural and small urban hospitals and 

6 any barriers such hospitals face in meeting 

7 the performance standards applicable 

8 under such hospital value-based purchasing 

9 program. 

10 (B) REPORTS.— 

11 (i) INTERIM REPORT.—Not later than 

12 October 1, 2015, the Comptroller General 

13 of the United States shall submit to Con14 gress an interim report containing the re15 sults of the study conducted under sub16 paragraph (A), together with recommenda17 tions for such legislation and administra18 tive action as the Comptroller General de19 termines appropriate. 

20 (ii) FINAL REPORT.—Not later than 

21 July 1, 2017, the Comptroller General of 

22 the United States shall submit to Congress 

23 a report containing the results of the study 

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1 islation and administrative action as the 

2 Comptroller General determines appro3 priate. 

4 (5) HHS STUDY AND REPORT.— 

5 (A) STUDY.—The Secretary of Health and 

6 Human Services shall conduct a study on the 

7 performance of the hospital value-based pur8 chasing program established under section 

9 1886(o) of the Social Security Act, as added by 

10 paragraph (1). Such study shall include an 

11 analysis— 

12 (i) of ways to improve the hospital 

13 value-based purchasing program and ways 

14 to address any unintended consequences 

15 that may occur as a result of such pro16 gram; 

17 (ii) of whether the hospital value18 based purchasing program resulted in 

19 lower spending under the Medicare pro20 gram under title XVIII of such Act or 

21 other financial savings to hospitals; 

22 (iii) the appropriateness of the Medi23 care program sharing in any savings gen24 erated through the hospital value-based 

25 purchasing program; and 


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1 (iv) any other area determined appro2 priate by the Secretary. 

3 (B) REPORT.—Not later than January 1, 

4 2016, the Secretary of Health and Human 

5 Services shall submit to Congress a report con6 taining the results of the study conducted under 

7 subparagraph (A), together with recommenda8 tions for such legislation and administrative ac9 tion as the Secretary determines appropriate. 

10 (b) VALUE-BASED PURCHASING DEMONSTRATION

11 PROGRAMS.— 

12 (1) VALUE-BASED PURCHASING DEMONSTRA13 TION PROGRAM FOR INPATIENT CRITICAL ACCESS

14 HOSPITALS.— 

15 (A) ESTABLISHMENT.— 

16 (i) IN GENERAL.—Not later than 2 

17 years after the date of enactment of this 

18 Act, the Secretary of Health and Human 

19 Services (in this subsection referred to as 

20 the ‘‘Secretary’’) shall establish a dem21 onstration program under which the Sec22 retary establishes a value-based purchasing 

23 program under the Medicare program 

24 under title XVIII of the Social Security 

25 Act for critical access hospitals (as defined 


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1 in paragraph (1) of section 1861(mm) of 

2 such Act (42 U.S.C. 1395x(mm))) with re3 spect to inpatient critical access hospital 

4 services (as defined in paragraph (2) of 

5 such section) in order to test innovative 

6 methods of measuring and rewarding qual7 ity health care furnished by such hospitals. 

8 (ii) DURATION.—The demonstration 

9 program under this paragraph shall be 

10 conducted for a 3-year period. 

11 (iii) SITES.—The Secretary shall con12 duct the demonstration program under this 

13 paragraph at an appropriate number (as 

14 determined by the Secretary) of critical ac15 cess hospitals. The Secretary shall ensure 

16 that such hospitals are representative of 

17 the spectrum of such hospitals that partici18 pate in the Medicare program. 

19 (B) WAIVER AUTHORITY.—The Secretary 

20 may waive such requirements of titles XI and 

21 XVIII of the Social Security Act as may be nec22 essary to carry out the demonstration program 

23 under this paragraph. 

24 (C) REPORT.—Not later than 18 months 

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1 gram under this paragraph, the Secretary shall 

2 submit to Congress a report on the demonstra3 tion program together with— 

4 (i) recommendations on the establish5 ment of a permanent value-based pur6 chasing program under the Medicare pro7 gram for critical access hospitals with re8 spect to inpatient critical access hospital 

9 services; and 

10 (ii) recommendations for such other 

11 legislation and administrative action as the 

12 Secretary determines appropriate. 

13 (2) VALUE-BASED PURCHASING DEMONSTRA14 TION PROGRAM FOR HOSPITALS EXCLUDED FROM

15 HOSPITAL VALUE-BASED PURCHASING PROGRAM AS

16 A RESULT OF INSUFFICIENT NUMBERS OF MEAS17 URES AND CASES.— 

18 (A) ESTABLISHMENT.— 

19 (i) IN GENERAL.—Not later than 2 

20 years after the date of enactment of this 

21 Act, the Secretary shall establish a dem22 onstration program under which the Sec23 retary establishes a value-based purchasing 

24 program under the Medicare program 

25 under title XVIII of the Social Security 


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1 Act for applicable hospitals (as defined in 

2 clause (ii)) with respect to inpatient hos3 pital services (as defined in section 

4 1861(b) of the Social Security Act (42 

5 U.S.C. 1395x(b))) in order to test innova6 tive methods of measuring and rewarding 

7 quality health care furnished by such hos8 pitals. 

9 (ii) APPLICABLE HOSPITAL DE10 FINED.—For purposes of this paragraph, 

11 the term ‘‘applicable hospital’’ means a 

12 hospital described in subclause (III) or 

13 (IV) of section 1886(o)(1)(C)(ii) of the So14 cial Security Act, as added by subsection 

15 (a)(1). 

16 (iii) DURATION.—The demonstration 

17 program under this paragraph shall be 

18 conducted for a 3-year period. 

19 (iv) SITES.—The Secretary shall con20 duct the demonstration program under this 

21 paragraph at an appropriate number (as 

22 determined by the Secretary) of applicable 

23 hospitals. The Secretary shall ensure that 

24 such hospitals are representative of the 


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1 spectrum of such hospitals that participate 

2 in the Medicare program. 

3 (B) WAIVER AUTHORITY.—The Secretary 

4 may waive such requirements of titles XI and 

5 XVIII of the Social Security Act as may be nec6 essary to carry out the demonstration program 

7 under this paragraph. 

8 (C) REPORT.—Not later than 18 months 

9 after the completion of the demonstration pro10 gram under this paragraph, the Secretary shall 

11 submit to Congress a report on the demonstra12 tion program together with— 

13 (i) recommendations on the establish14 ment of a permanent value-based pur15 chasing program under the Medicare pro16 gram for applicable hospitals with respect 

17 to inpatient hospital services; and 

18 (ii) recommendations for such other 

19 legislation and administrative action as the 

20 Secretary determines appropriate. 

21 SEC. 3002. IMPROVEMENTS TO THE PHYSICIAN QUALITY 

22 REPORTING SYSTEM. 

23 (a) EXTENSION.—Section 1848(m) of the Social Se24 curity Act (42 U.S.C. 1395w–4(m)) is amended— 

25 (1) in paragraph (1)— 


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1 (A) in subparagraph (A), in the matter 

2 preceding clause (i), by striking ‘‘2010’’ and in3 serting ‘‘2012’’; and 

4 (B) in subparagraph (B)— 

5 (i) in clause (i), by striking ‘‘and’’ at 

6 the end; 

7 (ii) in clause (ii), by striking the pe8 riod at the end and inserting a semicolon; 

9 and 

10 (iii) by adding at the end the fol11 lowing new clauses: 

12 ‘‘(iii) for 2011, 1.0 percent; and 

13 ‘‘(iv) for 2012, 0.5 percent.’’; 

14 (2) in paragraph (3)— 

15 (A) in subparagraph (A), in the matter 

16 preceding clause (i), by inserting ‘‘(or, for pur17 poses of subsection (a)(8), for the quality re18 porting period for the year)’’ after ‘‘reporting 

19 period’’; and 

20 (B) in subparagraph (C)(i), by inserting ‘‘, 

21 or, for purposes of subsection (a)(8), for a qual22 ity reporting period for the year’’ after ‘‘(a)(5), 

23 for a reporting period for a year’’; 


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1 (3) in paragraph (5)(E)(iv), by striking ‘‘sub2 section (a)(5)(A)’’ and inserting ‘‘paragraphs (5)(A) 

3 and (8)(A) of subsection (a)’’; and 

4 (4) in paragraph (6)(C)— 

5 (A) in clause (i)(II), by striking ‘‘, 2009, 

6 2010, and 2011’’ and inserting ‘‘and subse7 quent years’’; and 

8 (B) in clause (iii)— 

9 (i) by inserting ‘‘(a)(8)’’ after 

10 ‘‘(a)(5)’’; and 

11 (ii) by striking ‘‘under subparagraph 

12 (D)(iii) of such subsection’’ and inserting 

13 ‘‘under subsection (a)(5)(D)(iii) or the 

14 quality reporting period under subsection 

15 (a)(8)(D)(iii), respectively’’. 

16 (b) INCENTIVE PAYMENT ADJUSTMENT FOR QUAL17 ITY REPORTING.—Section 1848(a) of the Social Security 

18 Act (42 U.S.C. 1395w–4(a)) is amended by adding at the 

19 end the following new paragraph: 

20 ‘‘(8) INCENTIVES FOR QUALITY REPORTING.— 

21 ‘‘(A) ADJUSTMENT.— 

22 ‘‘(i) IN GENERAL.—With respect to 

23 covered professional services furnished by 

24 an eligible professional during 2013 or any 

25 subsequent year, if the eligible professional 


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1 does not satisfactorily submit data on qual2 ity measures for covered professional serv3 ices for the quality reporting period for the 

4 year (as determined under subsection 

5 (m)(3)(A)), the fee schedule amount for 

6 such services furnished by such profes7 sional during the year (including the fee 

8 schedule amount for purposes of deter9 mining a payment based on such amount) 

10 shall be equal to the applicable percent of 

11 the fee schedule amount that would other12 wise apply to such services under this sub13 section (determined after application of 

14 paragraphs (3), (5), and (7), but without 

15 regard to this paragraph). 

16 ‘‘(ii) APPLICABLE PERCENT.—For 

17 purposes of clause (i), the term ‘applicable 

18 percent’ means— 

19 ‘‘(I) for 2013, 98.5 percent; and 

20 ‘‘(II) for 2014 and each subse21 quent year, 98 percent. 

22 ‘‘(B) APPLICATION.— 

23 ‘‘(i) PHYSICIAN REPORTING SYSTEM

24 RULES.—Paragraphs (5), (6), and (8) of 

25 subsection (k) shall apply for purposes of 


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1 this paragraph in the same manner as they 

2 apply for purposes of such subsection. 

3 ‘‘(ii) INCENTIVE PAYMENT VALIDA4 TION RULES.—Clauses (ii) and (iii) of sub5 section (m)(5)(D) shall apply for purposes 

6 of this paragraph in a similar manner as 

7 they apply for purposes of such subsection. 

8 ‘‘(C) DEFINITIONS.—For purposes of this 

9 paragraph: 

10 ‘‘(i) ELIGIBLE PROFESSIONAL; COV11 ERED PROFESSIONAL SERVICES.—The 

12 terms ‘eligible professional’ and ‘covered 

13 professional services’ have the meanings 

14 given such terms in subsection (k)(3). 

15 ‘‘(ii) PHYSICIAN REPORTING SYS16 TEM.—The term ‘physician reporting sys17 tem’ means the system established under 

18 subsection (k). 

19 ‘‘(iii) QUALITY REPORTING PERIOD.— 

20 The term ‘quality reporting period’ means, 

21 with respect to a year, a period specified 

22 by the Secretary.’’. 

23 (c) ADDITIONAL MECHANISM FOR DETERMINING

24 SATISFACTORY AND SUCCESSFUL REPORTING.—Section 

25 1848(m)(3) of the Social Security Act (42 U.S.C. 1395w– 


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1 4(m)(3)) is amended by adding at the end the following 

2 new subparagraph: 

3 ‘‘(E) ADDITIONAL MECHANISM FOR SATIS4 FACTORY AND SUCCESSFUL REPORTING OF

5 MEASURES.— 

6 ‘‘(i) IN GENERAL.—Not later than 

7 January 1, 2011, the Secretary shall es8 tablish and have in place a process under 

9 which an eligible professional shall be 

10 treated as satisfactorily submitting data on 

11 quality measures under subparagraph (A) 

12 and as meeting the requirement described 

13 in subparagraph (B)(ii) for covered profes14 sional services for reporting periods for 2 

15 consecutive years (or, for purposes of sub16 section (a)(5), for reporting periods for 2 

17 consecutive years, or, for purposes of sub18 section (a)(8), for quality reporting periods 

19 for 2 consecutive years) if, during the re20 porting period of the first of such years, 

21 the eligible professional— 

22 ‘‘(I) participates in a program 

23 described in clause (ii); and 

24 ‘‘(II) completes a qualified MOC 

25 practice assessment. 


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1 ‘‘(ii) PROGRAM DESCRIBED.—A pro2 gram described in this clause is a qualified 

3 American Board of Medical Specialties 

4 Maintenance of Certification program 

5 (commonly referred to as a ‘Maintenance 

6 of Certification program’ or ‘MOC’) or an 

7 equivalent program (as determined by the 

8 Secretary) that— 

9 ‘‘(I) satisfactorily submits data 

10 through the mechanism described in 

11 subsection (k)(4) on quality measures 

12 under subparagraph (A) with respect 

13 to the eligible professional for the re14 porting period for the first year of 

15 such 2 consecutive years (as deter16 mined as determined by the Sec17 retary); and 

18 ‘‘(II) submits to the Secretary (in 

19 accordance with procedures estab20 lished by the Secretary under clause 

21 (iv)(II)) the information described in 

22 clause (iv)(I). 

23 ‘‘(iii) QUALIFIED MOC PRACTICE AS24 SESSMENT.—For purposes of clauses 

25 (i)(II), the term ‘qualified MOC practice 


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1 assessment’ means an assessment of a phy2 sician’s practice that includes an initial as3 sessment of an eligible professional’s prac4 tice, is designed to demonstrate the eligible 

5 professional’s use of evidence-based medi6 cine, and would seek to improve quality of 

7 care through follow-up assessments. 

8 ‘‘(iv) INFORMATION DESCRIBED AND

9 ESTABLISHMENT OF PROCEDURES.— 

10 ‘‘(I) INFORMATION DE11 SCRIBED.—The information described 

12 in this subclause is the methods, 

13 measures, and data used under a pro14 gram described in clause (ii) or a 

15 qualified MOC practice assessment 

16 under clause (iii). 

17 ‘‘(II) PROCEDURES.—The Sec18 retary, in consultation with programs 

19 described in clause (ii), shall establish 

20 procedures for the submission of in21 formation under clause (ii). Such pro22 cedures shall ensure that the informa23 tion described in subclause (I) allows 

24 for innovation and appropriateness 


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1 with respect to the specialty of the eli2 gible professional.’’. 

3 (d) INTEGRATION OF PHYSICIAN QUALITY REPORT4 ING AND EHR REPORTING.—Section 1848(m) of the So5 cial Security Act (42 U.S.C. 1395w–4(m)) is amended by 

6 adding at the end the following new paragraph: 

7 ‘‘(7) INTEGRATION OF PHYSICIAN QUALITY RE8 PORTING AND EHR REPORTING.—Not later than 

9 January 1, 2012, the Secretary shall develop a plan 

10 to integrate reporting on quality measures under 

11 this subsection with reporting requirements under 

12 subsection (o) relating to the meaningful use of elec13 tronic health records. Such integration shall consist 

14 of the following: 

15 ‘‘(A) The selection of measures, the report16 ing of which would both demonstrate— 

17 ‘‘(i) meaningful use of an electronic 

18 health record for purposes of subsection 

19 (o); and 

20 ‘‘(ii) quality of care furnished to an 

21 individual. 

22 ‘‘(B) Such other activities as specified by 

23 the Secretary.’’. 


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1 (e) FEEDBACK.—Section 1848(m)(5) of the Social 

2 Security Act (42 U.S.C. 1395w–4(m)(5)) is amended by 

3 adding at the end the following new subparagraph: 

4 ‘‘(H) FEEDBACK.—The Secretary shall 

5 provide timely feedback to eligible professionals 

6 on the performance of the eligible professional 

7 with respect to satisfactorily submitting data on 

8 quality measures under this subsection.’’. 

9 (f) APPEALS.—Such section is further amended— 

10 (1) in subparagraph (E), by striking ‘‘There 

11 shall’’ and inserting ‘‘Except as provided in subpara12 graph (I), there shall’’; and 

13 (2) by adding at the end the following new sub14 paragraph: 

15 ‘‘(I) INFORMAL APPEALS PROCESS.—The 

16 Secretary shall, by not later than January 1, 

17 2011, establish and have in place an informal 

18 process for eligible professionals to seek a re19 view of the determination that an eligible pro20 fessional did not satisfactorily submit data on 

21 quality measures under this subsection.’’. 

22 SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK 

23 PROGRAM. 

24 (a) IMPROVEMENTS.— 


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1 (1) IN GENERAL.—Section 1848(n) of the So2 cial Security Act (42 U.S.C. 1395w–4(n)) is amend3 ed— 

4 (A) in paragraph (1)— 

5 (i) in subparagraph (A)— 

6 (I) by striking ‘‘GENERAL.—The 

7 Secretary’’ and inserting ‘‘GEN8 ERAL.— 

9 ‘‘(i) ESTABLISHMENT.—The Sec10 retary’’; 

11 (II) in clause (i), as added by 

12 clause (i), by striking ‘‘the ‘Pro13 gram’)’’ and all that follows through 

14 the period at the end of the second 

15 sentence and inserting ‘‘the ‘Pro16 gram’).’’; and 

17 (III) by adding at the end the 

18 following new clauses: 

19 ‘‘(ii) REPORTS ON RESOURCES.—The 

20 Secretary shall use claims data under this 

21 title (and may use other data) to provide 

22 confidential reports to physicians (and, as 

23 determined appropriate by the Secretary, 

24 to groups of physicians) that measure the 


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1 resources involved in furnishing care to in2 dividuals under this title. 

3 ‘‘(iii) INCLUSION OF CERTAIN INFOR4 MATION.—If determined appropriate by 

5 the Secretary, the Secretary may include 

6 information on the quality of care fur7 nished to individuals under this title by the 

8 physician (or group of physicians) in such 

9 reports.’’; and 

10 (ii) in subparagraph (B), by striking 

11 ‘‘subparagraph (A)’’ and inserting ‘‘sub12 paragraph (A)(ii)’’; 

13 (B) in paragraph (4)— 

14 (i) in the heading, by inserting ‘‘INI15 TIAL’’ after ‘‘FOCUS’’; and 

16 (ii) in the matter preceding subpara17 graph (A), by inserting ‘‘initial’’ after 

18 ‘‘focus the’’; 

19 (C) in paragraph (6), by adding at the end 

20 the following new sentence: ‘‘For adjustments 

21 for reports on utilization under paragraph (9), 

22 see subparagraph (D) of such paragraph.’’; and 

23 (D) by adding at the end the following new 

24 paragraphs: 

25 ‘‘(9) REPORTS ON UTILIZATION.— 


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1 ‘‘(A) DEVELOPMENT OF EPISODE GROUP2 ER.— 

3 ‘‘(i) IN GENERAL.—The Secretary 

4 shall develop an episode grouper that com5 bines separate but clinically related items 

6 and services into an episode of care for an 

7 individual, as appropriate. 

8 ‘‘(ii) TIMELINE FOR DEVELOP9 MENT.—The episode grouper described in 

10 subparagraph (A) shall be developed by not 

11 later than January 1, 2012. 

12 ‘‘(iii) PUBLIC AVAILABILITY.—The 

13 Secretary shall make the details of the epi14 sode grouper described in subparagraph 

15 (A) available to the public. 

16 ‘‘(iv) ENDORSEMENT.—The Secretary 

17 shall seek endorsement of the episode 

18 grouper described in subparagraph (A) by 

19 the entity with a contract under section 

20 1890(a). 

21 ‘‘(B) REPORTS ON UTILIZATION.—Effec22 tive beginning with 2012, the Secretary shall 

23 provide reports to physicians that compare, as 

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1 terns of resource use of the individual physician 

2 to such patterns of other physicians. 

3 ‘‘(C) ANALYSIS OF DATA.—The Secretary 

4 shall, for purposes of preparing reports under 

5 this paragraph, establish methodologies as ap6 propriate, such as to— 

7 ‘‘(i) attribute episodes of care, in 

8 whole or in part, to physicians; 

9 ‘‘(ii) identify appropriate physicians 

10 for purposes of comparison under subpara11 graph (B); and 

12 ‘‘(iii) aggregate episodes of care at13 tributed to a physician under clause (i) 

14 into a composite measure per individual. 

15 ‘‘(D) DATA ADJUSTMENT.—In preparing 

16 reports under this paragraph, the Secretary 

17 shall make appropriate adjustments, including 

18 adjustments— 

19 ‘‘(i) to account for differences in 

20 socio-economic and demographic character21 istics, ethnicity, and health status of indi22 viduals (such as to recognize that less 

23 healthy individuals may require more in24 tensive interventions); and 


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1 ‘‘(ii) to eliminate the effect of geo2 graphic adjustments in payment rates (as 

3 described in subsection (e)). 

4 ‘‘(E) PUBLIC AVAILABILITY OF METHOD5 OLOGY.—The Secretary shall make available to 

6 the public— 

7 ‘‘(i) the methodologies established 

8 under subparagraph (C); 

9 ‘‘(ii) information regarding any ad10 justments made to data under subpara11 graph (D); and 

12 ‘‘(iii) aggregate reports with respect 

13 to physicians. 

14 ‘‘(F) DEFINITION OF PHYSICIAN.—In this 

15 paragraph: 

16 ‘‘(i) IN GENERAL.—The term ‘physi17 cian’ has the meaning given that term in 

18 section 1861(r)(1). 

19 ‘‘(ii) TREATMENT OF GROUPS.—Such 

20 term includes, as the Secretary determines 

21 appropriate, a group of physicians. 

22 ‘‘(G) LIMITATIONS ON REVIEW.—There 

23 shall be no administrative or judicial review 

24 under section 1869, section 1878, or otherwise 

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1 odology under subparagraph (C), including the 

2 determination of an episode of care under such 

3 methodology. 

4 ‘‘(10) COORDINATION WITH OTHER VALUE5 BASED PURCHASING REFORMS.—The Secretary shall 

6 coordinate the Program with the value-based pay7 ment modifier established under subsection (p) and, 

8 as the Secretary determines appropriate, other simi9 lar provisions of this title.’’. 

10 (2) CONFORMING AMENDMENT.—Section 

11 1890(b) of the Social Security Act (42 U.S.C. 

12 1395aaa(b)) is amended by adding at the end the 

13 following new paragraph: 

14 ‘‘(6) REVIEW AND ENDORSEMENT OF EPISODE

15 GROUPER UNDER THE PHYSICIAN FEEDBACK PRO16 GRAM.—The entity shall provide for the review and, 

17 as appropriate, the endorsement of the episode 

18 grouper developed by the Secretary under section 

19 1848(n)(9)(A). Such review shall be conducted on an 

20 expedited basis.’’. 

21 (b) INCENTIVES FOR AVOIDING EXCESS UTILIZA22 TION.—Section 1848(a) of the Social Security Act (42 

23 U.S.C. 1395w–4(a)), as amended by section 3002(b), is 

24 amended by adding at the end the following new para25 graph: 


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1 ‘‘(9) INCENTIVE FOR AVOIDING EXCESS UTILI2 ZATION.— 

3 ‘‘(A) IN GENERAL.—With respect to physi4 cians’ services furnished by an applicable physi5 cian on or after January 1, 2014, the fee sched6 ule amount for such services furnished by the 

7 applicable physician during the year (including 

8 the fee schedule amount for purposes of deter9 mining a payment based on such amount) shall 

10 be 95 percent of the fee schedule amount that 

11 would otherwise apply to such services under 

12 this subsection (determined after application of 

13 paragraphs (3), (5), (7), and (8), but without 

14 regard to this paragraph). 

15 ‘‘(B) APPLICABLE PHYSICIAN.—In this 

16 paragraph: 

17 ‘‘(i) IN GENERAL.—The term ‘applica18 ble physician’ means a physician which the 

19 Secretary determines is at or above the 

20 90th percentile of resource use (or, if ap21 plicable, the standard measure of utiliza22 tion specified under subparagraph (C)) 

23 with respect to a composite measure per 

24 individual, such as the composite measure 


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1 under the methodology established under 

2 subsection (n)(9)(C)(iii). 

3 ‘‘(ii) DEFINITION OF PHYSICIAN.—In 

4 this paragraph: 

5 ‘‘(I) IN GENERAL.—The term 

6 ‘physician’ has the meaning given that 

7 term in section 1861(r)(1). 

8 ‘‘(II) TREATMENT OF GROUPS.— 

9 Such term includes, as the Secretary 

10 determines appropriate, a group of 

11 physicians. 

12 ‘‘(C) AUTHORITY TO REVISE STANDARD

13 MEASURE OF RESOURCE USE FOR DETER14 MINING APPLICABLE PHYSICIANS.—With re15 spect to physicians’ services furnished by an ap16 plicable physician on or after January 1, 2020, 

17 the Secretary may substitute a standard meas18 ure of resource use, such as deviation from the 

19 national mean, (as specified by the Secretary) 

20 for the percentile of resource use described in 

21 subparagraph (B)(i). 

22 ‘‘(D) REPORTING PERIOD.—In this para23 graph, the term ‘reporting period’ means a pe24 riod specified by the Secretary. 


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1 ‘‘(E) LIMITATIONS ON REVIEW.—There 

2 shall be no administrative or judicial review 

3 under section 1869, section 1878, or otherwise 

4 or otherwise of— 

5 ‘‘(i) the determination of any incentive 

6 payment under subparagraph (A); 

7 ‘‘(ii) the determination of who is an 

8 applicable physician under subparagraph 

9 (B)(i), including the specification and ap10 plication of the standard measure of utili11 zation under subparagraph (C); and 

12 ‘‘(iii) the specification of the reporting 

13 period under subparagraph (D).’’. 

14 SEC. 3004. QUALITY REPORTING FOR LONG-TERM CARE 

15 HOSPITALS, INPATIENT REHABILITATION 

16 HOSPITALS, AND HOSPICE PROGRAMS. 

17 (a) LONG-TERM CARE HOSPITALS.—Section 

18 1886(m) of the Social Security Act (42 U. S.C. 

19 1395ww(m)), as amended by section 3401(c), is amended 

20 by adding at the end the following new paragraph: 

21 ‘‘(5) QUALITY REPORTING.— 

22 ‘‘(A) REDUCTION IN UPDATE FOR FAILURE

23 TO REPORT.—Under the system described in 

24 paragraph (1), for rate year 2014 and each 

25 subsequent rate year, in the case of a long-term 


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1 care hospital that does not submit data to the 

2 Secretary in accordance with subparagraph (C) 

3 with respect to such a rate year, the update for 

4 payments for discharges occurring during such 

5 rate year shall be reduced by 2 percentage 

6 points. 

7 ‘‘(B) NONCUMULATIVE APPLICATION.— 

8 Any reduction under subparagraph (A) shall 

9 apply only with respect to the rate year involved 

10 and the Secretary shall not take into account 

11 such reduction in computing the payment 

12 amount under the system described in para13 graph (1) for a subsequent rate year. 

14 ‘‘(C) SUBMISSION OF QUALITY DATA.—For 

15 rate year 2014 and each subsequent rate year, 

16 each long-term care hospital shall submit to the 

17 Secretary data on quality measures specified 

18 under subparagraph (D). Such data shall be 

19 submitted in a form and manner, and at a time, 

20 specified by the Secretary for purposes of this 

21 subparagraph. 

22 ‘‘(D) QUALITY MEASURES.— 

23 ‘‘(i) IN GENERAL.—The quality meas24 ures specified under this subparagraph 

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1 retary from measures that have been en2 dorsed under paragraph (1) of section 

3 1890C(f) or used as a result of a deter4 mination under paragraph (2) of such sec5 tion. 

6 ‘‘(ii) TIME FRAME.—Not later than 

7 October 1, 2012, the Secretary shall pub8 lish the measures selected under this sub9 paragraph that will be applicable with re10 spect to rate year 2014. 

11 ‘‘(E) PUBLIC AVAILABILITY OF DATA SUB12 MITTED.—The Secretary shall establish proce13 dures for making data submitted under sub14 paragraph (C) available to the public. Such pro15 cedures shall ensure that a long-term care hos16 pital has the opportunity to review the data 

17 that is to be made public with respect to the 

18 hospital prior to such data being made public. 

19 The Secretary shall report quality measures 

20 that relate to services furnished in inpatient 

21 settings in long-term care hospitals on the 

22 Internet website of the Centers for Medicare & 

23 Medicaid Services.’’. 


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1 (b) INPATIENT REHABILITATION HOSPITALS.—Sec2 tion 1886(j) of the Social Security Act (42 U.S.C. 

3 1395ww(j)) is amended— 

4 (1) by redesignating paragraph (7) as para5 graph (8); and 

6 (2) by inserting after paragraph (6) the fol7 lowing new paragraph: 

8 ‘‘(7) QUALITY REPORTING.— 

9 ‘‘(A) REDUCTION IN UPDATE FOR FAILURE

10 TO REPORT.—For purposes of fiscal year 2014 

11 and each subsequent fiscal year, in the case of 

12 a rehabilitation facility that does not submit 

13 data to the Secretary in accordance with sub14 paragraph (C) with respect to such a fiscal 

15 year, the increase factor to be applied under 

16 paragraph (3)(C) for payments for discharges 

17 occurring during such fiscal year shall be re18 duced by 2 percentage points. 

19 ‘‘(B) NONCUMULATIVE APPLICATION.— 

20 Any reduction under subparagraph (A) shall 

21 apply only with respect to the fiscal year in22 volved and the Secretary shall not take into ac23 count such reduction in computing the payment 

24 amount under this subsection for a subsequent 

25 fiscal year. 


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1 ‘‘(C) SUBMISSION OF QUALITY DATA.—For 

2 fiscal year 2014 and each subsequent rate year, 

3 each rehabilitation facility shall submit to the 

4 Secretary data on quality measures specified 

5 under subparagraph (D). Such data shall be 

6 submitted in a form and manner, and at a time, 

7 specified by the Secretary for purposes of this 

8 subparagraph. 

9 ‘‘(D) QUALITY MEASURES.— 

10 ‘‘(i) IN GENERAL.—The quality meas11 ures specified under this subparagraph 

12 shall be such measures selected by the Sec13 retary from measures that have been en14 dorsed under paragraph (1) of section 

15 1890C(f) or used as a result of a deter16 mination under paragraph (2) of such sec17 tion. 

18 ‘‘(ii) TIME FRAME.—Not later than 

19 October 1, 2012, the Secretary shall pub20 lish the measures selected under this sub21 paragraph that will be applicable with re22 spect to fiscal year 2014. 

23 ‘‘(E) PUBLIC AVAILABILITY OF DATA SUB24 MITTED.—The Secretary shall establish proce25 dures for making data submitted under subVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00689 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 paragraph (C) available to the public. Such pro2 cedures shall ensure that a rehabilitation facil3 ity has the opportunity to review the data that 

4 is to be made public with respect to the facility 

5 prior to such data being made public. The Sec6 retary shall report quality measures that relate 

7 to services furnished in inpatient settings in re8 habilitation facilities on the Internet website of 

9 the Centers for Medicare & Medicaid Services.’’. 

10 (c) HOSPICE PROGRAMS.—Section 1814(i) of the So11 cial Security Act (42 U.S.C. 1395f(i)) is amended— 

12 (1) by redesignating paragraph (5) as para13 graph (6); and 

14 (2) by inserting after paragraph (4) the fol15 lowing new paragraph: 

16 ‘‘(5) QUALITY REPORTING.— 

17 ‘‘(A) REDUCTION IN UPDATE FOR FAILURE

18 TO REPORT.—For purposes of fiscal year 2014 

19 and each subsequent fiscal year, in the case of 

20 a hospice program that does not submit data to 

21 the Secretary in accordance with subparagraph 

22 (C) with respect to such a fiscal year, the mar23 ket basket percentage increase to be applied 

24 under clause (ii) or (iii) of paragraph (1)(C), as 

25 applicable, for payments for routine home care 


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1 and other services included in hospice care fur2 nished during such fiscal year shall be reduced 

3 by 2 percentage points. 

4 ‘‘(B) NONCUMULATIVE APPLICATION.— 

5 Any reduction under subparagraph (A) shall 

6 apply only with respect to the fiscal year in7 volved and the Secretary shall not take into ac8 count such reduction in computing the payment 

9 amount under this subsection for a subsequent 

10 fiscal year. 

11 ‘‘(C) SUBMISSION OF QUALITY DATA.—For 

12 fiscal year 2014 and each subsequent fiscal 

13 year, each hospice program shall submit to the 

14 Secretary data on quality measures specified 

15 under subparagraph (D). Such data shall be 

16 submitted in a form and manner, and at a time, 

17 specified by the Secretary for purposes of this 

18 subparagraph. 

19 ‘‘(D) QUALITY MEASURES.— 

20 ‘‘(i) IN GENERAL.—The quality meas21 ures specified under this subparagraph 

22 shall be such measures selected by the Sec23 retary from measures that have been en24 dorsed under paragraph (1) of section 

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1 mination under paragraph (2) of such sec2 tion. 

3 ‘‘(ii) TIME FRAME.—Not later than 

4 October 1, 2012, the Secretary shall pub5 lish the measures selected under this sub6 paragraph that will be applicable with re7 spect to fiscal year 2014. 

8 ‘‘(E) PUBLIC AVAILABILITY OF DATA SUB9 MITTED.—The Secretary shall establish proce10 dures for making data submitted under sub11 paragraph (C) available to the public. Such pro12 cedures shall ensure that a hospice program has 

13 the opportunity to review the data that is to be 

14 made public with respect to the hospice pro15 gram prior to such data being made public. The 

16 Secretary shall report quality measures that re17 late to hospice care provided by hospice pro18 grams on the Internet website of the Centers 

19 for Medicare & Medicaid Services.’’. 

20 SEC. 3005. QUALITY REPORTING FOR PPS-EXEMPT CANCER 

21 HOSPITALS. 

22 Section 1866 of the Social Security Act (42 U.S.C. 

23 1395cc) is amended— 

24 (1) in subsection (a)(1)— 


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1 (A) in subparagraph (U), by striking 

2 ‘‘and’’ at the end; 

3 (B) in subparagraph (V), by striking the 

4 period at the end and inserting ‘‘, and’’; and 

5 (C) by adding at the end the following new 

6 subparagraph: 

7 ‘‘(W) in the case of a hospital described in 

8 section 1886(d)(1)(B)(v), to report quality data 

9 to the Secretary in accordance with subsection 

10 (k).’’; and 

11 (2) by adding at the end the following new sub12 section: 

13 ‘‘(k) QUALITY REPORTING BY CANCER HOS14 PITALS.— 

15 ‘‘(1) IN GENERAL.—For purposes of fiscal year 

16 2014 and each subsequent fiscal year, a hospital de17 scribed in section 1886(d)(1)(B)(v) shall submit 

18 data to the Secretary in accordance with paragraph 

19 (2) with respect to such a fiscal year. 

20 ‘‘(2) SUBMISSION OF QUALITY DATA.—For fis21 cal year 2014 and each subsequent fiscal year, each 

22 hospital described in such section shall submit to the 

23 Secretary data on quality measures specified under 

24 paragraph (3). Such data shall be submitted in a 


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1 form and manner, and at a time, specified by the 

2 Secretary for purposes of this subparagraph. 

3 ‘‘(3) QUALITY MEASURES.— 

4 ‘‘(A) IN GENERAL.—The quality measures 

5 specified under this subparagraph shall be such 

6 measures selected by the Secretary from meas7 ures that have been endorsed under paragraph 

8 (1) of section 1890C(f) or used as a result of 

9 a determination under paragraph (2) of such 

10 section. 

11 ‘‘(C) TIME FRAME.—Not later than Octo12 ber 1, 2012, the Secretary shall publish the 

13 measures selected under this paragraph that 

14 will be applicable with respect to fiscal year 

15 2014. 

16 ‘‘(4) PUBLIC AVAILABILITY OF DATA SUB17 MITTED.—The Secretary shall establish procedures 

18 for making data submitted under paragraph (4) 

19 available to the public. Such procedures shall ensure 

20 that a hospital described in section 1886(d)(1)(B)(v) 

21 has the opportunity to review the data that is to be 

22 made public with respect to the hospital prior to 

23 such data being made public. The Secretary shall re24 port quality measures of process, structure, outcome, 

25 patients’ perspective on care, efficiency, and costs of 


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1 care that relate to services furnished in such hos2 pitals on the Internet website of the Centers for 

3 Medicare & Medicaid Services.’’. 

4 SEC. 3006. PLANS FOR A VALUE-BASED PURCHASING PRO5 GRAM FOR SKILLED NURSING FACILITIES 

6 AND HOME HEALTH AGENCIES. 

7 (a) SKILLED NURSING FACILITIES.— 

8 (1) IN GENERAL.—The Secretary of Health and 

9 Human Services (in this section referred to as the 

10 ‘‘Secretary’’) shall develop a plan to implement a 

11 value-based purchasing program for payments under 

12 the Medicare program under title XVIII of the So13 cial Security Act for skilled nursing facilities (as de14 fined in section 1819(a) of such Act (42 U.S.C. 

15 1395i–3(a))). 

16 (2) DETAILS.—In developing the plan under 

17 paragraph (1), the Secretary shall consider the fol18 lowing issues: 

19 (A) The ongoing development, selection, 

20 and modification process for measures (as se21 lected from measures that are endorsed under 

22 paragraph (1) of section 1890C(f) or used as a 

23 result of a determination under paragraph (2) 

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1 ticable, of all dimensions of quality and effi2 ciency in skilled nursing facilities. 

3 (B) The reporting, collection, and valida4 tion of quality data. 

5 (C) The structure of value-based payment 

6 adjustments, including the determination of 

7 thresholds or improvements in quality that 

8 would substantiate a payment adjustment, the 

9 size of such payments, and the sources of fund10 ing for the value-based bonus payments. 

11 (D) Methods for the public disclosure of 

12 information on the performance of skilled nurs13 ing facilities. 

14 (E) Any other issues determined appro15 priate by the Secretary. 

16 (3) CONSULTATION.—In developing the plan 

17 under paragraph (1), the Secretary shall— 

18 (A) consult with relevant affected parties; 

19 and 

20 (B) consider experience with such dem21 onstrations that the Secretary determines are 

22 relevant to the value-based purchasing program 

23 described in paragraph (1). 

24 (4) REPORT TO CONGRESS.—Not later than Oc25 tober 1, 2011, the Secretary shall submit to ConVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00696 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 gress a report containing the plan developed under 

2 paragraph (1). 

3 (b) HOME HEALTH AGENCIES.— 

4 (1) IN GENERAL.—The Secretary of Health and 

5 Human Services (in this section referred to as the 

6 ‘‘Secretary’’) shall develop a plan to implement a 

7 value-based purchasing program for payments under 

8 the Medicare program under title XVIII of the So9 cial Security Act for home health agencies (as de10 fined in section 1861(o) of such Act (42 U.S.C. 

11 1395x(o))). 

12 (2) DETAILS.—In developing the plan under 

13 paragraph (1), the Secretary shall consider the fol14 lowing issues: 

15 (A) The ongoing development, selection, 

16 and modification process for measures (as se17 lected from measures that are endorsed under 

18 paragraph (1) of section 1890C(f) or used as a 

19 result of a determination under paragraph (2) 

20 of such section), to the extent feasible and prac21 ticable, of all dimensions of quality and effi22 ciency in home health agencies. 

23 (B) The reporting, collection, and valida24 tion of quality data. 


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1 (C) The structure of value-based payment 

2 adjustments, including the determination of 

3 thresholds or improvements in quality that 

4 would substantiate a payment adjustment, the 

5 size of such payments, and the sources of fund6 ing for the value-based bonus payments. 

7 (D) Methods for the public disclosure of 

8 information on the performance of home health 

9 agencies. 

10 (E) Any other issues determined appro11 priate by the Secretary. 

12 (3) CONSULTATION.—In developing the plan 

13 under paragraph (1), the Secretary shall— 

14 (A) consult with relevant affected parties; 

15 and 

16 (B) consider experience with such dem17 onstrations that the Secretary determines are 

18 relevant to the value-based purchasing program 

19 described in paragraph (1). 

20 (4) REPORT TO CONGRESS.—Not later than Oc21 tober 1, 2010, the Secretary shall submit to Con22 gress a report containing the plan developed under 

23 paragraph (1). 


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1 SEC. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE 

2 PHYSICIAN FEE SCHEDULE. 

3 Section 1848 of the Social Security Act (42 U.S.C. 

4 1395w–4) is amended— 

5 (1) in subsection (b)(1), by inserting ‘‘subject 

6 to subsection (p),’’ after ‘‘1998,’’. 

7 (2) by adding at the end the following new sub8 section: 

9 ‘‘(p) ESTABLISHMENT OF VALUE-BASED PAYMENT

10 MODIFIER.— 

11 ‘‘(1) IN GENERAL.—The Secretary shall estab12 lish a payment modifier that provides for differential 

13 payment to a physician or a group of physicians 

14 under the fee schedule established under subsection 

15 (b) based upon the quality of care furnished com16 pared to cost (as determined under paragraphs (2) 

17 and (3), respectively) during a performance period. 

18 Such payment modifier shall be separate from the 

19 geographic adjustment factors established under 

20 subsection (e). 

21 ‘‘(2) QUALITY.— 

22 ‘‘(A) IN GENERAL.—For purposes of para23 graph (1), quality of care shall be evaluated, to 

24 the extent practicable, based on a composite of 

25 measures of the quality of care furnished (as 


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1 established by the Secretary under subpara2 graph (B)). 

3 ‘‘(B) MEASURES.— 

4 ‘‘(i) The Secretary shall establish ap5 propriate measures of the quality of care 

6 furnished by a physician or group of physi7 cians to individuals enrolled under this 

8 part, such as measures that reflect health 

9 outcomes. Such measures shall be risk ad10 justed as determined appropriate by the 

11 Secretary. 

12 ‘‘(ii) The Secretary shall seek endorse13 ment of the measures established under 

14 this subparagraph by the entity with a 

15 contract under section 1890(a). 

16 ‘‘(3) COSTS.—For purposes of paragraph (1), 

17 costs shall be evaluated, to the extent practicable, 

18 based on a composite of appropriate measures of 

19 costs established by the Secretary (such as the com20 posite measure under the methodology established 

21 under subsection (n)(9)(C)(iii)) that eliminate the 

22 effect of geographic adjustments in payment rates 

23 (as described in subsection (e)), and take into ac24 count risk factors (such as socio-economic and demo25 graphic characteristics, ethnicity, and health status 


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1 of individuals (such as to recognize that less healthy 

2 individuals may require more intensive interventions) 

3 and other factors determined appropriate by the 

4 Secretary. 

5 ‘‘(4) IMPLEMENTATION.— 

6 ‘‘(A) PUBLICATION OF MEASURES, DATES

7 OF IMPLEMENTATION, PERFORMANCE PE8 RIOD.—Not later than January 1, 2012, the 

9 Secretary shall publish the following: 

10 ‘‘(i) The measures of quality of care 

11 and costs established under paragraphs (2) 

12 and (3), respectively. 

13 ‘‘(ii) The dates for implementation of 

14 the payment modifier (as determined under 

15 subparagraph (B)). 

16 ‘‘(iii) The initial performance period 

17 (as specified under subparagraph (B)(ii)). 

18 ‘‘(B) DEADLINES FOR IMPLEMENTA19 TION.— 

20 ‘‘(i) INITIAL IMPLEMENTATION.—Sub21 ject to the preceding provisions of this sub22 paragraph, the Secretary shall begin imple23 menting the payment modifier established 

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1 cian fee schedule established under sub2 section (b). 

3 ‘‘(ii) INITIAL PERFORMANCE PE4 RIOD.— 

5 ‘‘(I) IN GENERAL.—The Sec6 retary shall specify an initial perform7 ance period for application of the pay8 ment modifier established under this 

9 subsection with respect to 2015. 

10 ‘‘(II) PROVISION OF INFORMA11 TION DURING INITIAL PERFORMANCE

12 PERIOD.—During the initial perform13 ance period, the Secretary shall, to 

14 the extent practicable, provide infor15 mation to physicians and groups of 

16 physicians about the quality of care 

17 furnished by the physician or group of 

18 physicians to individuals enrolled 

19 under this part compared to cost (as 

20 determined under paragraphs (2) and 

21 (3), respectively) with respect to the 

22 performance period. 

23 ‘‘(iii) APPLICATION.—The Secretary 

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1 lished under this subsection for items and 

2 services furnished— 

3 ‘‘(I) beginning on January 1, 

4 2015, with respect to specific physi5 cians and groups of physicians the 

6 Secretary determines appropriate; and 

7 ‘‘(II) beginning not later than 

8 January 1, 2017, with respect to all 

9 physicians and groups of physicians. 

10 ‘‘(C) BUDGET NEUTRALITY.—The pay11 ment modifier established under this subsection 

12 shall be implemented in a budget neutral man13 ner. 

14 ‘‘(5) SYSTEMS-BASED CARE.—The Secretary 

15 shall, as appropriate, apply the payment modifier es16 tablished under this subsection in a manner that 

17 promotes systems-based care. 

18 ‘‘(6) CONSIDERATION OF SPECIAL CIR19 CUMSTANCES OF CERTAIN PROVIDERS.—In applying 

20 the payment modifier under this subsection, the Sec21 retary shall, as appropriate, take into account the 

22 special circumstances of physicians or groups of phy23 sicians in rural areas and other underserved commu24 nities. 


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1 ‘‘(7) APPLICATION.—For purposes of the initial 

2 application of the payment modifier established 

3 under this subsection during the period beginning on 

4 January 1, 2015, and ending on December 31, 

5 2016, the term ‘physician’ has the meaning given 

6 such term in section 1861(r). On or after January 

7 1, 2017, the Secretary may apply this subsection to 

8 eligible professionals (as defined in subsection 

9 (k)(3)(B)) as the Secretary determines appropriate. 

10 ‘‘(8) DEFINITIONS.—For purposes of this sub11 section: 

12 ‘‘(A) COSTS.—The term ‘costs’ means ex13 penditures per individual as determined appro14 priate by the Secretary. In making the deter15 mination under the preceding sentence, the Sec16 retary may take into account the amount of 

17 growth in expenditures per individual for a phy18 sician compared to the amount of such growth 

19 for other physicians. 

20 ‘‘(B) PERFORMANCE PERIOD.—The term 

21 ‘performance period’ means a period specified 

22 by the Secretary. 

23 ‘‘(9) COORDINATION WITH OTHER VALUE24 BASED PURCHASING REFORMS.—The Secretary shall 

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1 lished under this subsection with the Physician 

2 Feedback Program under subsection (n) and, as the 

3 Secretary determines appropriate, other similar pro4 visions of this title. 

5 ‘‘(10) LIMITATIONS ON REVIEW.—There shall 

6 be no administrative or judicial review under section 

7 1869, section 1878, or otherwise or otherwise of— 

8 ‘‘(A) the establishment of the value-based 

9 payment modifier under this subsection; 

10 ‘‘(B) the evaluation of quality of care 

11 under paragraph (2), including the establish12 ment of appropriate measures of the quality of 

13 care under paragraph (2)(B); 

14 ‘‘(C) the evaluation of costs under para15 graph (3), including the establishment of appro16 priate measures of costs under such paragraph; 

17 ‘‘(D) the dates for implementation of the 

18 value-based payment modifier; 

19 ‘‘(E) the specification of the initial per20 formance period and any other performance pe21 riod under paragraphs (4)(B)(ii) and (8)(B), 

22 respectively; 

23 ‘‘(F) the application of the value-based 

24 payment modifier under paragraph (7); and 


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1 ‘‘(G) the determination of costs under 

2 paragraph (8)(A).’’. 

3 SEC. 3008. PAYMENT ADJUSTMENT FOR CONDITIONS AC4 QUIRED IN HOSPITALS. 

5 Section 1886 of the Social Security Act (42 U.S.C. 

6 1395ww), as amended by section 3001, is amended by 

7 adding at the end the following new subsection: 

8 ‘‘(p) ADJUSTMENT TO HOSPITAL PAYMENTS FOR

9 HOSPITAL ACQUIRED CONDITIONS.— 

10 ‘‘(1) IN GENERAL.—In order to provide an in11 centive for applicable hospitals to reduce hospital ac12 quired conditions under this title, with respect to 

13 discharges from an applicable hospital occurring 

14 during fiscal year 2015 or a subsequent fiscal year, 

15 the amount of payment under this section or section 

16 1814(b)(3), as applicable, for such discharges during 

17 the fiscal year shall be equal to 99 percent of the 

18 amount of payment that would otherwise apply to 

19 such discharges under this section or section 

20 1814(b)(3) (determined after the application of sub21 sections (n), (o), and (q) and section 1814(l)(3) but 

22 without regard to this subsection). 

23 ‘‘(2) APPLICABLE HOSPITALS.— 

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

25 subsection, the term ‘applicable hospital’ means 


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1 a subsection (d) hospital that meets the criteria 

2 described in subparagraph (B). 

3 ‘‘(B) CRITERIA DESCRIBED.— 

4 ‘‘(i) IN GENERAL.—The criteria de5 scribed in this subparagraph, with respect 

6 to a subsection (d) hospital, is that the 

7 subsection (d) hospital is in the top quar8 tile of all subsection (d) hospitals, relative 

9 to the national average, of hospital ac10 quired conditions during the applicable pe11 riod, as determined by the Secretary. 

12 ‘‘(ii) RISK ADJUSTMENT.—In carrying 

13 out clause (i), the Secretary shall establish 

14 and apply an appropriate risk adjustment 

15 methodology. 

16 ‘‘(3) HOSPITAL ACQUIRED CONDITIONS.—For 

17 purposes of this subsection, the term ‘hospital ac18 quired condition’ means a condition identified for 

19 purposes of subsection (d)(4)(D)(iv) that an indi20 vidual acquires during a stay in an applicable hos21 pital, as determined by the Secretary. 

22 ‘‘(4) APPLICABLE PERIOD.—In this subsection, 

23 the term ‘applicable period’ means, with respect to 

24 a fiscal year, a period specified by the Secretary. 


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1 ‘‘(5) REPORTING TO HOSPITALS.—Prior to fis2 cal year 2015 and each subsequent fiscal year, the 

3 Secretary shall provide confidential reports to appli4 cable hospitals with respect to hospital acquired con5 ditions of the applicable hospital during the applica6 ble period. 

7 ‘‘(6) REPORTING HOSPITAL SPECIFIC INFORMA8 TION.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall 

10 make information available to the public re11 garding hospital acquired conditions of each ap12 plicable hospital. 

13 ‘‘(B) OPPORTUNITY TO REVIEW AND SUB14 MIT CORRECTIONS.—The Secretary shall ensure 

15 that an applicable hospital has the opportunity 

16 to review, and submit corrections for, the infor17 mation to be made public with respect to the 

18 hospital under subparagraph (A) prior to such 

19 information being made public. 

20 ‘‘(C) WEBSITE.—Such information shall be 

21 posted on the Hospital Compare Internet 

22 website in an easily understandable format. 

23 ‘‘(7) LIMITATIONS ON REVIEW.—There shall be 

24 no administrative or judicial review under section 

25 1869, section 1878, or otherwise of the following: 


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1 ‘‘(A) The criteria described in paragraph 

2 (2)(A). 

3 ‘‘(B) The specification of hospital acquired 

4 conditions under paragraph (3). 

5 ‘‘(C) The specification of the applicable pe6 riod under paragraph (4). 

7 ‘‘(D) The provision of reports to applicable 

8 hospitals under paragraph (5) and the informa9 tion made available to the public under para10 graph (6)’’. 

11 PART II—STRENGTHENING THE QUALITY 

12 INFRASTRUCTURE 

13 SEC. 3011. NATIONAL STRATEGY. 

14 Title XVIII of the Social Security Act (42 U.S.C. 

15 1395 et seq.) is amended by inserting after section 1890 

16 the following new section: 

17 ‘‘NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN

18 HEALTH CARE

19 ‘‘SEC. 1890A. (a) ESTABLISHMENT OF NATIONAL

20 STRATEGY AND PRIORITIES.— 

21 ‘‘(1) NATIONAL STRATEGY.—The Secretary, 

22 through a transparent collaborative process, shall es23 tablish a national strategy to improve the delivery of 

24 health care services, patient health outcomes, and 

25 population health. 

26 ‘‘(2) IDENTIFICATION OF PRIORITIES.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 identify national priorities for improvement in 

3 developing the strategy under paragraph (1). 

4 ‘‘(B) REQUIREMENTS.—The Secretary 

5 shall ensure that priorities identified under sub6 paragraph (A) will— 

7 ‘‘(i) have the greatest potential for im8 proving the health outcomes, efficiency, 

9 and patient-centeredness of health care; 

10 ‘‘(ii) identify areas in the delivery of 

11 health care services that have the potential 

12 for rapid improvement in the quality and 

13 efficiency of patient care; 

14 ‘‘(iii) address gaps in quality , effi15 ciency, and health outcomes measures and 

16 data aggregation techniques; 

17 ‘‘(iv) improve Federal payment policy 

18 to emphasize quality and efficiency; 

19 ‘‘(v) enhance the use of health care 

20 data to improve quality, efficiency, trans21 parency, and outcomes; 

22 ‘‘(vi) address the health care provided 

23 to patients with high-cost chronic diseases; 

24 ‘‘(vii) improve strategies and best 

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1 duce medical errors, preventable admis2 sions and readmissions, and health care-as3 sociated infections; 

4 ‘‘(viii) reduce health disparities across 

5 health disparity populations (as defined by 

6 section 485E of the Public Health Service 

7 Act) and geographic areas; and 

8 ‘‘(ix) address other areas as deter9 mined appropriate by the Secretary. 

10 ‘‘(C) CONSIDERATIONS.—In identifying 

11 priorities under subparagraph (A), the Sec12 retary shall take into consideration— 

13 ‘‘(i) the recommendations submitted 

14 by qualified consensus-based entities as re15 quired under section 1890C; and 

16 ‘‘(ii) the recommendations of the 

17 Interagency Working Group on Health 

18 Care Quality established under section 

19 3012 of the America’s Healthy Future Act 

20 of 2009. 

21 ‘‘(b) STRATEGIC PLAN.— 

22 ‘‘(1) IN GENERAL.—The national strategy shall 

23 include a comprehensive strategic plan to achieve the 

24 priorities described in subsection (a). 


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1 ‘‘(2) REQUIREMENTS.—The strategic plan shall 

2 include provisions for addressing, at a minimum, the 

3 following: 

4 ‘‘(A) Coordination among agencies within 

5 the Department, which shall include steps to 

6 minimize duplication of efforts and utilization 

7 of common quality measures, where available. 

8 Such common quality measures shall be meas9 ures endorsed under section 1890C. 

10 ‘‘(B) Agency-specific strategic plans to 

11 achieve national priorities. 

12 ‘‘(C) Establishment of annual benchmarks 

13 for each relevant agency to achieve national pri14 orities. 

15 ‘‘(D) A process for regular reporting by 

16 the agencies to the Secretary on the implemen17 tation of the strategic plan. 

18 ‘‘(E) Strategies to align incentives among 

19 public and private payers with regard to quality 

20 and patient safety efforts. 

21 ‘‘(F) Incorporating quality improvement 

22 and measurement in the strategic plan for 

23 health information technology required by the 

24 American Recovery and Reinvestment Act of 

25 2009 (Public Law 111–5). 


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1 ‘‘(c) PERIODIC UPDATE OF NATIONAL STRATEGY.— 

2 The Secretary shall update the national strategy not less 

3 than triennially. Any such update shall include a review 

4 of short- and long-term goals. 

5 ‘‘(d) SUBMISSION AND AVAILABILITY OF NATIONAL

6 STRATEGY AND UPDATES.— 

7 ‘‘(1) DEADLINE FOR INITIAL SUBMISSION OF

8 NATIONAL STRATEGY.—Not later than December 31, 

9 2010, the Secretary shall submit to the relevant 

10 Committees of Congress the national strategy. 

11 ‘‘(2) UPDATES.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 submit to the relevant Committees of Congress 

14 any updates to such strategy. 

15 ‘‘(B) INFORMATION SUBMITTED.—Any up16 date submitted under subparagraph (A) shall 

17 include— 

18 ‘‘(i) a review of the short and long19 term goals of the national strategy; and 

20 ‘‘(ii) an analysis of the progress made 

21 in meeting those goals. 

22 ‘‘(e) HEALTH CARE QUALITY WEBSITE.—The Sec23 retary shall create an Internet website to make public in24 formation regarding— 


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1 ‘‘(1) the national priorities for health care qual2 ity improvement established under subsection (a)(2); 

3 ‘‘(2) the agency-specific strategic plans for 

4 health care quality described in subsection (b)(2)(B); 

5 and 

6 ‘‘(3) other information, as the Secretary deter7 mines to be appropriate.’’. 

8 SEC. 3012. INTERAGENCY WORKING GROUP ON HEALTH 

9 CARE QUALITY. 

10 (a) IN GENERAL.—The President shall convene a 

11 working group to be known as the Interagency Working 

12 Group on Health Care Quality (referred to in this section 

13 as the ‘‘Working Group’’). 

14 (b) GOALS.—The goals of the Working Group shall 

15 be to achieve the following: 

16 (1) Collaboration, cooperation, and consultation 

17 between Federal departments and agencies with re18 spect to developing and disseminating strategies, 

19 goals, models, and timetables that are consistent 

20 with the national priorities identified under section 

21 1890A of the Social Security Act (as added by sec22 tion 3011). 

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1 ticable, and a streamlined process for quality report2 ing and compliance requirements. 

3 (c) COMPOSITION.— 

4 (1) IN GENERAL.—The Working Group shall be 

5 composed of senior level representatives of— 

6 (A) the Department of Health and Human 

7 Services; 

8 (B) the Centers for Medicare & Medicaid 

9 Services; 

10 (C) the National Institutes of Health; 

11 (D) the Centers for Disease Control and 

12 Prevention; 

13 (E) the Food and Drug Administration; 

14 (F) the Health Resources and Services Ad15 ministration; 

16 (G) the Agency for Healthcare Research 

17 and Quality; 

18 (H) the Administration for Children and 

19 Families; 

20 (I) the Department of Commerce; 

21 (J) the Office of Management and Budget; 

22 (K) the United States Coast Guard; 

23 (L) the Federal Bureau of Prisons; 

24 (M) the National Highway Traffic Safety 

25 Administration; 


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1 (N) the Federal Trade Commission; 

2 (O) the Social Security Administration; 

3 (P) the Department of Labor; 

4 (Q) the United States Office of Personnel 

5 Management; 

6 (R) the Department of Defense; 

7 (S) the Department of Education; 

8 (T) the Department of Veterans Affairs; 

9 (U) the Veterans Health Administration; 

10 and 

11 (V) any other Federal agencies and depart12 ments with activities relating to improving 

13 health care quality and safety, as determined by 

14 the President. 

15 (2) CHAIR AND VICE CHAIR.— 

16 (A) CHAIR.—The Working Group shall be 

17 chaired by the Secretary of Health and Human 

18 Services. 

19 (B) VICE CHAIR.—Members of the Work20 ing Group, other than the Secretary of Health 

21 and Human Services, shall serve as Vice Chair 

22 of the Group on a rotating basis, as determined 

23 by the Group. 

24 (d) REPORT TO CONGRESS.—Not later than a date 

25 determined appropriate by the Secretary, and annually 


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1 thereafter, the Working Group shall submit to the relevant 

2 Committees of Congress, and make public on an Internet 

3 website, a report describing the progress and recommenda4 tions of the Working Group in meeting the goals described 

5 in subsection (b). 

6 SEC. 3013. QUALITY MEASURE DEVELOPMENT. 

7 Title XVIII of the Social Security Act (42 U.S.C. 

8 1395 et seq.), as amended by section 3011, is further 

9 amended by inserting after section 1890A the following 

10 new section: 

11 ‘‘QUALITY MEASURE DEVELOPMENT

12 ‘‘SEC. 1890B. (a) QUALITY MEASURE.—In this sec13 tion, the term ‘quality measure’ means a standard for 

14 measuring the performance and improvement of popu15 lation health or of health plans, providers of services, and 

16 other clinicians in the delivery of health care services. 

17 ‘‘(b) IDENTIFICATION OF QUALITY MEASURES.— 

18 ‘‘(1) IDENTIFICATION.—The Secretary shall 

19 identify, not less often than triennially, gaps where 

20 no quality measures exist, or where existing quality 

21 measures need improvement, updating, or expansion, 

22 consistent with the national strategy under section 

23 1890A, for use in programs authorized under this 

24 Act. In identifying such gaps, the Secretary shall 

25 take into consideration the gaps identified by a 


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1 qualified consensus-based entity under section 

2 1890C. 

3 ‘‘(2) PUBLICATION.—The Secretary shall make 

4 available to the public on an Internet website a re5 port on any gaps identified under paragraph (1) and 

6 the process used to make such identification. 

7 ‘‘(c) GRANTS OR CONTRACTS FOR QUALITY MEAS8 URE DEVELOPMENT.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall award 

10 grants, contracts, or intergovernmental agreements 

11 to eligible entities for purposes of developing, im12 proving, updating, or expanding quality measures 

13 identified under subsection (b). 

14 ‘‘(2) PRIORITIZATION IN THE DEVELOPMENT

15 OF QUALITY MEASURES.—In awarding grants, con16 tracts, or agreements under this subsection, the Sec17 retary shall give priority to the development of qual18 ity measures that allow the assessment of— 

19 ‘‘(A) health outcomes and functional status 

20 of patients; 

21 ‘‘(B) the coordination of health care across 

22 episodes of care and care transitions; 

23 ‘‘(C) the meaningful use of health informa24 tion technology; 


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1 ‘‘(D) safety, effectiveness, patient2 centeredness, appropriateness, and timeliness of 

3 care; 

4 ‘‘(E) efficiency of care; 

5 ‘‘(F) equity of health services and health 

6 disparities across health disparity populations 

7 (as defined in section 485E of the Public 

8 Health Service Act) and geographic areas; 

9 ‘‘(G) patient experience and satisfaction; 

10 and 

11 ‘‘(H) other areas determined appropriate 

12 by the Secretary. 

13 ‘‘(3) ELIGIBLE ENTITIES.—To be eligible for a 

14 grant or contract under this subsection, an entity 

15 shall— 

16 ‘‘(A) have demonstrated expertise and ca17 pacity in the development and evaluation of 

18 quality measures; 

19 ‘‘(B) have adopted procedures to include in 

20 the quality measure development process— 

21 ‘‘(i) the views of those providers or 

22 payers whose performance will be assessed 

23 by the measure; and 

24 ‘‘(ii) the views of other parties who 

25 also will use the quality measures (such as 


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1 patients, consumers, and health care pur2 chasers); 

3 ‘‘(C) collaborate with a qualified con4 sensus-based entity (as defined in section 

5 1890C), as practicable, and the Secretary so 

6 that quality measures developed by the eligible 

7 entity will meet the requirements to be consid8 ered for endorsement by such qualified con9 sensus-based entity; 

10 ‘‘(D) have transparent policies regarding 

11 governance and conflicts of interest; and 

12 ‘‘(E) submit an application to the Sec13 retary at such time and in such manner, as the 

14 Secretary may require. 

15 ‘‘(4) USE OF FUNDS.—An entity that receives 

16 a grant, contract, or agreement under this sub17 section shall use such award to develop quality 

18 measures that meet the following requirements: 

19 ‘‘(A) Such measures build upon measures 

20 required to be reported pursuant to this title, 

21 where applicable. 

22 ‘‘(B) To the extent practicable, data on 

23 such quality measures is able to be collected 

24 using health information technologies. 


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1 ‘‘(C) Each quality measure is free of 

2 charge to users of such measure. 

3 ‘‘(D) Each quality measure is publicly 

4 available on an Internet website. 

5 ‘‘(d) OTHER ACTIVITIES BY THE SECRETARY.—The 

6 Secretary may use amounts available under this section 

7 to update and test, where applicable, quality measures en8 dorsed by a qualified consensus-based entity (as defined 

9 in section 1890C) or adopted by the Secretary. 

10 ‘‘(e) FUNDING.—There are authorized to be appro11 priated to carry out this section, $75,000,000 for each of 

12 fiscal years 2010 through 2014.’’. 

13 SEC. 3014. QUALITY MEASURE ENDORSEMENT. 

14 Title XVIII of the Social Security Act (42 U.S.C. 

15 1395 et seq.), as amended by sections 3011 and 3013, 

16 is further amended by inserting after section 1890B the 

17 following new section: 

18 ‘‘QUALITY MEASURE ENDORSEMENT

19 ‘‘SEC. 1890C. (a) DEFINITION.—In this section: 

20 ‘‘(1) QUALIFIED CONSENSUS-BASED ENTITY.— 

21 The term ‘qualified consensus-based entity’ means 

22 an entity with a contract with the Secretary under 

23 section 1890. 

24 ‘‘(2) QUALITY MEASURE.—The term ‘quality 

25 measure’ means a standard for measuring the per26 formance and improvement of population health or 


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1 of health plans, providers of services, and other clini2 cians in the delivery of health care services. 

3 ‘‘(3) MULTI-STAKEHOLDER GROUP.—The term 

4 ‘multi-stakeholder group’ means, with respect to a 

5 quality measure, a voluntary collaborative of organi6 zations representing a broad group of stakeholders 

7 interested in or affected by the use of such quality 

8 measure. Stakeholders would include representatives 

9 of hospitals, physicians, post-acute providers, quality 

10 alliances, nurses and other health care practitioners, 

11 health plans, consumer representatives, life sciences 

12 industry, employers and public purchasers, labor or13 ganizations, licensing, credentialing and accrediting 

14 bodies, relevant government agency representatives; 

15 and others deemed appropriate by the Secretary. 

16 Such a multi-stakeholder group would operate in an 

17 open and transparent process. 

18 ‘‘(b) GRANTS AND CONTRACTS.—A qualified con19 sensus-based entity may receive a grant or contract under 

20 this section to— 

21 ‘‘(1) make recommendations to the Secretary 

22 for national priorities for performance improvement 

23 in population health and in the delivery of health 

24 care services; 


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1 ‘‘(2) identify gaps in endorsed quality measures, 

2 which shall include measures that are within priority 

3 areas identified by the Secretary under the national 

4 strategy established under section 1890A; 

5 ‘‘(3) identify and endorse quality measures; 

6 ‘‘(4) update endorsed quality measures at least 

7 every 3 years; 

8 ‘‘(5) make endorsed quality measures publicly 

9 available and have a plan for broad-based dissemina10 tion of endorsed measures; and 

11 ‘‘(6) transmit endorsed quality measures to the 

12 Secretary. 

13 ‘‘(c) ANNUAL REPORTS.— 

14 ‘‘(1) IN GENERAL.—A qualified consensus15 based entity that receives a grant or contract under 

16 this section shall provide a report to the Secretary 

17 not less than annually— 

18 ‘‘(A) of where gaps (as described in sub19 section (b)(2)) exist and where quality measures 

20 are unavailable or inadequate to identify or ad21 dress such gaps; and 

22 ‘‘(B) regarding areas in which evidence is 

23 insufficient to support endorsement of quality 

24 measures in priority areas identified by the Sec25 retary under the national strategy established 


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1 under section 1890A and where targeted re2 search may address such gaps. 

3 ‘‘(2) IMPACT OF QUALITY MEASURES.—A quali4 fied consensus-based entity that receives a grant or 

5 contract under this section shall provide a report to 

6 the Secretary not less than annually regarding the 

7 economic and quality impact of the use of endorsed 

8 measures. 

9 ‘‘(d) PRIORITIES FOR PERFORMANCE IMPROVE10 MENT.— 

11 ‘‘(1) RECOMMENDATION FOR NATIONAL PRIOR12 ITIES.—A qualified consensus-based entity that re13 ceives a grant or contract under this section shall 

14 evaluate evidence and convene multi-stakeholder 

15 groups to make recommendations to the Secretary 

16 for national priorities (as identified in section 

17 1890A(a)(2)) for improvement in population health 

18 and in the delivery of health care services for consid19 eration under the national strategy established 

20 under section 1890A. The qualified consensus-based 

21 entity shall make such recommendations not less fre22 quently than triennially. 

23 ‘‘(2) REQUIREMENTS FOR TRANSPARENCY IN

24 PROCESS.— 


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1 ‘‘(A) IN GENERAL.—In convening multi2 stakeholder groups under paragraph (1) with 

3 respect to recommendations for national prior4 ities, the qualified consensus-based entity shall 

5 provide for an open and transparent process for 

6 the activities conducted pursuant to such con7 vening. 

8 ‘‘(B) SELECTION OF ORGANIZATIONS PAR9 TICIPATING IN MULTI-STAKEHOLDER

10 GROUPS.—The process under subparagraph (A) 

11 shall ensure that the selection of representatives 

12 comprising such groups provides for public 

13 nominations for, and the opportunity for public 

14 comment on, such selection. 

15 ‘‘(e) PROCESS FOR CONSULTATION OF STAKE16 HOLDER GROUPS.— 

17 ‘‘(1) CONSULTATION OF SELECTION OF EN18 DORSED QUALITY MEASURES.—A qualified con19 sensus-based entity that receives a grant or contract 

20 under this section shall convene multi-stakeholder 

21 groups to provide guidance on the selection of indi22 vidual or composite quality measures, for use in re23 porting performance information to the public or for 

24 use in Federal health programs, from among— 


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1 ‘‘(A) such measures that have been en2 dorsed by the qualified consensus-based entity 

3 (under section 1890(b) or otherwise); and 

4 ‘‘(B) such measures that have not been 

5 considered for endorsement by the qualified 

6 consensus-based entity but are used or proposed 

7 to be used by the Secretary under subsection 

8 (f)(2) under laws under the jurisdiction of the 

9 Secretary that require the collection or report10 ing of quality measures. 

11 ‘‘(2) ESTABLISHMENT OF PRE-RULEMAKING

12 PROCESS.— 

13 ‘‘(A) IN GENERAL.—The Secretary shall 

14 establish a pre-rulemaking process under which 

15 a qualified consensus-based entity that receives 

16 a grant or contract under this section and 

17 multi-stakeholder groups convened under para18 graph (1) provide guidance to the Secretary on 

19 the selection of individual or composite quality 

20 measures (as described in such paragraph). 

21 ‘‘(B) PUBLIC AVAILABILITY OF MEASURES

22 CONSIDERED FOR SELECTION.—Not later than 

23 December 1 or each year (beginning with 

24 2011), the Secretary shall make available to the 

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1 retary is considering for selection with respect 

2 to quality reporting and payment systems under 

3 this title. 

4 ‘‘(C) INCLUSION OF MEASURES.—The list 

5 made available under subparagraph (B) may in6 clude such measures that are described in sub7 paragraphs (A) or (B) of paragraph (1) as the 

8 Secretary determines appropriate. 

9 ‘‘(D) TRANSMISSION OF MULTI-STAKE10 HOLDER GUIDANCE.—Not later than February 

11 1 of each year (beginning with 2012), the quali12 fied consensus-based entity shall transmit to 

13 the Secretary the guidance of multi-stakeholder 

14 groups provided under paragraph (1). 

15 ‘‘(3) REQUIREMENT FOR TRANSPARENCY IN

16 PROCESS.— 

17 ‘‘(A) IN GENERAL.—In convening multi18 stakeholder groups under paragraph (1) with 

19 respect to the selection of quality measures, the 

20 qualified consensus-based entity shall provide 

21 for an open and transparent process for the ac22 tivities conducted pursuant to such convening. 

23 ‘‘(B) SELECTION OF ORGANIZATIONS PAR24 TICIPATING IN MULTI-STAKEHOLDER

25 GROUPS.—The process under subparagraph (A) 


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1 shall ensure that the selection of representatives 

2 comprising such groups provides for public 

3 nominations for, and the opportunity for public 

4 comment on, such selection. 

5 ‘‘(f) COORDINATION OF USE OF QUALITY MEAS6 URES.— 

7 ‘‘(1) ENDORSED QUALITY MEASURES.—The 

8 Secretary may make a determination under regula9 tion or otherwise to use a quality measure described 

10 in subsection (e)(1)(A) only after taking into ac11 count the guidance of multi-stakeholder groups 

12 under subsection (e)(2). 

13 ‘‘(2) USE OF NON-ENDORSED MEASURES.— 

14 ‘‘(A) IN GENERAL.—The Secretary may 

15 make a determination, by regulation or other16 wise, to use a quality measure that has not 

17 been endorsed as described in subsection 

18 (e)(1)(A), provided that the Secretary— 

19 ‘‘(i) in a timely manner, transmits the 

20 measure to the qualified consensus-based 

21 entity for consideration for endorsement 

22 and for the multi-stakeholder consultation 

23 process under subsection (e)(1); 


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1 ‘‘(ii) publishes in the Federal Register 

2 the rationale for the use of the measure; 

3 and 

4 ‘‘(iii) phases out use of the measure 

5 upon a decision of the qualified consensus6 based entity not to endorse the measure, 

7 contingent on availability of an adequate 

8 alternative endorsed measure (as deter9 mined by the Secretary), taking into ac10 count guidance from multi-stakeholder con11 sultation process under subsection (e)(1). 

12 ‘‘(B) NO ADEQUATE ALTERNATIVE.—If an 

13 adequate alternative endorsed measure is not 

14 available, the Secretary shall support the devel15 opment of such an alternative endorsed meas16 ure, as described in section 1890B. 

17 ‘‘(3) EFFECTIVE DATE.—This subsection shall 

18 apply with respect to determinations or requirements 

19 by the Secretary for the use of quality measures 

20 made on or after the date of enactment of the Amer21 ica’s Health Future Act of 2009. 

22 ‘‘(g) REVIEW OF QUALITY MEASURES USED BY THE

23 SECRETARY.— 

24 ‘‘(1) IN GENERAL.—Not less than once every 3 

25 years, the Secretary shall review quality measures 


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1 used by the Secretary and, with respect to each such 

2 measure, shall determine whether to— 

3 ‘‘(A) maintain the use of such measure; or 

4 ‘‘(B) phase out such measure. 

5 ‘‘(2) CONSIDERATIONS.—In conducting the re6 view under paragraph (1), the Secretary shall— 

7 ‘‘(A) seek to avoid duplication of measures 

8 used; and 

9 ‘‘(B) take into consideration current inno10 vative methodologies and strategies for quality 

11 improvement practices in the delivery of health 

12 care services that represent best practices for 

13 such quality improvement and measures en14 dorsed by a qualified consensus-based entity 

15 since the previous review by the Secretary. 

16 ‘‘(h) PROCESS FOR DISSEMINATION OF MEASURES

17 USED BY THE SECRETARY.— 

18 ‘‘(1) IN GENERAL.—The Secretary shall estab19 lish a process for disseminating quality measures 

20 used by the Secretary. Such process shall include the 

21 incorporation of such measures, where applicable, in 

22 workforce programs, training curricula, payment 

23 programs, and any other means of dissemination de24 termined by the Secretary. The Secretary shall es25 tablish a process to disseminate such quality measVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00730 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ures to the Interagency Working Group established 

2 in section 3012 of the America’s Health Future Act 

3 of 2009. 

4 ‘‘(2) AUTHORITY TO CONTRACT WITH CERTAIN

5 ORGANIZATIONS FOR DISSEMINATION.— 

6 ‘‘(A) IN GENERAL.—The Secretary may 

7 contract with 1 or more entities that meet the 

8 requirements described in subparagraph (B) to 

9 carry out this subsection. 

10 ‘‘(B) ENTITIES DESCRIBED.—The require11 ments described in this subparagraph are the 

12 following: 

13 ‘‘(i) The entity is a nonprofit entity. 

14 ‘‘(ii) The entity has at least 5 years of 

15 experience in developing and implementing 

16 quality improvement strategies. 

17 ‘‘(iii) The entity has operated pro18 grams described in paragraph (1) on a 

19 statewide or multi-State basis to improve 

20 patient safety and the quality of health 

21 care delivered in hospitals, including at a 

22 minimum such programs in hospital inten23 sive care units, hospital-associated infec24 tions, hospital perioperative patient safety, 

25 and hospital emergency rooms. 


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1 ‘‘(iv) The entity has worked with a va2 riety of institutional health care providers, 

3 physicians, and other providers of services 

4 and suppliers. 

5 ‘‘(i) TECHNICAL ASSISTANCE.—The Secretary shall 

6 provide technical assistance to providers of services and 

7 suppliers required to report on measures under this title. 

8 In providing such assistance, the Secretary shall give pri9 ority to— 

10 ‘‘(1) rural and urban providers of services and 

11 suppliers with limited infrastructure and financial 

12 resources to implement and support quality improve13 ment activities; 

14 ‘‘(2) providers of services and suppliers with 

15 poor performance scores; and 

16 ‘‘(3) providers of services and suppliers with 

17 disparities in care among subgroups of patients. 

18 ‘‘(j) FUNDING.—For purposes of carrying out this 

19 section, the Secretary of Health and Human Services shall 

20 provide for the transfer, from the Federal Hospital Insur21 ance Trust Fund under section 1817 and the Federal Sup22 plementary Medical Insurance Trust Fund under section 

23 1841, in such proportion as the Secretary determines ap24 propriate, of $50,000,000, to the Centers for Medicare & 

25 Medicaid Services Program Management Account for each 


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1 of fiscal years 2010 through 2014. Amounts transferred 

2 under the preceding sentence shall remain available until 

3 expended.’’. 

4 PART III—ENCOURAGING DEVELOPMENT OF 

5 NEW PATIENT CARE MODELS 

6 SEC. 3021. ESTABLISHMENT OF CENTER FOR MEDICARE 

7 AND MEDICAID INNOVATION WITHIN CMS. 

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

9 is amended by inserting after section 1115 the following 

10 new section: 

11 ‘‘CENTER FOR MEDICARE AND MEDICAID INNOVATION

12 ‘‘SEC. 1115A. (a) CENTER FOR MEDICARE AND

13 MEDICAID INNOVATION ESTABLISHED.— 

14 ‘‘(1) IN GENERAL.—There is created within the 

15 Centers for Medicare & Medicaid Services a Center 

16 for Medicare and Medicaid Innovation (in this sec17 tion referred to as the ‘CMI’) to carry out the duties 

18 described in this section. The purpose of the CMI is 

19 to test innovative payment and service delivery mod20 els to reduce program expenditures under the appli21 cable titles while preserving or enhancing the quality 

22 of care furnished to individuals under such titles. In 

23 selecting such models, the Secretary shall give pref24 erence to models that also improve the coordination, 

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1 nished to applicable individuals defined in paragraph 

2 (4)(A). 

3 ‘‘(2) DEADLINE.—The Secretary shall ensure 

4 that the CMI is carrying out the duties described in 

5 this section by not later than January 1, 2011. 

6 ‘‘(3) CONSULTATION.—In carrying out the du7 ties under this section, the CMI shall consult rep8 resentatives of relevant Federal agencies, and clin9 ical and analytical experts with expertise in medicine 

10 and health care management. The CMI shall use 

11 open door forums or other mechanisms to seek input 

12 from interested parties. 

13 ‘‘(4) DEFINITIONS.—In this section: 

14 ‘‘(A) APPLICABLE INDIVIDUAL.—The term 

15 ‘applicable individual’ means— 

16 ‘‘(i) an individual who is entitled to, 

17 or enrolled for, benefits under part A of 

18 title XVIII or enrolled for benefits under 

19 part B of such title; 

20 ‘‘(ii) an individual who is eligible for 

21 medical assistance under title XIX, under 

22 a State plan or waiver; or 

23 ‘‘(iii) an individual who meets the cri24 teria of both clauses (i) and (ii). 


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1 ‘‘(B) APPLICABLE TITLE.—The term ‘ap2 plicable title’ means title XVIII, title XIX, or 

3 both. 

4 ‘‘(b) TESTING OF MODELS (PHASE I).— 

5 ‘‘(1) IN GENERAL.—The CMI shall test pay6 ment and service delivery models in accordance with 

7 selection criteria under paragraph (2) to determine 

8 the effect of applying such models under the applica9 ble title (as defined in subsection (a)(4)(B)) on pro10 gram expenditures under such titles and the quality 

11 of care received by individuals receiving benefits 

12 under such title. 

13 ‘‘(2) SELECTION OF MODELS TO BE TESTED.— 

14 ‘‘(A) IN GENERAL.—The Secretary shall 

15 select models to be tested from models where 

16 the Secretary determines that there is evidence 

17 that the model addresses a defined population 

18 for which there are deficits in care leading to 

19 poor clinical outcomes or potentially avoidable 

20 expenditures. The models selected under the 

21 preceding sentence may include the models de22 scribed in subparagraph (B). 

23 ‘‘(B) OPPORTUNITIES.—The models de24 scribed in this subparagraph are the following 

25 models: 


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1 ‘‘(i) Promoting broad payment and 

2 practice reform in primary care, including 

3 patient-centered medical home models for 

4 high-need Medicare beneficiaries, medical 

5 homes that address women’s unique health 

6 care needs, and models that transition pri7 mary care practices away from fee-for-serv8 ice based reimbursement and toward com9 prehensive payment or salary-based pay10 ment under title XVIII 

11 ‘‘(ii) Contracting directly with groups 

12 of providers of services and suppliers to 

13 promote innovative care delivery models, 

14 such as through risk-based comprehensive 

15 payment or salary-based payment. 

16 ‘‘(iii) Promote care coordination be17 tween providers of services and suppliers 

18 that transition health care providers away 

19 from fee-for-service based reimbursement 

20 and toward salary-based payment. 

21 ‘‘(iv) Supporting care coordination for 

22 chronically-ill Medicare beneficiaries at 

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1 tion technology-enabled network that in2 cludes a chronic disease registry, home 

3 tele-health technology, and care oversight 

4 by the Medicare beneficiary’s treating phy5 sician. 

6 ‘‘(v) Varying payment to physicians 

7 who order advanced diagnostic imaging 

8 services (as defined in section 

9 1834(e)(1)(B)) according to the physi10 cian’s adherence to appropriateness criteria 

11 for the ordering of such services, as deter12 mined in consultation with physician spe13 cialty groups and other relevant stake14 holders. 

15 ‘‘(vi) Utilizing medication therapy 

16 management services. 

17 ‘‘(vii) Establishing community-based 

18 health teams to support small-practice 

19 medical homes by assisting the primary 

20 care practitioner in chronic care manage21 ment activities. 

22 ‘‘(viii) Funding physician, nurse prac23 titioner, or physician assistant-led home24 based primary care programs with dem25 onstrated experience in serving high-cost 


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1 Medicare beneficiaries with multiple chron2 ic illnesses and functional disabilities. 

3 ‘‘(ix) Assisting Medicare beneficiaries 

4 in making informed health care choices by 

5 paying providers of services and suppliers 

6 for using patient decision-support tools 

7 that improve Medicare beneficiary and 

8 caregiver understanding of medical treat9 ment options. 

10 ‘‘(x) Allowing States to test and 

11 evaluate fully integrating care for dual eli12 gible individuals in the State, including the 

13 management and oversight of all funds 

14 under the applicable titles with respect to 

15 such individuals. 

16 ‘‘(xi) Allowing States to test and 

17 evaluate systems of all-payer payment re18 form for the medical care of residents of 

19 the State, including dual eligible individ20 uals. 

21 ‘‘(xii) Aligning nationally-recognized, 

22 evidence-based guidelines of cancer care 

23 with payment incentives under title XVIII 

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1 ficiaries with cancer, including the identi2 fication of gaps in applicable quality meas3 ures. 

4 ‘‘(xiii) Improving post-acute care 

5 through continuing care hospitals that 

6 offer inpatient rehabilitation, long-term 

7 care hospitals, and home health or skilled 

8 nursing care during an inpatient stay and 

9 the 30 days immediately following dis10 charge. 

11 ‘‘(xiv) Funding home health providers 

12 who offer chronic care management serv13 ices to Medicare beneficiaries in coopera14 tion with interdisciplinary teams. 

15 ‘‘(xv) Promoting improved quality and 

16 reduced cost by developing a collaborative 

17 of high-quality, low-cost health care insti18 tutions that is responsible for— 

19 ‘‘(I) developing, documenting, 

20 and disseminating best practices and 

21 proven care methods; 

22 ‘‘(II) implementing such best 

23 practices and proven care methods 

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1 onstrate further improvements in 

2 quality and efficiency; and 

3 ‘‘(III) providing assistance to 

4 other health care institutions on how 

5 best to employ such best practices and 

6 proven care methods to improve 

7 health care quality and lower costs. 

8 ‘‘(xvi) Promoting greater efficiencies 

9 and timely access to outpatient services 

10 (such as outpatient physical therapy serv11 ices) through models that do not require a 

12 physician or other health professional to 

13 refer the service or be involved in estab14 lishing the plan of care for the service, 

15 when such service is furnished by a health 

16 professional who has the authority to fur17 nish the service under existing State law. 

18 ‘‘(C) ADDITIONAL FACTORS FOR CONSID19 ERATION.—In selecting models for testing 

20 under subparagraph (A), the CMI may consider 

21 the following additional factors: 

22 ‘‘(i) Whether the model includes a 

23 regular process for monitoring and updat24 ing patient care plans in a manner that is 


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1 consistent with the needs and preferences 

2 of Medicare beneficiaries. 

3 ‘‘(ii) Whether the model places the 

4 Medicare beneficiary, including family 

5 members and other informal caregivers of 

6 the beneficiary, at the center of the care 

7 team of the beneficiary. 

8 ‘‘(iii) Whether the model provides for 

9 in-person contact with Medicare bene10 ficiaries. 

11 ‘‘(iv) Whether the model utilizes tech12 nology, such as electronic health records 

13 and patient-based remote monitoring sys14 tems, to coordinate care over time and 

15 across settings. 

16 ‘‘(v) Whether the model provides for 

17 the maintenance of a close relationship be18 tween care coordinators, primary care 

19 practitioners, specialist physicians, and 

20 other providers of services and suppliers. 

21 ‘‘(vi) Whether the model relies on a 

22 team-based approach to interventions, such 

23 as comprehensive care assessments, care 

24 planning, and self-management coaching. 


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1 ‘‘(vii) Whether, under the model, pro2 viders of services and suppliers are able to 

3 share information with other providers of 

4 services and suppliers on a real time basis. 

5 ‘‘(3) BUDGET NEUTRALITY.— 

6 ‘‘(A) INITIAL PERIOD.—The Secretary 

7 shall not require, as a condition for testing a 

8 model under paragraph (1), that the design of 

9 such model ensure that such model is budget 

10 neutral initially with respect to expenditures 

11 under the applicable title. 

12 ‘‘(B) TERMINATION OR MODIFICATION.— 

13 The Secretary shall terminate or modify the de14 sign and implementation of a model unless the 

15 Secretary determines (and the Chief Actuary of 

16 the Centers for Medicare & Medicaid Services, 

17 with respect to program spending under the ap18 plicable title, certifies), after testing has begun, 

19 that the model is expected to— 

20 ‘‘(i) improve the quality of care (as 

21 determined by the Administrator of the 

22 Centers for Medicare & Medicaid Services) 

23 without increasing spending under the ap24 plicable title; 


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1 ‘‘(ii) reduce spending under the appli2 cable title without reducing the quality of 

3 care; or 

4 ‘‘(iii) improve the quality of care and 

5 reduce spending. 

6 Such termination may occur at any time after 

7 such testing has begun and before completion of 

8 the testing. 

9 ‘‘(4) EVALUATION.— 

10 ‘‘(A) IN GENERAL.—The Secretary shall 

11 conduct an evaluation of each model tested 

12 under this subsection. Such evaluation shall in13 clude an analysis of— 

14 ‘‘(i) the quality of care furnished 

15 under the model, including the measure16 ment of patient-level outcomes; and 

17 ‘‘(ii) the changes in spending under 

18 the applicable titles by reason of the 

19 model. 

20 ‘‘(B) INFORMATION.—The Secretary shall 

21 make the results of each evaluation under this 

22 paragraph available to the public in a timely 

23 fashion and may establish requirements for 

24 States and other entities participating in the 

25 testing of models under this section to collect 


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1 and report information that the Secretary de2 termines is necessary to monitor and evaluate 

3 such models. 

4 ‘‘(c) EXPANSION OF MODELS (PHASE II).—Taking 

5 into account the evaluation under subsection (b)(4), the 

6 Secretary may, through rulemaking, expand (including im7 plementation on a nationwide basis) the duration and the 

8 scope of a model that is being tested under subsection (b) 

9 or a demonstration project under section 1866C, to the 

10 extent determined appropriate by the Secretary, if— 

11 ‘‘(1) the Secretary determines that such expan12 sion is expected to— 

13 ‘‘(A) reduce spending under applicable title 

14 without reducing the quality of care; or 

15 ‘‘(B) improve the quality of care and re16 duce spending; and 

17 ‘‘(2) the Chief Actuary of the Centers for Medi18 care & Medicaid Services certifies that such expan19 sion would reduce net program spending under ap20 plicable titles. 

21 ‘‘(d) IMPLEMENTATION.— 

22 ‘‘(1) WAIVER AUTHORITY.—The Secretary may 

23 waive such requirements of titles XI and XVIII and 

24 of sections 1902(a)(1), 1902(a)(13), and 

25 1903(m)(2)(A)(iii) as may be necessary solely for 


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1 purposes of carrying out this section with respect to 

2 testing models described in subsection (b). 

3 ‘‘(2) LIMITATIONS ON REVIEW.—There shall be 

4 no administrative or judicial review under section 

5 1869, section 1878, or otherwise of— 

6 ‘‘(A) the selection of models for testing or 

7 expansion under this section; 

8 ‘‘(B) the selection of organizations, sites, 

9 or participants to test those models selected; 

10 ‘‘(C) the elements, parameters, scope, and 

11 duration of such models for testing or dissemi12 nation; 

13 ‘‘(D) determinations regarding budget neu14 trality under subsection (b)(3); 

15 ‘‘(E) the termination or modification of the 

16 design and implementation of a model under 

17 subsection (b)(3)(B); and 

18 ‘‘(F) determinations about expansion of 

19 the duration and scope of a model under sub20 section (c), including the determination that a 

21 model is not expected to meet criteria described 

22 in paragraph (1) or (2) of such subsection. 

23 ‘‘(3) ADMINISTRATION.—Chapter 35 of title 44, 

24 United States Code, shall not apply to the testing 


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1 and evaluation of models or expansion of such mod2 els under this section. 

3 ‘‘(e) APPLICATION TO CHIP.—The Center may carry 

4 out activities under this section with respect to title XXI 

5 in the same manner as provided under this section with 

6 respect to the program under the applicable titles. 

7 ‘‘(f) FUNDING.— 

8 ‘‘(1) IN GENERAL.—There are appropriated, 

9 from amounts in the Treasury not otherwise appro10 priated— 

11 ‘‘(A) $10,000,000,000 for the activities ini12 tiated under this section for the period of fiscal 

13 years 2011 through 2019; and 

14 ‘‘(B) the amount described in subpara15 graph (A) for the activities initiated under this 

16 section for each subsequent 10-year fiscal pe17 riod (beginning with the 10-year fiscal period 

18 beginning with fiscal year 2020). 

19 Amounts appropriated under the preceding sentence 

20 shall remain available until expended. 

21 ‘‘(2) USE OF CERTAIN FUNDS.—Out of 

22 amounts appropriated under paragraph (1), not less 

23 than $25,000,000 shall be made available each such 

24 fiscal year to design, implement, and evaluate mod25 els under subsection (b). 


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1 ‘‘(g) REPORT TO CONGRESS.—Beginning in 2012, 

2 and not less than once every other year thereafter, the 

3 Secretary shall submit to Congress a report on activities 

4 under this section. Each such report shall describe the 

5 models tested under subsection (b), including the number 

6 of individuals described in subsection (a)(4)(A)(i) and of 

7 individuals described in subsection (a)(4)(A)(ii) partici8 pating in such models and payments made under applica9 ble titles for services on behalf of such individuals, any 

10 models chosen for expansion under subsection (c), and the 

11 results from evaluations under subsection (b)(4). In addi12 tion, each such report shall provide such recommendations 

13 as the Secretary determines are appropriate for legislative 

14 action to facilitate the development and expansion of suc15 cessful payment models.’’. 

16 (b) MEDICAID CONFORMING AMENDMENT.—Section 

17 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), 

18 as amended by sections 5103 and 5105, is amended— 

19 (1) in paragraph (77), by striking ‘‘and’’ at the 

20 end; 

21 (2) in paragraph (78), by striking the period at 

22 the end and inserting ‘‘; and’’; and 

23 (3) by inserting after paragraph (78) the fol24 lowing new paragraph: 


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1 ‘‘(79) provide for implementation of the pay2 ment models specified by the Secretary under section 

3 1115A(c) for implementation on a nationwide basis 

4 unless the State demonstrates to the satisfaction of 

5 the Secretary that implementation would not be ad6 ministratively feasible or appropriate to the health 

7 care delivery system of the State.’’. 

8 (c) REVISIONS TO HEALTH CARE QUALITY DEM9 ONSTRATION PROGRAM.—Subsections (b) and (f) of sec10 tion 1866C of the Social Security Act (42 U.S.C. 1395cc– 

11 3) are amended by striking ‘‘5-year’’ each place it appears. 

12 SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM. 

13 Title XVIII of the Social Security Act (42 U.S.C. 

14 1395 et seq.) is amended by adding at the end the fol15 lowing new section: 

16 ‘‘SHARED SAVINGS PROGRAM

17 ‘‘SEC. 1899. (a) ESTABLISHMENT.— 

18 ‘‘(1) IN GENERAL.—Not later than January 1, 

19 2012, the Secretary shall establish a shared savings 

20 program (in this section referred to as the ‘pro21 gram’) that promotes accountability for a patient 

22 population and coordinates items and services under 

23 parts A and B, and encourages investment in infra24 structure and redesigned care processes for high 

25 quality and efficient service delivery. Under such 

26 program— 


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1 ‘‘(A) groups of providers of services and 

2 suppliers meeting criteria specified by the Sec3 retary may work together to manage and co4 ordinate care for Medicare fee-for-service bene5 ficiaries through an accountable care organiza6 tion (referred to in this section as an ‘ACO’); 

7 and 

8 ‘‘(B) ACOs that meet quality performance 

9 standards established by the Secretary are eligi10 ble to receive payments for shared savings 

11 under subsection (d)(2). 

12 ‘‘(b) ELIGIBLE ACOS.— 

13 ‘‘(1) IN GENERAL.—Subject to the succeeding 

14 provisions of this subsection, as determined appro15 priate by the Secretary, the following groups of pro16 viders of services and suppliers which have estab17 lished a mechanism for shared governance are eligi18 ble to participate as ACOs under the program under 

19 this section: 

20 ‘‘(A) ACO professionals in group practice 

21 arrangements. 

22 ‘‘(B) Networks of individual practices of 

23 ACO professionals. 


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1 ‘‘(C) Partnerships or joint venture ar2 rangements between hospitals and ACO profes3 sionals. 

4 ‘‘(D) Hospitals employing ACO profes5 sionals. 

6 ‘‘(E) Such other groups of providers of 

7 services and suppliers as the Secretary deter8 mines appropriate. 

9 ‘‘(2) REQUIREMENTS.—An ACO shall meet the 

10 following requirements: 

11 ‘‘(A) The ACO shall be willing to become 

12 accountable for the quality, cost, and overall 

13 care of the Medicare fee-for-service beneficiaries 

14 assigned to it. 

15 ‘‘(B) The ACO shall enter into an agree16 ment with the Secretary to participate in the 

17 program for not less than a 3-year period (re18 ferred to in this section as the ‘agreement pe19 riod’). 

20 ‘‘(C) The ACO shall have a formal legal 

21 structure that would allow the organization to 

22 receive and distribute payments for shared sav23 ings under subsection (d)(2) to participating 

24 providers of services and suppliers. 


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1 ‘‘(D) The ACO shall include the primary 

2 care ACO professionals described in subsection 

3 (h)(1)(A) of at least 5,000 Medicare fee-for4 service beneficiaries assigned to the ACO under 

5 subsection (c). 

6 ‘‘(E) The ACO shall provide the Secretary 

7 with such information regarding ACO profes8 sionals participating in the ACO as the Sec9 retary determines necessary to support the as10 signment of Medicare fee-for-service bene11 ficiaries to an ACO, the implementation of 

12 quality and other reporting requirements under 

13 paragraph (3), and the determination of pay14 ments for shared savings under subsection 

15 (d)(2). 

16 ‘‘(F) The ACO shall have in place a leader17 ship and management structure that includes 

18 clinical and administrative systems. 

19 ‘‘(G) The ACO shall define processes to 

20 promote evidence-based medicine, report on 

21 quality and cost measures, and coordinate care, 

22 such as through the use of telehealth, remote 

23 patient monitoring, and other such enabling 

24 technologies. 


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1 ‘‘(H) The ACO shall demonstrate to the 

2 Secretary that it meets patient-centeredness cri3 teria specified by the Secretary, such as the use 

4 of patient and caregiver assessments or the use 

5 of individualized care plans. 

6 ‘‘(3) QUALITY AND OTHER REPORTING RE7 QUIREMENTS.— 

8 ‘‘(A) IN GENERAL.—The Secretary shall 

9 determine appropriate measures to assess the 

10 quality of care furnished by the ACO, such as 

11 measures of— 

12 ‘‘(i) clinical processes and outcomes; 

13 ‘‘(ii) patient perspectives on care; and 

14 ‘‘(iii) utilization (such as rates of hos15 pital admissions for ambulatory care sen16 sitive conditions). 

17 ‘‘(B) REPORTING REQUIREMENTS.—An 

18 ACO shall submit data in a form and manner 

19 specified by the Secretary on measures the Sec20 retary determines necessary for the ACO to re21 port in order to evaluate the quality of care fur22 nished by the ACO. Such data may include care 

23 transitions across health care settings, including 

24 hospital discharge planning and post hospital 


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1 discharge follow-up by ACO professionals, as 

2 the Secretary determines appropriate. 

3 ‘‘(C) QUALITY PERFORMANCE STAND4 ARDS.—The Secretary shall establish quality 

5 performance standards to assess the quality of 

6 care furnished by ACOs. The Secretary shall 

7 seek to improve the quality of care furnished by 

8 ACOs over time by specifying higher standards, 

9 new measures, or both for purposes of assessing 

10 such quality of care. 

11 ‘‘(D) OTHER REPORTING REQUIRE12 MENTS.—The Secretary may, as the Secretary 

13 determines appropriate, incorporate reporting 

14 requirements and incentive payments related to 

15 the physician quality reporting initiative 

16 (PQRI) under section 1848, including such re17 quirements and such payments related to elec18 tronic prescribing, electronic health records, 

19 and other similar initiatives under section 1848, 

20 and may use alternative criteria than would 

21 otherwise apply under such section for deter22 mining whether to make such payments. The 

23 incentive payments described in the preceding 

24 sentence shall not be taken into consideration 


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1 when calculating any payments otherwise made 

2 under subsection (d). 

3 ‘‘(4) NO DUPLICATION IN PARTICIPATION IN

4 SHARED SAVINGS PROGRAMS.—A provider of services 

5 or supplier that participates in any of the following 

6 shall not be eligible to participate in an ACO under 

7 this section: 

8 ‘‘(A) A model tested or expanded under 

9 section 1115A that involves shared savings 

10 under this title, or any other program or dem11 onstration project that involves such shared 

12 savings. 

13 ‘‘(B) The independence at home medical 

14 practice pilot program under section 1866E. 

15 ‘‘(c) ASSIGNMENT OF MEDICARE FEE-FOR-SERVICE

16 BENEFICIARIES TO ACOS.—The Secretary shall deter17 mine an appropriate method to assign Medicare fee-for18 service beneficiaries to an ACO based on their utilization 

19 of primary care services under this title. 

20 ‘‘(d) PAYMENTS AND TREATMENT OF SAVINGS.— 

21 ‘‘(1) PAYMENTS.— 

22 ‘‘(A) IN GENERAL.—Under the program, 

23 subject to paragraph (3), payments shall con24 tinue to be made to providers of services and 

25 suppliers participating in an ACO under the 


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1 original Medicare fee-for-service program under 

2 parts A and B in the same manner as they 

3 would otherwise be made except that a partici4 pating ACO is eligible to receive payment for 

5 shared savings under paragraph (2) if— 

6 ‘‘(i) the ACO meets quality perform7 ance standards established by the Sec8 retary under subsection (b)(3); and 

9 ‘‘(ii) the ACO meets the requirement 

10 under subparagraph (B)(i). 

11 ‘‘(B) SAVINGS REQUIREMENT AND BENCH12 MARK.— 

13 ‘‘(i) DETERMINING SAVINGS.—In each 

14 year of the agreement period, an ACO 

15 shall be eligible to receive payment for 

16 shared savings under paragraph (2) only if 

17 the estimated average per capita Medicare 

18 expenditures under the ACO for Medicare 

19 fee-for-service beneficiaries for parts A and 

20 B services, adjusted for beneficiary charac21 teristics, is at least the percent specified by 

22 the Secretary below the applicable bench23 mark under clause (ii). The Secretary shall 

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1 count for normal variation in expenditures 

2 under this title, based upon the number of 

3 Medicare fee-for-service beneficiaries as4 signed to an ACO. 

5 ‘‘(ii) ESTABLISH AND UPDATE

6 BENCHMARK.—The Secretary shall esti7 mate a benchmark for each agreement pe8 riod for each ACO using the most recent 

9 available 3 years of per-beneficiary expend10 itures for parts A and B services for Medi11 care fee-for-service beneficiaries assigned 

12 to the ACO. Such benchmark shall be ad13 justed for beneficiary characteristics and 

14 such other factors as the Secretary deter15 mines appropriate and updated by the pro16 jected absolute amount of growth in na17 tional per capita expenditures for parts A 

18 and B services under the original Medicare 

19 fee-for-service program, as estimated by 

20 the Secretary. Such benchmark shall be 

21 reset at the start of each agreement pe22 riod. 

23 ‘‘(2) PAYMENTS FOR SHARED SAVINGS.—Sub24 ject to performance with respect to the quality per25 formance standards established by the Secretary 


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1 under subsection (b)(3), if an ACO meets the re2 quirements under paragraph (1), a percent (as de3 termined appropriate by the Secretary) of the dif4 ference between such estimated average per capita 

5 Medicare expenditures in a year, adjusted for bene6 ficiary characteristics, under the ACO and such 

7 benchmark for the ACO may be paid to the ACO as 

8 shared savings and the remainder of such difference 

9 shall be retained by the program under this title. 

10 The Secretary shall establish limits on the total 

11 amount of shared savings that may be paid to an 

12 ACO under this paragraph. 

13 ‘‘(3) MONITORING AVOIDANCE OF AT-RISK PA14 TIENTS.—If the Secretary determines that an ACO 

15 has taken steps to avoid patients at risk in order to 

16 reduce the likelihood of increasing costs to the ACO 

17 the Secretary may impose an appropriate sanction 

18 on the ACO, including termination from the pro19 gram. 

20 ‘‘(4) TERMINATION.—The Secretary may termi21 nate an agreement with an ACO if it does not meet 

22 the quality performance standards established by the 

23 Secretary under subsection (b)(3). 

24 ‘‘(e) ADMINISTRATION.—Chapter 35 of title 44, 

25 United States Code, shall not apply to the program. 


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1 ‘‘(f) WAIVER AUTHORITY.—The Secretary may waive 

2 such requirements of sections 1128A and 1128B and title 

3 XVIII of this Act as may be necessary to carry out the 

4 provisions of this section. 

5 ‘‘(g) LIMITATIONS ON REVIEW.—There shall be no 

6 administrative or judicial review under section 1869, sec7 tion 1878, or otherwise of— 

8 ‘‘(1) the specification of criteria under sub9 section (a)(1)(B); 

10 ‘‘(2) the assessment of the quality of care fur11 nished by an ACO and the establishment of perform12 ance standards under subsection (b)(3); 

13 ‘‘(3) the assignment of Medicare fee-for-service 

14 beneficiaries to an ACO under subsection (c); 

15 ‘‘(4) the determination of whether an ACO is 

16 eligible for shared savings under subsection (d)(2) 

17 and the amount of such shared savings, including 

18 the determination of the estimated average per cap19 ita Medicare expenditures under the ACO for Medi20 care fee-for-service beneficiaries assigned to the ACO 

21 and the average benchmark for the ACO under sub22 section (d)(1)(B); 

23 ‘‘(5) the percent of shared savings specified by 

24 the Secretary under subsection (d)(2) and any limit 


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1 on the total amount of shared savings established by 

2 the Secretary under such subsection; and 

3 ‘‘(6) the termination of an ACO under sub4 section (d)(4). 

5 ‘‘(h) DEFINITIONS.—In this section: 

6 ‘‘(1) ACO PROFESSIONAL.—The term ‘ACO 

7 professional’ means— 

8 ‘‘(A) a physician (as defined in section 

9 1861(r)(1)); and 

10 ‘‘(B) a practitioner described in section 

11 1842(b)(18)(C)(i). 

12 ‘‘(2) HOSPITAL.—The term ‘hospital’ means a 

13 subsection (d) hospital (as defined in section 

14 1886(d)(1)(B)). 

15 ‘‘(3) MEDICARE FEE-FOR-SERVICE BENE16 FICIARY.—The term ‘Medicare fee-for-service bene17 ficiary’ means an individual who is enrolled in the 

18 original Medicare fee-for-service program under 

19 parts A and B and is not enrolled in an MA plan 

20 under part C, an eligible organization under section 

21 1876, or a PACE program under section 1894.’’. 


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1 SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUN2 DLING. 

3 Title XVIII of the Social Security Act, as amended 

4 by section 3021, is amended by inserting after section 

5 1886C the following new section: 

6 ‘‘NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING

7 ‘‘SEC. 1866D. (a) IMPLEMENTATION.— 

8 ‘‘(1) IN GENERAL.—The Secretary shall estab9 lish a pilot program for integrated care during an 

10 episode of care provided to an applicable beneficiary 

11 around a hospitalization. 

12 ‘‘(2) DEFINITIONS.—In this section: 

13 ‘‘(A) APPLICABLE BENEFICIARY.—The 

14 term ‘applicable beneficiary’ means an indi15 vidual who— 

16 ‘‘(i) is entitled to, or enrolled for, ben17 efits under part A and enrolled for benefits 

18 under part B of such title, but not enrolled 

19 under part C; and 

20 ‘‘(ii) is admitted to a hospital for an 

21 applicable condition. 

22 ‘‘(B) APPLICABLE CONDITION.—The term 

23 ‘applicable condition’ means 1 or more of 8 con24 ditions selected by the Secretary. In selecting 

25 conditions under the preceding sentence, the 


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1 Secretary shall take into consideration the fol2 lowing factors: 

3 ‘‘(i) Whether the conditions selected 

4 include a mix of chronic and acute condi5 tions. 

6 ‘‘(ii) Whether the conditions selected 

7 include a mix of surgical and medical con8 ditions. 

9 ‘‘(iii) Whether a condition is one for 

10 which there is evidence of an opportunity 

11 for providers of services and suppliers to 

12 improve the quality of care furnished while 

13 reducing total expenditures under this 

14 title. 

15 ‘‘(iv) Whether a condition has signifi16 cant variation in— 

17 ‘‘(I) the number of readmissions; 

18 and 

19 ‘‘(II) the amount of expenditures 

20 for post-acute care spending under 

21 this title. 

22 ‘‘(v) Whether a condition has high-vol23 ume and high post-acute care expenditures 

24 under this title. 


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1 ‘‘(vi) Which conditions the Secretary 

2 determines are most amenable to bundling 

3 across the spectrum of care given practice 

4 patterns under this title. 

5 ‘‘(C) APPLICABLE SERVICES.—The term 

6 ‘applicable services’ means the following: 

7 ‘‘(i) Acute care inpatient services. 

8 ‘‘(ii) Physicians’ services delivered in 

9 and outside of an acute care hospital set10 ting. 

11 ‘‘(iii) Outpatient hospital services, in12 cluding emergency department services. 

13 ‘‘(iv) Services associated with acute 

14 care hospital readmissions. 

15 ‘‘(v) Post-acute care services, includ16 ing home health services, skilled nursing 

17 services, inpatient rehabilitation services, 

18 and inpatient hospital services furnished by 

19 a long-term care hospital. 

20 ‘‘(vi) Other services the Secretary de21 termines appropriate. 

22 ‘‘(D) EPISODE OF CARE.— 

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

24 (ii), the term ‘episode of care’ means, with 


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1 respect to an applicable beneficiary, the pe2 riod that includes— 

3 ‘‘(I) the 3 days prior to the ad4 mission of the applicable beneficiary 

5 to a hospital for an applicable condi6 tion; 

7 ‘‘(II) the length of stay of the ap8 plicable beneficiary in such hospital; 

9 and 

10 ‘‘(III) the 30 days following the 

11 discharge of the applicable beneficiary 

12 from such hospital. 

13 ‘‘(ii) ESTABLISHMENT OF PERIOD BY

14 THE SECRETARY.—The Secretary, as ap15 propriate, may establish a period (other 

16 than the period described in clause (i)) for 

17 an episode of care under the pilot program. 

18 ‘‘(E) PHYSICIANS’ SERVICES.—The term 

19 ‘physicians’ services’ has the meaning given 

20 such term in section 1861(q). 

21 ‘‘(F) PILOT PROGRAM.—The term ‘pilot 

22 program’ means the pilot program under this 

23 section. 


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1 ‘‘(G) PROVIDER OF SERVICES.—The term 

2 ‘provider of services’ has the meaning given 

3 such term in section 1861(u). 

4 ‘‘(H) READMISSION.—The term ‘readmis5 sion’ has the meaning given such term in sec6 tion 1886(q)(3)(B). 

7 ‘‘(I) SUPPLIER.—The term ‘supplier’ has 

8 the meaning given such term in section 

9 1861(d). 

10 ‘‘(3) DEADLINE FOR IMPLEMENTATION.—The 

11 Secretary shall establish the pilot program not later 

12 than January 1, 2013. 

13 ‘‘(b) DEVELOPMENTAL PHASE.— 

14 ‘‘(1) DETERMINATION OF PATIENT ASSESS15 MENT INSTRUMENT.—The Secretary shall determine 

16 which patient assessment instrument (such as the 

17 Continuity Assessment Record and Evaluation 

18 (CARE) tool) shall be used under the pilot program 

19 to evaluate the applicable condition of an applicable 

20 beneficiary for purposes of determining the most 

21 clinically-appropriate site for the provision of post22 acute care to the applicable beneficiary. 

23 ‘‘(2) DEVELOPMENT OF QUALITY MEASURES

24 FOR AN EPISODE OF CARE AND FOR POST-ACUTE

25 CARE.— 


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1 ‘‘(A) IN GENERAL.—The Secretary, in con2 sultation with the Agency for Healthcare Re3 search and Quality and a qualified consensus4 based entity under section 1890C, shall develop 

5 quality measures for use in the pilot program— 

6 ‘‘(i) for episodes of care; and 

7 ‘‘(ii) for post-acute care. 

8 ‘‘(B) SITE-NEUTRAL POST-ACUTE CARE

9 QUALITY MEASURES.—Any quality measures 

10 developed under subparagraph (A)(ii) shall be 

11 site-neutral. 

12 ‘‘(C) COORDINATION WITH QUALITY MEAS13 URE DEVELOPMENT AND ENDORSEMENT PRO14 CEDURES.—The Secretary shall ensure that the 

15 development of quality measures under sub16 paragraph (A) is done in a manner that is con17 sistent with the measures developed and en18 dorsed under sections 1890B and 1890C that 

19 are applicable to all post-acute care settings. 

20 ‘‘(3) DETERMINATION OF APPLICATION OF

21 WAIVER AUTHORITY.—The Secretary shall determine 

22 which requirements of this title and title XI to waive 

23 under subsection (d) to carry out the pilot program 

24 . 

25 ‘‘(c) DETAILS.— 


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1 ‘‘(1) DURATION.— 

2 ‘‘(A) IN GENERAL.—Subject to subpara3 graph (B), the pilot program shall be conducted 

4 for a period of 5 years. 

5 ‘‘(B) EXTENSION.—The Secretary may ex6 tend the duration of the pilot program for pro7 viders of services and suppliers participating in 

8 the pilot program as of the day before the end 

9 of the 5-year period described in subparagraph 

10 (A), for a period determined appropriate by the 

11 Secretary, if the Secretary determines that such 

12 extension will result in any of the following con13 ditions being met: 

14 ‘‘(i) The extension of the pilot pro15 gram is expected to improve the quality of 

16 patient care without increasing expendi17 tures under this title. 

18 ‘‘(ii) The extension of the pilot pro19 gram is expected to reduce expenditures 

20 under this title without reducing the qual21 ity of patient care. 

22 ‘‘(2) PARTICIPATING PROVIDERS OF SERVICES

23 AND SUPPLIERS.— 

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (C), any provider of services or supplier, 


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1 including a hospital, a physician group, or an 

2 entity composed of 2 or more providers of serv3 ices or suppliers may submit an application to 

4 the Secretary to participate in the pilot pro5 gram. 

6 ‘‘(B) REQUIREMENTS.—The Secretary 

7 shall develop requirements for providers of serv8 ices, suppliers, and entities composed of 2 or 

9 more providers of services or suppliers to par10 ticipate in the pilot program. Such require11 ments shall ensure that applicable beneficiaries 

12 have an adequate choice of providers of services 

13 and suppliers under the pilot program. 

14 ‘‘(C) REQUIREMENTS FOR POST-ACUTE

15 ENTITIES.—An entity composed of 2 or more 

16 providers of services or suppliers may only par17 ticipate in the pilot program if the entity owns, 

18 operates, or contracts with an acute care hos19 pital for the furnishing of services for which a 

20 bundled payment is made under paragraph 

21 (3)(D). 

22 ‘‘(3) PAYMENT METHODOLOGY.— 

23 ‘‘(A) IN GENERAL.— 

24 ‘‘(i) ESTABLISHMENT OF PAYMENT

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1 ment rates under the pilot program for 

2 providers of services, suppliers, and entities 

3 participating in the pilot program at an 

4 amount that is equal to the average ex5 pected reimbursement under this title of 

6 providers of services, suppliers, and entities 

7 not participating in the pilot program for 

8 applicable services over an episode of care. 

9 ‘‘(ii) TESTING OF ALTERNATIVE PAY10 MENT METHODOLOGIES.—The Secretary 

11 shall test alternative payment methodolo12 gies under the pilot program, including 

13 bundled payments or arrangements in 

14 which providers of services, suppliers, and 

15 entities continue to receive reimbursement 

16 under payment systems that would other17 wise apply under this title, in accordance 

18 with this paragraph. 

19 ‘‘(B) ADJUSTMENT OF PAYMENTS.—Pay20 ments to participating providers of services, 

21 suppliers, and entities under the pilot program 

22 shall be adjusted for— 

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1 cluding having a major diagnosis of sub2 stance abuse or mental illness; and 

3 ‘‘(ii) resources needed to provide care, 

4 including an adjustment for differences in 

5 hospital average hourly wages, physician 

6 work, practice expense, malpractice ex7 pense, and geographic adjustment factors. 

8 ‘‘(C) INCLUSION OF CERTAIN SERVICES.— 

9 A payment methodology tested under the pilot 

10 program shall include payment for the fur11 nishing of applicable services and other appro12 priate services, such as care coordination, medi13 cation reconciliation, discharge planning, transi14 tional care services, and other patient-centered 

15 activities as determined appropriate by the Sec16 retary. 

17 ‘‘(D) BUNDLED PAYMENTS.— 

18 ‘‘(i) IN GENERAL.—A bundled pay19 ment under the pilot program shall— 

20 ‘‘(I) be comprehensive, covering 

21 the costs of applicable services and 

22 other appropriate services furnished to 

23 an individual during an episode of 

24 care (as determined by the Secretary), 

25 including the costs of any readmission 


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1 which would otherwise be subject to a 

2 payment adjustment under section 

3 1886(q)(5); and 

4 ‘‘(II) be made to a provider of 

5 services or supplier (or an entity com6 posed of 2 or more providers of serv7 ices or suppliers) participating in the 

8 pilot program. 

9 ‘‘(ii) REQUIREMENT FOR PROVISION

10 OF APPLICABLE SERVICES AND OTHER AP11 PROPRIATE SERVICES.—Applicable services 

12 and other appropriate services for which 

13 payment is made under this subparagraph 

14 shall be furnished or directed by a provider 

15 of services, supplier, or entity which is par16 ticipating under this title. 

17 ‘‘(iii) BUNDLED PAYMENT FOR APPLI18 CABLE CONDITIONS.—A bundled payment 

19 under the pilot program with respect to an 

20 applicable condition shall be based on the 

21 average of the amount of payment other22 wise made under this title to a hospital, a 

23 physician, other providers of services, and 

24 other suppliers for such services furnished 

25 to an applicable beneficiary with respect to 


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1 the applicable condition during an episode 

2 of care. 

3 ‘‘(iv) PAYMENT FOR EACH APPLICA4 BLE BENEFICIARY FURNISHED APPLICA5 BLE SERVICES DURING AN EPISODE OF

6 CARE.—A bundled payment under the pilot 

7 program shall be made to a provider of 

8 services, supplier, or entity with respect to 

9 each applicable beneficiary who is fur10 nished applicable services during an epi11 sode of care by the provider of services, 

12 supplier, or entity, regardless of whether 

13 the applicable beneficiary receives a certain 

14 level of physicians’ services or post-acute 

15 care services. 

16 ‘‘(E) EXEMPTION FROM PAYMENT ADJUST17 MENT FOR READMISSIONS.—In the case where 

18 the Secretary determines there is overlap be19 tween an applicable condition under the pilot 

20 program and a condition selected under para21 graph (2) of section 1886(q) for which there 

22 would otherwise be a payment adjustment 

23 under paragraph (5) of such section, the appli24 cable condition shall be exempt from such pay25 ment adjustment. 


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1 ‘‘(F) READMISSIONS TO A HOSPITAL

2 OTHER THAN THE HOSPITAL OF THE INITIAL

3 ADMISSION.— 

4 ‘‘(i) IN GENERAL.—Under the pilot 

5 program, in the case of the readmission of 

6 an applicable beneficiary to a hospital 

7 other than the hospital of the initial admis8 sion, the Secretary shall reimburse the hos9 pital of the readmission the amount of pay10 ment that would otherwise be made under 

11 this title for the readmission. 

12 ‘‘(ii) ADJUSTMENT OF BUNDLED PAY13 MENT.—In the case described in clause (i), 

14 the Secretary shall reduce the amount of 

15 the bundled payment under subparagraph 

16 (D) for the hospital of the initial admission 

17 by an amount equal to the amount paid to 

18 the hospital of the readmission under such 

19 clause. 

20 ‘‘(G) PAYMENT FOR POST-ACUTE CARE

21 SERVICES AFTER THE EPISODE OF CARE.—The 

22 Secretary shall establish procedures, in the case 

23 where an applicable beneficiary requires contin24 ued post-acute care services after the last day 

25 of the episode of care, under which the original 


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1 Medicare fee-for-service program under parts A 

2 and B covers post-acute care services furnished 

3 to the applicable beneficiary in an appropriate 

4 setting (as determined using the patient assess5 ment instrument under subsection (b)(1)). 

6 ‘‘(4) QUALITY MEASURES.— 

7 ‘‘(A) IN GENERAL.—The Secretary shall 

8 establish quality measures (including quality 

9 measures of process, outcome, and structure) 

10 related to care provided across all providers of 

11 services, suppliers, and entities participating in 

12 the pilot program. Quality measures established 

13 under the preceding sentence shall include 

14 measures of the following: 

15 ‘‘(i) An episode of care. 

16 ‘‘(ii) Functional status improvement. 

17 ‘‘(iii) Rates of readmission. 

18 ‘‘(iv) Rates of readmissions described 

19 in section 1861(q)(3)(B)(ii). 

20 ‘‘(v) Rates of return to the commu21 nity. 

22 ‘‘(vi) Rates of admission to an emer23 gency room after a hospitalization (as dis24 tinctly separate from rates described in 

25 clauses (iii) and (iv)). 


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1 ‘‘(vii) Efficiency measures. 

2 ‘‘(viii) Measures of patient3 centeredness of care. 

4 ‘‘(ix) Measures of patient perception 

5 of care. 

6 ‘‘(x) Measures to monitor and detect 

7 the under provision of necessary care. 

8 ‘‘(xi) Other measures, including meas9 ures of patient outcomes, determined ap10 propriate by the Secretary. 

11 ‘‘(B) RISK ADJUSTMENT.—Quality meas12 ures established under subparagraph (A) shall 

13 be risk-adjusted. 

14 ‘‘(C) REVISION OF QUALITY MEASURES.— 

15 The Secretary may revise quality measures so 

16 established (including adding new quality meas17 ures and retiring quality measures that are ob18 solete) as the Secretary determines appropriate 

19 with respect to applicable services and other ap20 propriate services provided to applicable bene21 ficiaries under the pilot program. 

22 ‘‘(D) REPORTING ON QUALITY MEAS23 URES.— 

24 ‘‘(i) IN GENERAL.—A provider of 

25 services, supplier, or entity described in 


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1 clause (ii) shall submit data to the Sec2 retary on quality measures established 

3 under subparagraph (A) during each year 

4 of the pilot program (in a form and man5 ner, subject to clause (iii), specified by the 

6 Secretary). 

7 ‘‘(ii) PROVIDER OF SERVICES, SUP8 PLIER, OR ENTITY DESCRIBED.—A pro9 vider of services, supplier, or entity de10 scribed in this clause is a provider of serv11 ices, supplier, or entity— 

12 ‘‘(I) participating in the pilot 

13 program; and 

14 ‘‘(II) who receives a bundled pay15 ment under paragraph (3)(D). 

16 ‘‘(iii) SUBMISSION OF DATA THROUGH

17 ELECTRONIC HEALTH RECORD.—To the 

18 extent practicable, the Secretary shall 

19 specify that data on measures be sub20 mitted under clause (i) through the use of 

21 an qualified electronic health record (as de22 fined in section 3000(13) of the Public 

23 Health Service Act (42 U.S.C. 300jj– 

24 11(13)) in a manner specified by the Sec25 retary. 


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1 ‘‘(d) WAIVER.—The Secretary may waive such provi2 sions of this title and title XI as may be necessary to carry 

3 out the pilot program. 

4 ‘‘(e) INDEPENDENT EVALUATION AND REPORTS ON

5 PILOT PROGRAM.— 

6 ‘‘(1) INDEPENDENT EVALUATION.— 

7 ‘‘(A) IN GENERAL.—The Secretary shall 

8 enter into a contract with an entity for the con9 duct of an independent evaluation of the pilot 

10 program, including an evaluation of whether 

11 and if so, the extent to which, the performance 

12 of providers of services, suppliers, and entities 

13 composed of 2 or more providers of services or 

14 suppliers participating in the pilot program has 

15 improved with respect to— 

16 ‘‘(i) quality measures established 

17 under subsection (c)(4)(A); 

18 ‘‘(ii) health outcomes; 

19 ‘‘(iii) applicable beneficiary access to 

20 care; and 

21 ‘‘(iv) financial outcomes. 

22 ‘‘(B) SUBMISSION OF REPORTS.—Such 

23 contract shall provide for the submission to the 

24 Secretary and Congress of the reports described 

25 in paragraph (2). 


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1 ‘‘(2) REPORTS BY ENTITY CONDUCTING INDE2 PENDENT EVALUATION.— 

3 ‘‘(A) INTERIM REPORT.—Not later than 2 

4 years after the implementation of the pilot pro5 gram, the entity with a contract under para6 graph (1) shall submit to the Secretary and to 

7 Congress a report on the initial results of the 

8 independent evaluation conducted under such 

9 paragraph. 

10 ‘‘(B) FINAL REPORT.—Not later than 3 

11 years after the implementation of the pilot pro12 gram, the entity described in subparagraph (A) 

13 shall submit to the Secretary and to Congress 

14 a report on the final results of such inde15 pendent evaluation. 

16 ‘‘(C) CONTENTS OF REPORT.—Each report 

17 submitted under this paragraph shall include an 

18 evaluation of— 

19 ‘‘(i) whether the performance of pro20 viders of services, suppliers, and entities 

21 participating in the pilot program has im22 proved with respect to— 

23 ‘‘(I) quality measures established 

24 under subsection (c)(4)(A); 

25 ‘‘(II) health outcomes; 


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1 ‘‘(III) applicable beneficiary ac2 cess to care; and 

3 ‘‘(IV) financial outcomes; and 

4 ‘‘(ii) if the evaluation under clause (i) 

5 determines such performance has im6 proved, the extent of such improvement. 

7 ‘‘(f) STUDY AND REPORT ON APPLICATION OF PILOT

8 PROGRAM TO SMALL RURAL HOSPITALS.— 

9 ‘‘(1) STUDY.—The Secretary, in consultation 

10 with representatives of small rural hospitals, includ11 ing critical access hospitals, shall conduct a study to 

12 determine appropriate and effective methods for 

13 such hospitals to participate in the pilot program or 

14 in a pilot program conducted in a similar manner 

15 under this title. Such study shall include consider16 ation of innovative methods of implementing bundled 

17 payments in hospitals described in the preceding 

18 sentence, taking into consideration any difficulties in 

19 doing so as a result of the low volume of services 

20 provided by such hospitals. 

21 ‘‘(2) REPORT.—Not later than 2 years after the 

22 date of enactment of this section, the Secretary shall 

23 submit to Congress a report containing the results 

24 of the study conducted under paragraph (1), to25 gether with recommendations for such legislation 


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1 and administrative action as the Secretary deter2 mines appropriate. 

3 ‘‘(3) DEFINITION OF SMALL RURAL HOS4 PITAL.—In this subsection, the term ‘small rural 

5 hospital’ means a hospital located in a rural area (as 

6 defined in section 1886(d)(2)(D)(ii)) with fewer than 

7 250 acute care inpatient beds. 

8 ‘‘(g) IMPLEMENTATION PLAN.— 

9 ‘‘(1) IN GENERAL.—Not later than January 1, 

10 2016, subject to paragraph (2), the Secretary shall 

11 submit a plan for the implementation of an expan12 sion of the pilot program by not later than January 

13 1, 2018, to an extent determined appropriate by the 

14 Secretary, if the Secretary determines that such ex15 pansion will result in any of the following conditions 

16 being met: 

17 ‘‘(A) The expansion of the pilot program is 

18 expected to improve the quality of patient care 

19 without increasing expenditures under this title. 

20 ‘‘(B) The expansion of the pilot program is 

21 expected to reduce expenditures under this title 

22 without reducing the quality of patient care.’’. 


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1 SEC. 3024. INDEPENDENCE AT HOME PILOT PROGRAM. 

2 Title XVIII of the Social Security Act, as amended 

3 by section 3023, is amended by inserting after section 

4 1866D the following new section: 

5 ‘‘INDEPENDENCE AT HOME MEDICAL PRACTICE PILOT

6 PROGRAM

7 ‘‘SEC. 1866E. (a) ESTABLISHMENT.— 

8 ‘‘(1) IN GENERAL.—The Secretary shall con9 duct a pilot program (in this section referred to as 

10 the ‘pilot program’) to test a payment incentive and 

11 service delivery model that utilizes physician and 

12 nurse practitioner directed home-based primary care 

13 teams designed to reduce expenditures and improve 

14 health outcomes in the provision of items and serv15 ices under this title to applicable beneficiaries (as 

16 defined in subsection (d)). 

17 ‘‘(2) REQUIREMENT.—The pilot program shall 

18 test whether a model described in paragraph (1), 

19 which is accountable for providing comprehensive, 

20 coordinated, continuous, and accessible care to high21 need populations at home and coordinating health 

22 care across all treatment settings, results in— 

23 ‘‘(A) reducing preventable hospitalizations; 

24 ‘‘(B) preventing hospital readmissions; 

25 ‘‘(C) reducing emergency room visits; 


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1 ‘‘(D) improving health outcomes commen2 surate with the beneficiaries’ stage of chronic 

3 illness; 

4 ‘‘(E) improving the efficiency of care, such 

5 as by reducing duplicative diagnostic and lab6 oratory tests; 

7 ‘‘(F) reducing the cost of health care serv8 ices covered under this title; and 

9 ‘‘(G) achieving beneficiary and family care10 giver satisfaction. 

11 ‘‘(b) INDEPENDENCE AT HOME MEDICAL PRAC12 TICE.— 

13 ‘‘(1) INDEPENDENCE AT HOME MEDICAL PRAC14 TICE DEFINED.—In this section: 

15 ‘‘(A) IN GENERAL.—The term ‘independ16 ence at home medical practice’ means a legal 

17 entity that— 

18 ‘‘(i) is comprised of an individual phy19 sician or nurse practitioner or group of 

20 physicians and nurse practitioners that 

21 provides care as part of a team that in22 cludes physicians, nurses, physician assist23 ants, pharmacists, and other health and 

24 social services staff as appropriate who 

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1 mary care to applicable beneficiaries, make 

2 in-home visits, and are available 24 hours 

3 per day, 7 days per week to carry out 

4 plans of care that are tailored to the indi5 vidual beneficiary’s chronic conditions and 

6 designed to achieve the results in sub7 section (a) and— 

8 ‘‘(ii) is organized at least in part for 

9 the purpose of providing physicians’ serv10 ices and has the medical training or experi11 ence to fulfill the physician’s role in clause 

12 (i); 

13 ‘‘(iii) has documented experience in 

14 providing home-based primary care serv15 ices to high cost chronically ill bene16 ficiaries, as determined appropriate by the 

17 Secretary; 

18 ‘‘(iv) has the capacity to provide serv19 ices covered by this section to at least 200 

20 applicable beneficiaries as defined in sub21 section (d); 

22 ‘‘(v) has entered into an agreement 

23 with the Secretary; 


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1 ‘‘(vi) uses electronic health informa2 tion systems, remote monitoring, and mo3 bile diagnostic technology; and 

4 ‘‘(vii) meets such other criteria as the 

5 Secretary determines to be appropriate to 

6 participate in the pilot program. 

7 An agreement described in clause (iv) shall re8 quire the entity to report on quality measures 

9 (in such form, manner, and frequency as speci10 fied by the Secretary, which may be for the 

11 group, for providers of services and suppliers, 

12 or both) and report to the Secretary (in a form, 

13 manner, and frequency as specified by the Sec14 retary) such data as the Secretary determines 

15 appropriate to monitor and evaluate the pilot 

16 program . 

17 ‘‘(B) PHYSICIAN.—The term ‘physician’ in18 cludes, except as the Secretary may otherwise 

19 provide, any individual who— 

20 ‘‘(i) furnishes services for which pay21 ment may be made as physicians’ services; 

22 and 

23 ‘‘(ii) has the medical training or expe24 rience to fulfill the physician’s role in 

25 (1)(A)(i). 


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1 ‘‘(2) PARTICIPATION OF NURSE PRACTITIONERS

2 AND PHYSICIAN ASSISTANTS.—Nothing in this sec3 tion shall be construed to prevent a nurse practi4 tioner or physician assistant from participating in, 

5 or leading, a home-based primary care team as part 

6 of an independence at home medical practice if— 

7 ‘‘(A) all the requirements of this section 

8 are met; 

9 ‘‘(B) the nurse practitioner or physician 

10 assistant, as the case may be, is acting con11 sistent with State law; and 

12 ‘‘(C) the nurse practitioner or physician 

13 assistant has the medical training or experience 

14 to fulfill the nurse practitioner or physician as15 sistant role in paragraph (1)(A)(i). 

16 ‘‘(3) INCLUSION OF PROVIDERS AND PRACTI17 TIONERS.—Nothing in this subsection shall be con18 strued as preventing an independence at home med19 ical practice from including a provider of services or 

20 a participating practitioner described in section 

21 1842(b)(18)(C) that is affiliated with the practice 

22 under an arrangement structured so that such pro23 vider of services or practitioner participates in the 

24 pilot program and shares in any savings under the 

25 pilot program. 


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1 ‘‘(4) QUALITY AND PERFORMANCE STAND2 ARDS.—The Secretary shall develop quality perform3 ance standards for independence at home medical 

4 practices participating in the pilot program. 

5 ‘‘(c) PAYMENT.— 

6 ‘‘(1) SHARED SAVINGS PAYMENT METHOD7 OLOGY.— 

8 ‘‘(A) ESTABLISHMENT OF TARGET SPEND9 ING LEVELS AND SHARED SAVINGS AMOUNTS.— 

10 ‘‘(i) TARGETS.—The Secretary shall 

11 establish annual target spending levels in 

12 such a manner as to account for normal 

13 variation in expenditures for items and 

14 services covered under parts A and B for 

15 each participating independence at home 

16 medical practices based upon the size of 

17 the practice, characteristics of the enrolled 

18 individuals, and such other factors as the 

19 Secretary determines appropriate. 

20 ‘‘(ii) DESIGNATION OF SAVINGS.—The 

21 Secretary shall designate annually the ag22 gregate amount of savings achieved for 

23 beneficiaries enrolled in independence at 

24 home medical practices. 


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1 ‘‘(iii) APPORTIONMENT OF SAVINGS.— 

2 The Secretary shall designate how, and to 

3 what extent, savings beyond the first 5 

4 percent are to be apportioned among par5 ticipating independence at home medical 

6 practices, taking into account the number 

7 of beneficiaries served by each practice, the 

8 characteristics of the individuals enrolled 

9 in each practice, the independence at home 

10 medical practices’ performance on quality 

11 performance measures, and such other fac12 tors as the Secretary determines appro13 priate. 

14 ‘‘(B) MINIMUM 5 PERCENT SAVINGS TO

15 THE MEDICARE PROGRAM.—The Secretary shall 

16 limit shared savings payments to each an inde17 pendence at home medical practice under this 

18 paragraph as necessary to ensure that the ag19 gregate expenditures for part A and B services 

20 with respect to applicable beneficiaries for such 

21 independence at home medical practice (inclu22 sive of shared savings payments) do not exceed 

23 the amount that the Secretary estimates, less 5 

24 percent, would be expended for such services for 

25 such beneficiaries enrolled in an independence 


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1 at home medical practice if the pilot program 

2 under this section were not implemented. 

3 ‘‘(d) APPLICABLE BENEFICIARIES.— 

4 ‘‘(1) DEFINITION.—In this section, the term 

5 ‘applicable beneficiary’ means, with respect to a 

6 qualifying independence at home medical practice, 

7 an individual who the practice has determined— 

8 ‘‘(A) is entitled to, or enrolled for, benefits 

9 under part A and enrolled for benefits under 

10 part B; 

11 ‘‘(B) is not enrolled in a Medicare Advan12 tage plan under part C, a PACE program 

13 under section 1894, or an ACO under section 

14 1899 or any other shared savings program 

15 under this title; 

16 ‘‘(C) has 2 or more chronic illnesses, such 

17 as congestive heart failure, diabetes, other de18 mentias designated by the Secretary, chronic 

19 obstructive pulmonary disease, ischemic heart 

20 disease, stroke, Alzheimer’s Disease and 

21 neurodegenerative diseases, and other diseases 

22 and conditions designated by the Secretary 

23 which result in high costs under this title; 

24 ‘‘(D) within the past 12 months has had a 

25 nonelective hospital admission and received 


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1 acute or subacute rehabilitation services or 

2 skilled home care services; 

3 ‘‘(E) has 2 or more functional depend4 encies requiring the assistance of another per5 son (such as bathing, dressing, toileting, walk6 ing, or feeding); and 

7 ‘‘(F) meets such other criteria as the Sec8 retary determines appropriate. 

9 ‘‘(2) PATIENT ELECTION TO PARTICIPATE.— 

10 The Secretary shall determine an appropriate meth11 od of ensuring that applicable beneficiaries have 

12 agreed to enroll in an independence at home medical 

13 practice. Enrollment in the pilot program shall be 

14 voluntary. 

15 ‘‘(3) BENEFICIARY ACCESS TO SERVICES.— 

16 Nothing in this section shall be construed as encour17 aging physicians or nurse practitioners to limit ap18 plicable beneficiary access to services covered under 

19 this title and applicable beneficiaries shall not be re20 quired to relinquish access to any benefit under this 

21 title as a condition of receiving services from an 

22 independence at home medical practice. 

23 ‘‘(e) IMPLEMENTATION.— 

24 ‘‘(1) STARTING DATE.—The pilot program shall 

25 begin not later than January 1, 2012. An agreement 


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1 with an independence at home medical practice 

2 under the pilot program may cover a 3-year period. 

3 ‘‘(2) NO PHYSICIAN DUPLICATION IN PILOT

4 PARTICIPATION.—The Secretary shall not pay an 

5 independence at home medical practice under this 

6 section that participates in section 1115A or section 

7 1866D. 

8 ‘‘(3) PREFERENCE.—In approving an independ9 ence at home medical practice, the Secretary shall 

10 give preference to practices that are— 

11 ‘‘(A) located in high-cost areas of the 

12 country; 

13 ‘‘(B) have experience in furnishing health 

14 care services to applicable beneficiaries in the 

15 home; and 

16 ‘‘(C) use electronic medical records, health 

17 information technology, and individualized plans 

18 of care. 

19 ‘‘(4) NUMBER OF PRACTICES.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), the Secretary shall enter into agree22 ments with as many qualified independence at 

23 home medial practices as practicable and con24 sistent with this subsection to test the potential 

25 of the independence at home medical practice 


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1 model under this section in order to achieve the 

2 results described in subsection (a)(2) across 

3 practices serving varying numbers of applicable 

4 beneficiaries. 

5 ‘‘(B) LIMITATION.—In selecting qualified 

6 independence at home medial practices to par7 ticipate under the pilot program, the Secretary 

8 shall limit the number of applicable bene9 ficiaries that may participate in the pilot pro10 gram to 10,000. 

11 ‘‘(5) WAIVER.—The Secretary may waive such 

12 provisions of this title and title XI as the Secretary 

13 determines necessary in order to implement the pilot 

14 program. 

15 ‘‘(6) ADMINISTRATION.—Chapter 35 of title 44, 

16 United States Code, shall not apply to this section. 

17 ‘‘(f) EVALUATION AND MONITORING.—The Secretary 

18 shall evaluate each independence at home medical practice 

19 under the pilot program to assess whether the practice 

20 achieved the results described in subsection (a)(2). 

21 ‘‘(g) REPORTS TO CONGRESS.—The Secretary shall 

22 conduct an independent evaluation of the pilot program 

23 and submit to Congress an interim and a final report.. 

24 Each report shall include an analysis of— 


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1 ‘‘(1) best practices under the pilot program; 

2 and 

3 ‘‘(2) the impact of the pilot program on— 

4 ‘‘(A) coordination of care; 

5 ‘‘(B) expenditures under this title; 

6 ‘‘(C) access to services; and 

7 ‘‘(D) the quality of health care services 

8 provided to applicable beneficiaries; and 

9 ‘‘(E) Such other areas determined appro10 priate by the Secretary. 

11 ‘‘(h) EXPANSION TO PROGRAM; IMPLEMENTATION.— 

12 ‘‘(1) TESTING AND REFINEMENT OF PAYMENT

13 INCENTIVE AND SERVICE DELIVERY MODELS.—Sub14 ject to the evaluation described in subsection (g), the 

15 Secretary may enter into agreements under the pilot 

16 program with additional qualifying independence at 

17 home medical practices to further test and refine 

18 models with respect to qualifying independence at 

19 home medical practices. 

20 ‘‘(2) EXPANDING USE OF SUCCESSFUL MODELS

21 TO PROGRAM IMPLEMENTATION.—Taking into ac22 count the results of the evaluations under sub23 sections (f) and (g), the Secretary may issue regula24 tions to implement, on a permanent (and if appro25 priate, on a nationwide) basis, the independence at 


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1 home medical practice model if, and to the extent 

2 that— 

3 ‘‘(A) such models are beneficial to the pro4 gram under this title, as determined by the Sec5 retary; and 

6 ‘‘(B) the Chief Actuary of the Centers for 

7 Medicare & Medicaid Services certifies that 

8 such model would result in estimated expendi9 tures for part A and B items and services are 

10 at least 5 percent less than the expenditures 

11 that would be otherwise be made for such items 

12 and services in the absence of such expansion, 

13 as estimated by Chief Actuary. 

14 ‘‘(i) FUNDING.—For purposes of administering and 

15 carrying out the pilot program, other than for payments 

16 for items and services furnished under this title and 

17 shared savings under subsection (c), in addition to funds 

18 otherwise appropriated, the Secretary shall provide for the 

19 transfer, from the Federal Hospital Insurance Trust Fund 

20 under section 1817 and the Federal Supplementary Med21 ical Insurance Trust Fund under section 1841, in such 

22 proportion as the Secretary determines appropriate, of 

23 $5,000,000 to the Centers for Medicare & Medicaid Serv24 ices Program Management Account for each of fiscal years 


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1 2010 through 2015. Amounts appropriated under the pre2 ceding sentence shall remain available until expended.’’. 

3 SEC. 3025. HOSPITAL READMISSIONS REDUCTION PRO4 GRAM. 

5 Section 1886 of the Social Security Act (42 U.S.C. 

6 1395ww), as amended by section 3001 and 3008, is 

7 amended by adding at the end the following new sub8 section: 

9 ‘‘(q) HOSPITAL READMISSIONS REDUCTION PRO10 GRAM.— 

11 ‘‘(1) ESTABLISHMENT.— 

12 ‘‘(A) IN GENERAL.—Subject to the suc13 ceeding provisions of this subsection, the Sec14 retary shall establish a hospital readmissions re15 duction program (in this subsection referred to 

16 as the ‘Program’) under which payments to 

17 subsection (d) hospitals are reduced under 

18 paragraph (5) for certain readmissions. 

19 ‘‘(B) PROGRAM TO BEGIN IN FISCAL YEAR

20 2013.—The Program shall apply to payments 

21 for discharges occurring on or after October 1, 

22 2012. 

23 ‘‘(C) DEFINITION OF SUBSECTION (D) HOS24 PITAL.—For purposes of this subsection, the 


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1 term ‘subsection (d) hospital’ has the meaning 

2 given such term in subsection (d)(1)(B)). 

3 ‘‘(2) SELECTION OF CONDITIONS ASSOCIATED

4 WITH READMISSIONS.— 

5 ‘‘(A) INITIAL SET.—Beginning during fis6 cal year 2012, the Secretary shall select 8 con7 ditions that have a high volume or high rate, or 

8 both, of potentially preventable inpatient hos9 pital readmissions, as determined by the Sec10 retary. 

11 ‘‘(B) EXPANSION.—For fiscal year 2016 

12 and subsequent fiscal years, the Secretary may 

13 expand the list of conditions selected under sub14 paragraph (A). In selecting conditions under 

15 the preceding sentence, the Secretary shall take 

16 into account whether— 

17 ‘‘(i) the condition has a high volume 

18 or high rate, or both, of potentially pre19 ventable inpatient hospital readmissions; 

20 and 

21 ‘‘(ii) the condition has high expendi22 tures under this title. 

23 ‘‘(3) DETERMINATION OF RISK-ADJUSTED NA24 TIONAL AVERAGE AND HOSPITAL-SPECIFIC READMIS25 SION RATES FOR EACH SELECTED CONDITION.— 


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1 ‘‘(A) IN GENERAL.—Before the beginning 

2 of the fiscal year involved under the Program, 

3 the Secretary shall calculate the following: 

4 ‘‘(i) A national average readmission 

5 rate related to each condition selected 

6 under paragraph (2). Such rate shall be a 

7 weighted average of all diagnosis-related 

8 groups related to the condition. Such rate 

9 shall be risk-adjusted for patient severity 

10 of illness and other patient characteristics 

11 as the Secretary determines appropriate. 

12 ‘‘(ii) A hospital-specific hospital read13 mission rate related to each condition se14 lected under paragraph (2). Such rate shall 

15 be risk-adjusted in the same manner as the 

16 rate under clause (i) is risk-adjusted. 

17 ‘‘(B) READMISSION DEFINED.— 

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

19 (ii), for purposes of this subsection, the 

20 term ‘readmission’ means, in the case of 

21 an individual who is discharged from a 

22 subsection (d) hospital, the admission of 

23 the individual to the same or another hos24 pital or a critical access hospital within 30 

25 days from the date of such discharge. 


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1 ‘‘(ii) EXCLUSIONS.—The term ‘read2 mission’ does not include— 

3 ‘‘(I) a planned readmission; 

4 ‘‘(II) a readmission related to 

5 major or metastatic malignancies, 

6 burn care, or trauma care; 

7 ‘‘(III) a readmission where the 

8 original admission was with a dis9 charge status of ‘left against medical 

10 advice’; and 

11 ‘‘(IV) a transfer from another 

12 hospital. 

13 ‘‘(4) ASSIGNMENT OF HOSPITALS.—With re14 spect to each fiscal year the Secretary shall— 

15 ‘‘(A) rank all subsection (d) hospitals 

16 based on the national average and hospital-spe17 cific readmission rate calculated under para18 graph (3) for a period specified by the Sec19 retary for each condition selected under para20 graph (2); and 

21 ‘‘(B) identify the quartile of such hospitals 

22 with the highest readmission rates for each 

23 such condition. 

24 ‘‘(5) PAYMENT ADJUSTMENT.— 


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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graphs (B) and (C), for discharges occurring in 

3 a fiscal year beginning on or after October 1, 

4 2013, if an individual is readmitted (as defined 

5 in paragraph (3)(B)) and the prior discharge 

6 from the subsection (d) hospital is related to a 

7 condition selected under paragraph (2) for the 

8 fiscal year, the Secretary shall reduce the pay9 ment amount for the prior discharge under sub10 section (d) by an amount equal to the applica11 ble percent (as defined in subparagraph (C)) of 

12 the payment amount for the discharge under 

13 subsection (d) (determined without regard to 

14 the application of this paragraph). 

15 ‘‘(B) EXCEPTION.—The payment adjust16 ment under this paragraph for a discharge in a 

17 fiscal year shall only apply to a subsection (d) 

18 hospital that is identified under paragraph 

19 (4)(B) for the fiscal year with respect to the 

20 condition that is related to such discharge. 

21 ‘‘(C) NO EFFECT IN SUBSEQUENT FISCAL

22 YEARS.—The payment reductions under sub23 paragraph (A) shall apply only with respect to 

24 the fiscal year involved, and the Secretary shall 

25 not take into account such payment reductions 


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1 in making payments to a subsection (d) hospital 

2 under this section in a subsequent fiscal year. 

3 ‘‘(D) APPLICABLE PERCENT.—In this 

4 paragraph, the term ‘applicable percent’ 

5 means— 

6 ‘‘(i) in the case of a readmission that 

7 occurs within 7 days of the prior dis8 charge, 20 percent; and 

9 ‘‘(ii) in the case of a readmission that 

10 occurs within 15 days of the prior dis11 charge, 10 percent. 

12 ‘‘(6) REPORTING TO HOSPITALS.—Prior to each 

13 fiscal year under the Program (and prior to the fis14 cal year preceding the first fiscal year under the 

15 Program), the Secretary shall provide confidential 

16 reports to subsection (d) hospitals with respect to 

17 the national average and hospital-specific readmis18 sion rates for each condition selected under para19 graph (2). 

20 ‘‘(7) REPORTING HOSPITAL SPECIFIC INFORMA21 TION.— 

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

23 make information available to the public re24 garding readmission rates of each subsection 

25 (d) hospital under the Program. 


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1 ‘‘(B) OPPORTUNITY TO REVIEW AND SUB2 MIT CORRECTIONS.—The Secretary shall ensure 

3 that a subsection (d) hospital has the oppor4 tunity to review, and submit corrections for, the 

5 information to be made public with respect to 

6 the hospital under subparagraph (A) prior to 

7 such information being made public. 

8 ‘‘(C) WEBSITE.—Such information shall be 

9 posted on the Hospital Compare Internet 

10 website in an easily understandable format. 

11 ‘‘(8) LIMITATIONS ON REVIEW.—There shall be 

12 no administrative or judicial review under section 

13 1869, section 1878, or otherwise of the following: 

14 ‘‘(A) The determination of the payment 

15 amount for the prior discharge under sub16 section (d) under paragraph (5)(A). 

17 ‘‘(B) The methodology for selecting condi18 tions under paragraph (2), determining rates 

19 under paragraph (4), and making adjustments 

20 under paragraph (5). 

21 ‘‘(C) The provision of reports to subsection 

22 (d) hospitals under paragraph (6) and the in23 formation made available to the public under 

24 paragraph (7).’’. 


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1 SEC. 3026. COMMUNITY-BASED CARE TRANSITIONS PRO2 GRAM. 

3 (a) IN GENERAL.—The Secretary shall establish a 

4 Community-Based Care Transitions Program under which 

5 the Secretary provides funding to eligible entities that fur6 nish improved care transition services to high-risk Medi7 care beneficiaries. 

8 (b) DEFINITIONS.—In this section: 

9 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti10 ty’’ means the following: 

11 (A) A subsection (d) hospital (as defined in 

12 section 1886(d)(1)(B) of the Social Security 

13 Act (42 U.S.C. 1395ww(d)(1)(B))) identified by 

14 the Secretary as having a high readmission 

15 rate, such as a hospital-specific hospital read16 mission rate above the 75th percentile (as cal17 culated under paragraph (3)(A)(ii) of section 

18 1886(q) of the Social Security Act, as added by 

19 section 3025) for conditions selected under 

20 paragraph (2) of such section 1886(q). 

21 (B) An appropriate community-based orga22 nization that is capable of providing care transi23 tion services under this section, including the 

24 ability to have arrangements with subsection 

25 (d) hospitals (as so defined) to furnish the serv26 ices described in subsection (c)(2)(B)(i). 


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1 (2) HIGH-RISK MEDICARE BENEFICIARY.—The 

2 term ‘‘high-risk Medicare beneficiary’’ means a 

3 Medicare beneficiary who has attained a minimum 

4 hierarchical condition category score, as determined 

5 by the Secretary, based on a diagnosis of multiple 

6 chronic conditions or other risk factors associated 

7 with a hospital readmission or substandard transi8 tion into post-hospitalization care, which may in9 clude 1 or more of the following: 

10 (A) Cognitive impairment. 

11 (B) Depression. 

12 (C) A history of multiple readmissions. 

13 (D) Any other chronic disease or risk fac14 tor as determined by the Secretary. 

15 (3) MEDICARE BENEFICIARY.—The term 

16 ‘‘Medicare beneficiary’’ means an individual who is 

17 entitled to benefits under part A of title XVIII of 

18 the Social Security Act (42 U.S.C. 1395 et seq.) and 

19 enrolled under part B of such title, but not enrolled 

20 under part C of such title. 

21 (4) PROGRAM.—The term ‘‘program’’ means 

22 the program conducted under this section. 

23 (5) READMISSION.—The term ‘‘readmission’’ 

24 has the meaning given such term in section 


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1 1886(q)(3)(B) of the Social Security Act, as added 

2 by section 3025. 

3 (6) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of Health and Human Services. 

5 (c) REQUIREMENTS.— 

6 (1) DURATION.— 

7 (A) IN GENERAL.—The program shall be 

8 conducted for a 5-year period, beginning not 

9 later than January 1, 2011. 

10 (B) EXPANSION.—The Secretary may ex11 pand the duration and the scope of the pro12 gram, to the extent determined appropriate by 

13 the Secretary, if the Secretary determines (and 

14 the Chief Actuary of the Centers for Medicare 

15 & Medicaid Services, with respect to spending 

16 under this title, certifies) that such expansion 

17 would reduce spending under this title without 

18 reducing quality. 

19 (2) APPLICATION; PARTICIPATION.— 

20 (A) IN GENERAL.— 

21 (i) APPLICATION.—An eligible entity 

22 seeking to participate in the program shall 

23 submit an application to the Secretary at 

24 such time, in such manner, and containing 


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1 such information as the Secretary may re2 quire. 

3 (ii) PARTNERSHIP.—If an eligible en4 tity is a hospital, such hospital shall enter 

5 into a partnership with a community-based 

6 organization to participate in the program. 

7 (B) INTERVENTION PROPOSAL.—Subject 

8 to subparagraph (C), an application submitted 

9 under subparagraph (A)(i) shall include a de10 tailed proposal for at least 1 care transition 

11 intervention, which may include the following: 

12 (i) Initiating care transition services 

13 for a high-risk Medicare beneficiary not 

14 later than 24 hours prior to the discharge 

15 of the beneficiary from the eligible entity. 

16 (ii) Arranging timely post-discharge 

17 follow-up services to the high-risk Medicare 

18 beneficiary to provide the beneficiary (and, 

19 as appropriate, the primary caregiver of 

20 the beneficiary) with information regarding 

21 responding to symptoms that may indicate 

22 additional health problems or a deterio23 rating condition. 

24 (iii) Providing the high-risk Medicare 

25 beneficiary (and, as appropriate, the priVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00803 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 mary caregiver of the beneficiary) with as2 sistance to ensure productive and timely 

3 interactions with post-acute and outpatient 

4 providers. 

5 (iv) Assessing and actively engaging 

6 with a high-risk Medicare beneficiary (and, 

7 as appropriate, the primary caregiver of 

8 the beneficiary) through the provision of 

9 self-management support and relevant in10 formation that is specific to the bene11 ficiary’s condition. 

12 (v) Conducting comprehensive medica13 tion review and management (including, if 

14 appropriate, self-management support). 

15 (C) LIMITATION.—A care transition inter16 vention proposed under subparagraph (B) may 

17 not include services required under the dis18 charge planning process described in section 

19 1861(ee) of the Social Security Act (42 U.S.C. 

20 1395x(ee)). 

21 (3) SELECTION.—In selecting eligible entities to 

22 participate in the program, the Secretary shall give 

23 priority to eligible entities that provide services to 

24 medically underserved populations, small commu25 nities, and rural areas. 


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1 (d) IMPLEMENTATION.—Notwithstanding any other 

2 provision of law, the Secretary may implement the provi3 sions of this section by program instruction or otherwise. 

4 (e) WAIVER AUTHORITY.—The Secretary may waive 

5 such requirements of titles XI and XVIII of the Social 

6 Security Act as may be necessary to carry out the pro7 gram. 

8 (f) FUNDING.—For purposes of carrying out this sec9 tion, the Secretary of Health and Human Services shall 

10 provide for the transfer, from the Federal Hospital Insur11 ance Trust Fund under section 1817 of the Social Secu12 rity Act (42 U.S.C. 1395i) and the Federal Supple13 mentary Medical Insurance Trust Fund under section 

14 1841 of such Act (42 U.S.C. 1395t), in such proportion 

15 as the Secretary determines appropriate, of $500,000,000, 

16 to the Centers for Medicare & Medicaid Services Program 

17 Management Account for the period of fiscal years 2011 

18 through 2015. Amounts transferred under the preceding 

19 sentence shall remain available until expended. 

20 SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION. 

21 (a) IN GENERAL.—Subsection (d)(3) of section 5007 

22 of the Deficit Reduction Act of 2005 (Public Law 109– 

23 171) is amended by inserting ‘‘(or September 30, 2011, 

24 in the case of a demonstration project in operation as of 

25 October 1, 2008)’’ after ‘‘December 31, 2009’’. 


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1 (b) FUNDING.— 

2 (1) IN GENERAL.—Subsection (f)(1) of such 

3 section is amended by inserting ‘‘and for fiscal year 

4 2010, $1,600,000,’’ after ‘‘$6,000,000,’’. 

5 (2) AVAILABILITY.—Subsection (f)(2) of such 

6 section is amended by striking ‘‘2010’’ and inserting 

7 ‘‘2014 or until expended’’. 

8 (c) REPORTS.— 

9 (1) QUALITY IMPROVEMENT AND SAVINGS.— 

10 Subsection (e)(3) of such section is amended by 

11 striking ‘‘December 1, 2008’’ and inserting ‘‘March 

12 31, 2011’’. 

13 (2) FINAL REPORT.—Subsection (e)(4) of such 

14 section is amended by striking ‘‘May 1, 2010’’ and 

15 inserting ‘‘March 31, 2013’’. 

16 PART IV—STRENGTHENING PRIMARY CARE AND 

17 OTHER WORKFORCE IMPROVEMENTS 

18 SEC. 3031. EXPANDING ACCESS TO PRIMARY CARE SERV19 ICES AND GENERAL SURGERY SERVICES. 

20 (a) INCENTIVE PAYMENT PROGRAM FOR PRIMARY

21 CARE SERVICES.— 

22 (1) IN GENERAL.—Section 1833 of the Social 

23 Security Act (42 U.S.C. 1395l) is amended by add24 ing at the end the following new subsection: 


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1 ‘‘(x) INCENTIVE PAYMENTS FOR PRIMARY CARE

2 SERVICES.— 

3 ‘‘(1) IN GENERAL.—In the case of primary care 

4 services furnished on or after January 1, 2011, and 

5 before January 1, 2016, by a primary care practi6 tioner, in addition to the amount of payment that 

7 would otherwise be made for such services under this 

8 part, there also shall be paid (on a monthly or quar9 terly basis) an amount equal to 10 percent of the 

10 payment amount for the service under this part. 

11 ‘‘(2) DEFINITIONS.—In this subsection: 

12 ‘‘(A) PRIMARY CARE PRACTITIONER.—The 

13 term ‘primary care practitioner’ means an indi14 vidual— 

15 ‘‘(i) who— 

16 ‘‘(I) is a physician (as described 

17 in section 1861(r)(1)) who has a pri18 mary specialty designation of family 

19 medicine, internal medicine, geriatric 

20 medicine, or pediatric medicine; or 

21 ‘‘(II) is a nurse practitioner, clin22 ical nurse specialist, or physician as23 sistant (as those terms are defined in 

24 section 1861(aa)(5)); and 


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1 ‘‘(ii) for whom primary care services 

2 accounted for at least 60 percent of the al3 lowed charges under this part for such 

4 physician or practitioner in a prior period 

5 as determined appropriate by the Sec6 retary. 

7 ‘‘(B) PRIMARY CARE SERVICES.—The term 

8 ‘primary care services’ means services identi9 fied, as of January 1, 2009, by the following 

10 HCPCS codes (and as subsequently modified by 

11 the Secretary): 

12 ‘‘(i) 99201 through 99215. 

13 ‘‘(ii) 99304 through 99340. 

14 ‘‘(iii) 99341 through 99350. 

15 ‘‘(3) COORDINATION WITH OTHER PAY16 MENTS.—The amount of the additional payment for 

17 a service under this subsection and subsection (m) 

18 shall be determined without regard to any additional 

19 payment for the service under subsection (m) and 

20 this subsection, respectively. 

21 ‘‘(4) LIMITATION ON REVIEW.—There shall be 

22 no administrative or judicial review under section 

23 1869, 1878, or otherwise, respecting the identifica24 tion of primary care practitioners under this sub25 section.’’. 


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1 (2) CONFORMING AMENDMENT.—Section 

2 1834(g)(2)(B) of the Social Security Act (42 U.S.C. 

3 1395m(g)(2)(B)) is amended by adding at the end 

4 the following sentence: ‘‘Section 1833(x) shall not be 

5 taken into account in determining the amounts that 

6 would otherwise be paid pursuant to the preceding 

7 sentence.’’. 

8 (b) INCENTIVE PAYMENT PROGRAM FOR MAJOR

9 SURGICAL PROCEDURES FURNISHED IN HEALTH PRO10 FESSIONAL SHORTAGE AREAS.— 

11 (1) IN GENERAL.—Section 1833 of the Social 

12 Security Act (42 U.S.C. 1395l), as amended by sub13 section (a)(1), is amended by adding at the end the 

14 following new subsection: 

15 ‘‘(y) INCENTIVE PAYMENTS FOR MAJOR SURGICAL

16 PROCEDURES FURNISHED IN HEALTH PROFESSIONAL

17 SHORTAGE AREAS.— 

18 ‘‘(1) IN GENERAL.—In the case of major sur19 gical procedures furnished on or after January 1, 

20 2011, and before January 1, 2016, by a general sur21 geon in an area that is designated (under section 

22 332(a)(1)(A) of the Public Health Service Act) as a 

23 health professional shortage area as identified by the 

24 Secretary prior to the beginning of the year involved, 

25 in addition to the amount of payment that would 


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1 otherwise be made for such services under this part, 

2 there also shall be paid (on a monthly or quarterly 

3 basis) an amount equal to 10 percent of the pay4 ment amount for the service under this part. 

5 ‘‘(2) DEFINITIONS.—In this subsection: 

6 ‘‘(A) GENERAL SURGEON.—In this sub7 section, the term ‘general surgeon’ means a 

8 physician (as described in section 1861(r)(1)) 

9 who has designated CMS specialty code 02– 

10 General Surgery as their primary specialty code 

11 in the physician’s application granted by the 

12 Secretary for a supplier number for the submis13 sion of claims for reimbursement under this 

14 title. 

15 ‘‘(B) MAJOR SURGICAL PROCEDURES.— 

16 The term ‘major surgical procedures’ means 

17 physicians’ services which are surgical proce18 dures for which a 10-day or 90-day global pe19 riod is used for payment under the fee schedule 

20 under section 1848(b). 

21 ‘‘(3) COORDINATION WITH OTHER PAY22 MENTS.—The amount of the additional payment for 

23 a service under this subsection and subsection (m) 

24 shall be determined without regard to any additional 


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1 payment for the service under subsection (m) and 

2 this subsection, respectively. 

3 ‘‘(4) APPLICATION.—The provisions of para4 graph (2) and (4) of subsection (m) shall apply to 

5 the determination of additional payments under this 

6 subsection in the same manner as such provisions 

7 apply to the determination of additional payments 

8 under subsection (m).’’. 

9 (2) CONFORMING AMENDMENT.—Section 

10 1834(g)(2)(B) of the Social Security Act (42 U.S.C. 

11 1395m(g)(2)(B)), as amended by subsection (a)(2), 

12 is amended by striking ‘‘Section 1833(x)’’ and in13 serting ‘‘Subsections (x) and (y) of section 1833’’ in 

14 the last sentence. 

15 (c) BUDGET-NEUTRALITY ADJUSTMENT.—Section 

16 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 

17 1395w–4(c)(2)(B)) is amended by adding at the end the 

18 following new clause: 

19 ‘‘(vii) ADJUSTMENT FOR CERTAIN

20 PHYSICIAN INCENTIVE PAYMENTS.—Fifty 

21 percent of the additional expenditures 

22 under this part attributable to subsections 

23 (x) and (y) of section 1833 for a year (as 

24 estimated by the Secretary) shall be taken 

25 into account in applying clause (ii)(II) for 


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1 2011 and subsequent years. In lieu of ap2 plying the budget-neutrality adjustments 

3 required under clause (ii)(II) to relative 

4 value units to account for such costs for 

5 the year, the Secretary shall apply such 

6 budget-neutrality adjustments to the con7 version factor otherwise determined for the 

8 year. For 2011 and subsequent years, the 

9 Secretary shall increase the incentive pay10 ment otherwise applicable under section 

11 1833(m) by a percent estimated to be 

12 equal to the additional expenditures esti13 mated under the first sentence of this 

14 clause for such year that is applicable to 

15 physicians who primarily furnish services 

16 in areas designated (under section 

17 332(a)(1)(A) of the Public Health Service 

18 Act) as health professional shortage 

19 areas.’’. 

20 SEC. 3031A. MEDICARE FEDERALLY QUALIFIED HEALTH 

21 CENTER IMPROVEMENTS. 

22 (a) EXPANSION OF MEDICARE-COVERED PREVEN23 TIVE SERVICES AT FEDERALLY QUALIFIED HEALTH

24 CENTERS.— 


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1 (1) IN GENERAL.—Section 1861(aa)(3)(A) of 

2 the Social Security Act (42 U.S.C. 1395w 

3 (aa)(3)(A)) is amended to read as follows:

4 ‘‘(A) services of the type described sub5 paragraphs (A) through (C) of paragraph (1) 

6 and preventive services (as defined in section 

7 1861(ddd)(3)); and’’. 

8 (2) EFFECTIVE DATE.—The amendment made 

9 by paragraph (1) shall apply to services furnished on 

10 or after January 1, 2011. 

11 (b) ESTABLISHMENT OF A MEDICARE PROSPECTIVE

12 PAYMENT SYSTEM FOR FEDERALLY QUALIFIED HEALTH

13 CENTER SERVICES.— 

14 (1) IN GENERAL.—Paragraph (3) section 

15 1833(a) of the Social Security Act (42 U.S.C. 

16 1395l(a)) is amended to read as follows: 

17 ‘‘(3)(A) in the case of services described in sec18 tion 1832(a)(2)(D)(i), the costs which are reason19 able and related to the furnishing of such services or 

20 which are based on such other tests of reasonable21 ness as the Secretary may prescribe in regulations 

22 including those authorized under section 

23 1861(v)(1)(A), less the amount a provider may 

24 charge as described in clause (ii) of section 


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1 1866(a)(2)(A), but in no case may the payment for 

2 such services (other than for items and services de3 scribed in section 1861(s)(10)(A)) exceed 80 percent 

4 of such costs; and 

5 ‘‘(B) in the case of services described in section 

6 1832(a)(2)(D)(ii) furnished by a Federally qualified 

7 health center— 

8 ‘‘(i) subject to clauses (iii) and (iv), for 

9 services furnished on and after January 1, 

10 2012, during the center’s fiscal year that ends 

11 in 2012, an amount (calculated on a per visit 

12 basis) that is equal to 100 percent of the aver13 age of the costs of the center of furnishing such 

14 services during such center’s fiscal years ending 

15 during 2010 and 2011 which are reasonable 

16 and related to the cost of furnishing such serv17 ices, or which are based on such other tests of 

18 reasonableness as the Secretary prescribes in 

19 regulations including those authorized under 

20 section 1861(v)(1)(A) (except that in calcu21 lating such cost in a center’s fiscal years ending 

22 during 2010 and 2011 and applying the aver23 age of such cost for a center’s fiscal year end24 ing during fiscal year 2012, the Secretary shall 

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1 tivity screen), less the amount a provider may 

2 charge as described in clause (ii) of section 

3 1866(a)(2)(A), but in no case may the payment 

4 for such services (other than for items or serv5 ices described in section 1861(s)(10)(A)) exceed 

6 80 percent of such average of such costs; 

7 ‘‘(ii) subject to clauses (iii) and (iv), for 

8 services furnished during the center’s fiscal 

9 year ending during 2013 or a succeeding fiscal 

10 year, an amount (calculated on a per visit basis 

11 and without the application of a per visit limit 

12 or productivity screen) that is equal to the 

13 amount determined under this subparagraph 

14 for the center’s preceding fiscal year (without 

15 regard to any copayment)— 

16 ‘‘(I) increased for a center’s fiscal 

17 year ending during 2013 by the percentage 

18 increase in the MEI (as defined in section 

19 1842(i)(3)) applicable to primary care 

20 services (as defined in section 1842(i)(4)) 

21 for 2013 and increased for a center’s fiscal 

22 year ending during 2014 or any succeeding 

23 fiscal year by the percentage increase for 

24 such year of a market basket of Federally 

25 qualified health center costs as developed 


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1 and promulgated through regulations by 

2 the Secretary; and 

3 ‘‘(II) adjusted to take into account 

4 any increase or decrease in the scope of 

5 services, including a change in the type, in6 tensity, duration, or amount of services, 

7 furnished by the center during the center’s 

8 fiscal year, 

9 less the amount a provider may charge as described 

10 in clause (ii) of section 1866(a)(2)(A), but in no 

11 case may the payment for such services (other than 

12 for items or services described in section 

13 1861(s)(10)(A)) exceed 80 percent of the amount 

14 determined under this clause (without regard to any 

15 copayment); 

16 ‘‘(iii) subject to clause (iv), in the case of 

17 an entity that first qualifies as a Federally 

18 qualified health center in a center’s fiscal year 

19 ending after 2011— 

20 ‘‘(I) for the first such center’s fiscal 

21 year, an amount (calculated on a per visit 

22 basis and without the application of a per 

23 visit payment limit or productivity screen) 

24 that is equal to 100 percent of the costs of 

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1 ter’s fiscal year based on the per visit pay2 ment rates established under clause (i) or 

3 (ii) for a comparable period for other such 

4 centers located in the same or adjacent 

5 areas with a similar caseload or, in the ab6 sence of such a center, in accordance with 

7 the regulations and methodology referred 

8 to in clause (i) or based on such other 

9 tests of reasonableness (without the appli10 cation of a per visit payment limit or pro11 ductivity screen) as the Secretary may 

12 specify, less the amount a provider may 

13 charge as described in clause (ii) of section 

14 1866(a)(2)(A), but in no case may the 

15 payment for such services (other than for 

16 items and services described in section 

17 1861(s)(10)(A)) exceed 80 percent of such 

18 costs; and 

19 ‘‘(II) for each succeeding center’s fis20 cal year, the amount calculated in accord21 ance with clause (ii); and 

22 ‘‘(iv) with respect to Federally qualified 

23 health center services that are furnished to an 

24 individual enrolled with a Medicare Advantage 

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1 ment described in section 1853(a)(4) (or, in the 

2 case of a Medicare Advantage private fee-for3 service plan, without such written agreement) 

4 the amount (if any) by which— 

5 ‘‘(I) the amount of payment that 

6 would have otherwise been provided under 

7 clause (i), (ii), or (iii) (calculated as if ‘100 

8 percent’ were substituted for ‘80 percent’ 

9 in such clauses) for such services if the in10 dividual had not been enrolled; exceeds 

11 ‘‘(II) the amount of the payments re12 ceived under such written agreement (or, 

13 in the case of Medicare Advantage private 

14 fee-for-service plans, without such written 

15 agreement) for such services (not including 

16 any financial incentives provided for in 

17 such agreement such as risk pool pay18 ments, bonuses, or withholds) less the 

19 amount the Federally qualified health cen20 ter may charge as described in section 

21 1857(e)(3)(B);’’. 

22 (2) EFFECTIVE DATE.—The amendment made 

23 by paragraph (1) shall apply to services furnished on 

24 or after January 1, 2012. 


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1 SEC. 3032. DISTRIBUTION OF ADDITIONAL RESIDENCY PO2 SITIONS. 

3 (a) IN GENERAL.—Section 1886(h) of the Social Se4 curity Act (42 U.S.C. 1395ww(h)) is amended— 

5 (1) in paragraph (4)(F)(i), by striking ‘‘para6 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

7 (2) in paragraph (4)(H)(i), by striking ‘‘para8 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

9 and 

10 (3) by adding at the end the following new 

11 paragraph: 

12 ‘‘(8) DISTRIBUTION OF ADDITIONAL RESIDENCY

13 POSITIONS.— 

14 ‘‘(A) REDUCTIONS IN LIMIT BASED ON UN15 USED POSITIONS.— 

16 ‘‘(i) IN GENERAL.—Except as pro17 vided in clause (ii), if a hospital’s reference 

18 resident level (as defined in subparagraph 

19 (I)(i)) is less than the otherwise applicable 

20 resident limit (as defined in subparagraph 

21 (I)(iii)), effective for portions of cost re22 porting periods occurring on or after July 

23 1, 2011, the otherwise applicable resident 

24 limit shall be reduced by 65 percent of the 

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1 ble resident limit and such reference resi2 dent level. 

3 ‘‘(ii) EXCEPTIONS.—This subpara4 graph shall not apply to— 

5 ‘‘(I) a hospital located in a rural 

6 area (as defined in subsection 

7 (d)(2)(D)(ii)) with fewer than 250 

8 acute care inpatient beds; or 

9 ‘‘(II) a hospital that was part of 

10 a qualifying entity which had a vol11 untary residency reduction plan ap12 proved under paragraph (6)(B), if the 

13 hospital demonstrates to the Secretary 

14 that it has a specified plan in place 

15 for filling the unused positions by not 

16 later than 2 years after the date of 

17 enactment of this paragraph. 

18 ‘‘(B) DISTRIBUTION.— 

19 ‘‘(i) IN GENERAL.—The Secretary 

20 shall increase the otherwise applicable resi21 dent limit for each qualifying hospital that 

22 submits an application under this subpara23 graph by such number as the Secretary 

24 may approve for portions of cost reporting 

25 periods occurring on or after July 1, 2011. 


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1 The aggregate number of increases in the 

2 otherwise applicable resident limit under 

3 this subparagraph shall be equal to the ag4 gregate reduction in such limits attrib5 utable to subparagraph (A) (as estimated 

6 by the Secretary). 

7 ‘‘(ii) REQUIREMENTS.—Subject to 

8 clause (iii), a hospital that receives an in9 crease in the otherwise applicable resident 

10 limit under this subparagraph shall ensure, 

11 during the 5-year period beginning on the 

12 date of such increase, that— 

13 ‘‘(I) the number of full-time 

14 equivalent primary care residents (as 

15 determined by the Secretary) is not 

16 less than the average number of full17 time equivalent primary care residents 

18 (as so determined) during the 3 most 

19 recent cost reporting periods ending 

20 prior to the date of enactment of this 

21 paragraph; and 

22 ‘‘(II) not less than 75 percent of 

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1 eral surgery residency (as determined 

2 by the Secretary). 

3 The Secretary may determine whether a 

4 hospital has met the requirements under 

5 this clause during such 5-year period in 

6 such manner and at such time as the Sec7 retary determines appropriate, including at 

8 the end of such 5-year period. 

9 ‘‘(iii) REDISTRIBUTION OF POSITIONS

10 IF HOSPITAL NO LONGER MEETS CERTAIN

11 REQUIREMENTS.—In the case where the 

12 Secretary determines that a hospital de13 scribed in clause (ii) does not meet either 

14 of the requirements under subclause (I) or 

15 (II) of such clause, the Secretary shall— 

16 ‘‘(I) reduce the otherwise applica17 ble resident limit of the hospital by 

18 the amount by which such limit was 

19 increased under this paragraph; and 

20 ‘‘(II) provide for the distribution 

21 of positions attributable to such re22 duction in accordance with the re23 quirements of this paragraph. 

24 ‘‘(C) CONSIDERATIONS IN REDISTRIBU25 TION.—In determining for which hospitals the 


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1 increase in the otherwise applicable resident 

2 limit is provided under subparagraph (B), the 

3 Secretary shall take into account— 

4 ‘‘(i) the demonstration likelihood of 

5 the hospital filling the positions made 

6 available under this paragraph within the 

7 first 3 cost reporting periods beginning on 

8 or after July 1, 2011, as determined by 

9 the Secretary; 

10 ‘‘(ii) whether the hospital is taking 

11 part in an innovative delivery model that 

12 promotes quality and care coordination; 

13 and 

14 ‘‘(iii) whether the hospital has an ac15 credited rural training track (as described 

16 in paragraph (4)(H)(iv)). 

17 ‘‘(D) PRIORITY FOR CERTAIN AREAS.—In 

18 determining for which hospitals the increase in 

19 the otherwise applicable resident limit is pro20 vided under subparagraph (B), subject to sub21 paragraph (E), the Secretary shall distribute 

22 the increase to hospitals based on the following 

23 factors: 

24 ‘‘(i) Whether the hospital is located in 

25 a State with a resident-to-population ratio 


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1 in the lowest quartile (as determined by 

2 the Secretary). 

3 ‘‘(ii) Whether the hospital is located 

4 in a State that is among the top 10 States 

5 in terms of the ratio of— 

6 ‘‘(I) the total population of the 

7 State living in an area designated 

8 (under such section 332(a)(1)(A)) as 

9 a health professional shortage area 

10 (as of the date of enactment of this 

11 paragraph); to 

12 ‘‘(II) the total population of the 

13 State (as determined by the Secretary 

14 based on the most recent available 

15 population data published by the Bu16 reau of the Census). 

17 ‘‘(iii) Whether the hospital is located 

18 in a rural area (as defined in subsection 

19 (d)(2)(D)(ii)). 

20 ‘‘(E) RESERVATION OF POSITIONS FOR

21 CERTAIN HOSPITALS.— 

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

23 (ii), the Secretary shall reserve the posi24 tions available for distribution under this 

25 paragraph as follows: 


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1 ‘‘(I) 70 percent of such positions 

2 for distribution to hospitals described 

3 in clause (i) of subparagraph (D). 

4 ‘‘(II) 30 percent of such positions 

5 for distribution to hospitals described 

6 in clause (ii) and (iii) of such sub7 paragraph. 

8 ‘‘(ii) EXCEPTION IF POSITIONS NOT

9 REDISTRIBUTED WITHIN ONE YEAR.—In 

10 the case where the Secretary does not dis11 tribute positions to hospitals in accordance 

12 with clause (i) by not later than 1 year 

13 after the date of enactment of this para14 graph, the Secretary shall distribute such 

15 positions to other hospitals in accordance 

16 with the considerations described in sub17 paragraph (C) and the priority described 

18 in subparagraph (D). 

19 ‘‘(F) LIMITATION.—A hospital may not re20 ceive more than 75 full-time equivalent addi21 tional residency positions under this paragraph. 

22 ‘‘(G) APPLICATION OF PER RESIDENT

23 AMOUNTS FOR PRIMARY CARE AND NONPRI24 MARY CARE.—With respect to additional resi25 dency positions in a hospital attributable to the 


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1 increase provided under this paragraph, the ap2 proved FTE resident amounts are deemed to be 

3 equal to the hospital per resident amounts for 

4 primary care and nonprimary care computed 

5 under paragraph (2)(D) for that hospital. 

6 ‘‘(H) DISTRIBUTION.—The Secretary shall 

7 distribute the increase to hospitals under this 

8 paragraph not later than 3 years after the date 

9 of enactment of this paragraph. 

10 ‘‘(I) DEFINITIONS.—In this paragraph: 

11 ‘‘(i) REFERENCE RESIDENT LEVEL.— 

12 The term ‘reference resident level’ has the 

13 meaning given such term by the Secretary. 

14 ‘‘(ii) RESIDENT LEVEL.—The term 

15 ‘resident level’ has the meaning given such 

16 term in paragraph (7)(C)(i). 

17 ‘‘(iii) OTHERWISE APPLICABLE RESI18 DENT LIMIT.—The term ‘otherwise appli19 cable resident limit’ means, with respect to 

20 a hospital, the limit otherwise applicable 

21 under subparagraphs (F)(i) and (H) of 

22 paragraph (4) on the resident level for the 

23 hospital determined without regard to this 

24 paragraph but taking into account para25 graph (7)(A). 


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1 ‘‘(J) ADMINISTRATION.—Chapter 35 of 

2 title 44, United States Code, shall not apply to 

3 the implementation of this paragraph.’’. 

4 (b) IME.— 

5 (1) IN GENERAL.—Section 1886(d)(5)(B)(v) of 

6 the Social Security Act (42 U.S.C. 

7 1395ww(d)(5)(B)(v)), in the second sentence, is 

8 amended— 

9 (A) by striking ‘‘subsection (h)(7)’’ and in10 serting ‘‘subsections (h)(7) and (h)(8)’’; and 

11 (B) by striking ‘‘it applies’’ and inserting 

12 ‘‘they apply’’. 

13 (2) CONFORMING AMENDMENT.—Section 

14 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 

15 1395ww(d)(5)(B)) is amended by adding at the end 

16 the following clause: 

17 ‘‘(x) For discharges occurring on or after the 

18 date of enactment of this clause, insofar as an addi19 tional payment amount under this subparagraph is 

20 attributable to resident positions distributed to a 

21 hospital under subsection (h)(8)(B), the indirect 

22 teaching adjustment factor shall be computed in the 

23 same manner as provided under clause (ii) with re24 spect to such resident positions.’’. 


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1 SEC. 3033. COUNTING RESIDENT TIME IN OUTPATIENT SET2 TINGS AND ALLOWING FLEXIBILITY FOR 

3 JOINTLY OPERATED RESIDENCY TRAINING 

4 PROGRAMS. 

5 (a) GME.—Section 1886(h)(4) of the Social Security 

6 Act (42 U.S.C. 1395ww(h)(4)) is amended— 

7 (1) in subparagraph (E)— 

8 (A) by striking ‘‘shall be counted and that 

9 all the time’’ and inserting ‘‘shall be counted 

10 and that— 

11 ‘‘(i) effective for cost reporting peri12 ods beginning before July 1, 2010, all the 

13 time’’; 

14 (B) in clause (i), as inserted by paragraph 

15 (1), by striking the period at the end and in16 serting ‘‘; and’’; and 

17 (C) by inserting after clause (i), as so in18 serted, the following new clause: 

19 ‘‘(ii) effective for cost reporting peri20 ods beginning on or after July 1, 2010, all 

21 the time so spent by a resident shall be 

22 counted towards the determination of full23 time equivalency, without regard to the 

24 setting in which the activities are per25 formed, if the hospital incurs, or, in the 

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1 ing program (as defined in subparagraph 

2 (I)(i)), 1 or more hospitals or 1 or more 

3 hospitals and 1 or more eligible training 

4 sites (as defined in subparagraph(I)(1)) 

5 continue to incur the costs of the stipends 

6 and fringe benefits of the resident during 

7 the time the resident spends in that set8 ting.’’; and 

9 (D) by adding at the end the following new 

10 subparagraph: 

11 ‘‘(I) JOINTLY OPERATED RESIDENCY

12 TRAINING PROGRAMS.— 

13 ‘‘(i) DEFINITIONS.—In this subpara14 graph: 

15 ‘‘(I) ELIGIBLE TRAINING SITE.— 

16 The term ‘eligible training site’ means 

17 an ambulatory or non-hospital train18 ing site at which the training occurs. 

19 ‘‘(II) JOINTLY OPERATED RESI20 DENCY TRAINING PROGRAM.—The 

21 term ‘jointly operated residency train22 ing program’ means an approved med23 ical residency training program that is 

24 jointly operated by 1 or more hos25 pitals or by 1 or more hospitals and 


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1 1 or more eligible training sites under 

2 a written agreement which specifies a 

3 method for the equitable distribution 

4 of time spent by the resident in activi5 ties relating to patient care for pur6 poses of determining the number of 

7 full-time equivalent residents of the 

8 hospitals or of the hospitals and the 

9 eligible training sites, as applicable. 

10 ‘‘(ii) REQUIRED SUBMISSION OF WRIT11 TEN AGREEMENT.—Each hospital or eligi12 ble training site participating in the oper13 ation of a jointly operated residency train14 ing program shall submit to the Secretary 

15 the written agreement described in clause 

16 (i)(II) upon request. 

17 ‘‘(iii) LIMITATION.—The Secretary 

18 shall ensure that, in the case of a jointly 

19 operated residency training program, the 

20 aggregate direct graduate medical edu21 cation payments to the hospitals or to the 

22 hospitals and eligible training sites with re23 spect to full-time equivalent residents in 

24 such jointly operated residency training 

25 program do not exceed the aggregate direct 


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1 graduate medical education payments 

2 which would have been made to the hos3 pitals or to the hospitals and eligible train4 ing sites if the hospitals or the hospitals 

5 and eligible training sites independently 

6 operated an approved medical residency 

7 training program for such residents.’’. 

8 (b) IME.—Section 1886(d)(5) of the Social Security 

9 Act (42 U.S.C. 1395ww(d)(5)) is amended— 

10 (1) in subparagraph (B)(iv)— 

11 (A) by striking ‘‘(iv) Effective for dis12 charges occurring on or after October 1, 1997’’ 

13 and inserting ‘‘(iv)(A) Effective for discharges 

14 occurring on or after October 1, 1997, and be15 fore July 1, 2010’’; and 

16 (B) by inserting after subparagraph (A), 

17 as inserted by paragraph (1), the following new 

18 subparagraph: 

19 ‘‘(B) Effective for discharges occur20 ring on or after July 1, 2010, all the time 

21 spent by an intern or resident in patient 

22 care activities in a nonhospital setting shall 

23 be counted towards the determination of 

24 full-time equivalency if the hospital incurs, 

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1 dency training program (as defined in sub2 paragraph (M)(i)), 1 or more hospitals or 

3 1 or more hospitals and 1 or more eligible 

4 training sites (as defined in subparagraph 

5 (M)(i)) continue to incur the costs of the 

6 stipends and fringe benefits of the intern 

7 or resident during the time the intern or 

8 resident spends in that setting.’’; and 

9 (C) by adding at the end the following new 

10 subparagraph: 

11 ‘‘(M)(i) In this subparagraph: 

12 ‘‘(I) The term ‘eligible training site’ means an 

13 ambulatory or non-hospital training site at which the 

14 training occurs. 

15 ‘‘(II) The term ‘jointly operated residency train16 ing program’ means an approved medical residency 

17 training program that is jointly operated by 1 or 

18 more hospitals or by 1 or more hospitals and 1 or 

19 more eligible training sites under a written agree20 ment which specifies a method for the equitable dis21 tribution of time spent by the resident in activities 

22 relating to patient care for purposes of determining 

23 the number of full-time equivalent residents of the 

24 hospitals or of the hospitals and the eligible training 

25 sites, as applicable. 


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1 ‘‘(ii) Each hospital or eligible training site partici2 pating in the operation of a jointly operated residency 

3 training program shall submit to the Secretary the written 

4 agreement described in clause (i)(II) upon request. 

5 ‘‘(iii) The Secretary shall ensure that, in the case of 

6 a jointly operated residency training program, the aggre7 gate indirect costs of medical education payments to the 

8 hospitals or to the hospitals and eligible training sites with 

9 respect to full-time equivalent residents in such jointly op10 erated residency training program do not exceed the ag11 gregate indirect costs of medical education payments 

12 which would have been made to the hospitals or to the 

13 hospitals and eligible training sites if the hospitals or the 

14 hospitals and eligible training sites independently operated 

15 an approved medical residency training program for such 

16 residents.’’. 

17 (c) APPLICATION.—The amendments made by this 

18 section shall not be applied in a manner that requires re19 opening of any settled hospital cost reports as to which 

20 there is not a jurisdictionally proper appeal pending as 

21 of the date of the enactment of this Act on the issue of 

22 payment for indirect costs of medical education under sec23 tion 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 

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1 cation costs under section 1886(h) of such Act (42 U.S.C. 

2 1395ww(h)). 

3 SEC. 3034. RULES FOR COUNTING RESIDENT TIME FOR DI4 DACTIC AND SCHOLARLY ACTIVITIES AND 

5 OTHER ACTIVITIES. 

6 (a) GME.—Section 1886(h) of the Social Security 

7 Act (42 U.S.C. 1395ww(h)), as amended by section 3033, 

8 is amended— 

9 (1) in paragraph (4)— 

10 (A) in subparagraph (E), by striking 

11 ‘‘Such rules’’ and inserting ‘‘Subject to sub12 paragraphs (J) and (K), such rules’’; and 

13 (B) by adding at the end the following new 

14 subparagraphs: 

15 ‘‘(J) TREATMENT OF CERTAIN NONHOS16 PITAL AND DIDACTIC ACTIVITIES.—Such rules 

17 shall provide that all time spent by an intern or 

18 resident in an approved medical residency train19 ing program in a nonhospital setting that is pri20 marily engaged in furnishing patient care (as 

21 defined in paragraph (5)(K)) in non-patient 

22 care activities, such as didactic conferences and 

23 seminars, but not including research not associ24 ated with the treatment or diagnosis of a par25 ticular patient, as such time and activities are 


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1 defined by the Secretary, shall be counted to2 ward the determination of full-time equivalency. 

3 ‘‘(K) TREATMENT OF CERTAIN OTHER AC4 TIVITIES.—In determining the hospital’s num5 ber of full-time equivalent residents for pur6 poses of this subsection, all the time that is 

7 spent by an intern or resident in an approved 

8 medical residency training program on vacation, 

9 sick leave, or other approved leave, as such time 

10 is defined by the Secretary, and that does not 

11 prolong the total time the resident is partici12 pating in the approved program beyond the nor13 mal duration of the program shall be counted 

14 toward the determination of full-time equiva15 lency.’’; and 

16 (2) in paragraph (5), by adding at the end the 

17 following new subparagraph: 

18 ‘‘(K) NONHOSPITAL SETTING THAT IS PRI19 MARILY ENGAGED IN FURNISHING PATIENT

20 CARE.—The term ‘nonhospital setting that is 

21 primarily engaged in furnishing patient care’ 

22 means a nonhospital setting in which the pri23 mary activity is the care and treatment of pa24 tients, as defined by the Secretary.’’. 


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1 (b) IME DETERMINATIONS.—Section 1886(d)(5)(B) 

2 of such Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 

3 adding at the end the following new clause: 

4 ‘‘(x)(I) The provisions of subpara5 graph (K) of subsection (h)(4) shall apply 

6 under this subparagraph in the same man7 ner as they apply under such subsection. 

8 ‘‘(II) In determining the hospital’s 

9 number of full-time equivalent residents 

10 for purposes of this subparagraph, all the 

11 time spent by an intern or resident in an 

12 approved medical residency training pro13 gram in non-patient care activities, such as 

14 didactic conferences and seminars, as such 

15 time and activities are defined by the Sec16 retary, that occurs in the hospital shall be 

17 counted toward the determination of full18 time equivalency if the hospital— 

19 ‘‘(aa) is recognized as a sub20 section (d) hospital; 

21 ‘‘(bb) is recognized as a sub22 section (d) Puerto Rico hospital; 

23 ‘‘(cc) is reimbursed under a reim24 bursement system authorized under 

25 section 1814(b)(3); or 


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1 ‘‘(dd) is a provider-based hospital 

2 outpatient department. 

3 ‘‘(III) In determining the hospital’s 

4 number of full-time equivalent residents 

5 for purposes of this subparagraph, all the 

6 time spent by an intern or resident in an 

7 approved medical residency training pro8 gram in research activities that are not as9 sociated with the treatment or diagnosis of 

10 a particular patient, as such time and ac11 tivities are defined by the Secretary, shall 

12 not be counted toward the determination of 

13 full-time equivalency.’’. 

14 (c) EFFECTIVE DATES; APPLICATION.— 

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

16 the amendments made by this section apply to cost 

17 reporting periods determined appropriate by the Sec18 retary. 

19 (2) APPLICATION.—The amendments made by 

20 this section shall not be applied in a manner that re21 quires reopening of any settled hospital cost reports 

22 as to which there is not a jurisdictionally proper ap23 peal pending as of the date of the enactment of this 

24 Act on the issue of payment for indirect costs of 

25 medical education under section 1886(d)(5)(B) of 


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1 the Social Security Act or for direct graduate med2 ical education costs under section 1886(h) of such 

3 Act. 

4 SEC. 3035. PRESERVATION OF RESIDENT CAP POSITIONS 

5 FROM CLOSED AND ACQUIRED HOSPITALS. 

6 (a) GME.—Section 1886(h)(4)(H) of the Social Se7 curity Act (42 U.S.C. Section 1395ww(h)(4)(H)) is 

8 amended by adding at the end the following new clauses: 

9 ‘‘(vi) REDISTRIBUTION OF RESIDENCY

10 SLOTS AFTER A HOSPITAL CLOSES.— 

11 ‘‘(I) IN GENERAL.—Subject to 

12 the succeeding provisions of this 

13 clause, the Secretary shall, by regula14 tion, establish a process under which, 

15 in the case where a hospital with an 

16 approved medical residency program 

17 closes on or after the date of enact18 ment of the Balanced Budget Act of 

19 1997, the Secretary shall increase the 

20 otherwise applicable resident limit 

21 under this paragraph for other hos22 pitals in accordance with this clause. 

23 ‘‘(II) PRIORITY FOR HOSPITALS

24 IN CERTAIN AREAS.—Subject to the 

25 succeeding provisions of this clause, in 


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1 determining for which hospitals the 

2 increase in the otherwise applicable 

3 resident limit is provided under such 

4 process, the Secretary shall distribute 

5 the increase to hospitals in the fol6 lowing priority order (with preference 

7 given within each category to hos8 pitals that are members of the same 

9 affiliated group (as defined by the 

10 Secretary under clause (ii)) as the 

11 closed hospital): 

12 ‘‘(aa) First, to hospitals lo13 cated in the same core-based sta14 tistical area as, or a core-based 

15 statistical area contiguous to, the 

16 hospital that closed. 

17 ‘‘(bb) Second, to hospitals 

18 located in the same State as the 

19 hospital that closed. 

20 ‘‘(cc) Third, to hospitals lo21 cated in the same region of the 

22 country as the hospital that 

23 closed. 

24 ‘‘(dd) Fourth, only if the 

25 Secretary is not able to distribute 


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1 the increase to hospitals de2 scribed in item (cc), to qualifying 

3 hospitals in accordance with the 

4 provisions of paragraph (8). 

5 ‘‘(III) REQUIREMENT HOSPITAL

6 LIKELY TO FILL POSITION WITHIN

7 CERTAIN TIME PERIOD.—The Sec8 retary may only increase the otherwise 

9 applicable resident limit of a hospital 

10 under such process if the Secretary 

11 determines the hospital has dem12 onstrated a likelihood of filling the po13 sitions made available under this 

14 clause within 3 years. 

15 ‘‘(IV) LIMITATION.—The aggre16 gate number of increases in the other17 wise applicable resident limits for hos18 pitals under this clause shall be equal 

19 to the number of resident positions in 

20 the approved medical residency pro21 grams that closed on or after the date 

22 described in subclause (I). 

23 ‘‘(vii) SPECIAL RULE FOR ACQUIRED

24 HOSPITALS.— 


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1 ‘‘(I) IN GENERAL.—In the case 

2 of a hospital that is acquired (through 

3 any mechanism) by another entity 

4 with the approval of a bankruptcy 

5 court, during a period determined by 

6 the Secretary (but not less than 3 

7 years), the applicable resident limit of 

8 the acquired hospital shall, except as 

9 provided in subclause (II), be the ap10 plicable resident limit of the hospital 

11 that was acquired (as of the date im12 mediately before the acquisition), so 

13 long as the acquiring entity continues 

14 to operate the hospital that was ac15 quired and to furnish services, medical 

16 residency programs, and volume of 

17 patients similar to the services, med18 ical residency programs, and volume 

19 of patients of the hospital that was 

20 acquired (as determined by the Sec21 retary) during such period. 

22 ‘‘(II) LIMITATION.—Subclause 

23 (I) shall only apply in the case where 

24 an acquiring entity waives the right as 

25 a new provider under the program 


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1 under this title to have the otherwise 

2 applicable resident limit of the ac3 quired hospital re-established or in4 creased.’’. 

5 (b) IME.—Section 1886(d)(5)(B)(v) of the Social Se6 curity Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 

7 sentence, as amended by section 3032, is amended by 

8 striking ‘‘subsections (h)(7) and (h)(8)’’ and inserting 

9 ‘‘subsections (h)(4)(H)(vi), (h)(4)(H)(vii), (h)(7), and 

10 (h)(8)’’. 

11 (c) APPLICATION.—The amendments made by this 

12 section shall not be applied in a manner that requires re13 opening of any settled hospital cost reports as to which 

14 there is not a jurisdictionally proper appeal pending as 

15 of the date of the enactment of this Act on the issue of 

16 payment for indirect costs of medical education under sec17 tion 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 

18 1395ww(d)(5)(B)) or for direct graduate medical edu19 cation costs under section 1886(h) of such Act (42 U.S.C. 

20 Section 1395ww(h)). 

21 (d) EFFECT ON TEMPORARY FTE CAP ADJUST22 MENTS.—The Secretary of Health and Human Services 

23 shall give consideration to the effect of the amendments 

24 made by this section on any temporary adjustment to a 

25 hospital’s FTE cap under section 413.79(h) of title 42, 


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1 Code of Federal Regulations (as in effect on the date of 

2 enactment of this Act) in order to ensure that there is 

3 no duplication of FTE slots. Such amendments shall not 

4 affect the application of section 1886(h)(4)(H)(v) of the 

5 Social Security Act (42 U.S.C. 1395ww(h)(4)(H)(v)). 

6 SEC. 3036. WORKFORCE ADVISORY COMMITTEE. 

7 (a) ESTABLISHMENT.—The Secretary shall establish 

8 a Workforce Advisory Committee. 

9 (b) MEMBERSHIP.—The Committee shall be com10 posed of members appointed by the Secretary from 

11 among— 

12 (1) external stakeholders and representatives of 

13 health care professionals; 

14 (2) schools of higher education for health care 

15 professionals; 

16 (3) public health experts; 

17 (4) health insurers; 

18 (5) business, labor, State or local workforce in19 vestment boards; and 

20 (6) any other health professional organization 

21 or practice the Secretary determines appropriate. 

22 (c) DUTIES.— 

23 (1) NATIONAL WORKFORCE STRATEGY.— 

24 (A) IN GENERAL.—Not later than a date 

25 determined appropriate by the Secretary, the 


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1 Committee shall develop and submit to Con2 gress and the heads of relevant Federal agen3 cies a national workforce strategy that will set 

4 the United States on a path toward recruiting, 

5 training, and retaining a health care workforce 

6 that meets the current and projected health 

7 care needs of the United States. 

8 (B) CONSULTATION.— 

9 (i) RELEVANT FEDERAL AGENCIES.— 

10 In developing the national workforce strat11 egy under subparagraph (A), the Com12 mittee shall consult closely with the heads 

13 of relevant Federal agencies, such as the 

14 Office of the Administrator of the Health 

15 Resources and Services Administration and 

16 the Secretary of Veterans Affairs, to avoid 

17 duplication of efforts by those agencies and 

18 to review Federal health care workforce 

19 policies on a government-wide basis. 

20 (ii) STATE AND LOCAL ENTITIES.— 

21 The Committee shall consult with State 

22 and local entities in developing such na23 tional workforce strategy. 

24 (2) STUDY AND BIANNUAL REPORTS ON THE

25 HEALTH CARE WORKFORCE SUPPLY.— 


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1 (A) STUDY.—The Committee shall conduct 

2 a study on the health care workforce in the 

3 United States. Such study shall include an 

4 analysis of— 

5 (i) the current and projected health 

6 care workforce supply; 

7 (ii) the current and projected demand 

8 for health professionals; 

9 (iii) the capacity for education and 

10 training of the health care workforce; 

11 (iv) the implications of current and 

12 proposed Federal laws and regulations af13 fecting the health care workforce; and 

14 (v) the health care workforce needs of 

15 specific populations, including minorities, 

16 rural and urban populations, and medically 

17 underserved populations. 

18 (B) BIANNUAL REPORTS.— 

19 (i) IN GENERAL.—The Committee 

20 shall, on a biannual basis, submit to Con21 gress and the heads of relevant Federal 

22 agencies a report containing the results of 

23 the study conducted under subparagraph 

24 (A), together with recommendations for 


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1 such legislation and administrative action 

2 as the Committee determines appropriate. 

3 (ii) PUBLIC AVAILABILITY.—The 

4 Committee shall make each report sub5 mitted under clause (i) available to the 

6 public. 

7 (3) STUDIES AND REPORTS ON OTHER HIGH8 PRIORITY TOPICS.— 

9 (A) STUDY.—The Committee shall conduct 

10 studies on specific high-priority topics, includ11 ing— 

12 (i) efforts to integrate the health care 

13 workforce into a reformed health care de14 livery system; 

15 (ii) the implications for the health 

16 care workforce as a result of greater utili17 zation of health information technology; 

18 (iii) nursing workforce capacity; 

19 (iv) mental and behavioral health care 

20 workforce capacity; and 

21 (v) the geographic distribution of 

22 health care providers. 

23 (B) REPORTS.— 

24 (i) IN GENERAL.—The Committee 

25 shall submit to Congress and the heads of 


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1 relevant Federal agencies a report con2 taining the results of each study conducted 

3 under subparagraph (A), together with rec4 ommendations for such legislation and ad5 ministrative action as the Committee de6 termines appropriate. 

7 (ii) PUBLIC AVAILABILITY.—The 

8 Committee shall make each report sub9 mitted under clause (i) available to the 

10 public. 

11 (d) DEFINITIONS.—In this section: 

12 (1) COMMITTEE.—The term ‘‘Committee’’ 

13 means the Workforce Advisory Committee estab14 lished under subsection (a). 

15 (2) SECRETARY.—The term ‘‘Secretary’’ means 

16 the Secretary of Health and Human Services. 

17 SEC. 3037. DEMONSTRATION PROJECTS TO ADDRESS 

18 HEALTH PROFESSIONS WORKFORCE NEEDS; 

19 EXTENSION OF FAMILY-TO-FAMILY HEALTH 

20 INFORMATION CENTERS. 

21 (a) AUTHORITY TO CONDUCT DEMONSTRATION

22 PROJECTS.—Title XI of the Social Security Act (42 

23 U.S.C. 1301 et seq.) is amended by inserting after section 

24 1130A, the following new section: 


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1 ‘‘SEC. 1130B. DEMONSTRATION PROJECTS TO ADDRESS 

2 HEALTH PROFESSIONS WORKFORCE NEEDS. 

3 ‘‘(a) DEMONSTRATION PROJECTS TO PROVIDE LOW4 INCOME INDIVIDUALS WITH OPPORTUNITIES FOR EDU5 CATION, TRAINING, AND CAREER ADVANCEMENT TO AD6 DRESS HEALTH PROFESSIONS WORKFORCE NEEDS.— 

7 ‘‘(1) AUTHORITY TO AWARD GRANTS.—The 

8 Secretary, in consultation with the Secretary of 

9 Labor, shall award grants to eligible entities to con10 duct demonstration projects that are designed to 

11 provide eligible individuals with the opportunity to 

12 obtain education and training for occupations in the 

13 health care field that pay well and are expected to 

14 either experience labor shortages or be in high de15 mand. 

16 ‘‘(2) REQUIREMENTS.— 

17 ‘‘(A) AID AND SUPPORTIVE SERVICES.— 

18 ‘‘(i) IN GENERAL.—A demonstration 

19 project conducted by an eligible entity 

20 awarded a grant under this section shall, if 

21 appropriate, provide eligible individuals 

22 participating in the project with financial 

23 aid, child care, case management, and 

24 other supportive services. 

25 ‘‘(ii) TREATMENT.—Any aid, services, 

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1 ficiary participating in a demonstration 

2 project under this section shall not be con3 sidered income, and shall not be taken into 

4 account for purposes of determining the in5 dividual’s eligibility for, or amount of, ben6 efits under the State TANF program, the 

7 State Medicaid plan, the State Supple8 mental Nutrition Assistance Program 

9 (SNAP), and any Housing and Urban De10 velopment program. 

11 ‘‘(B) CONSULTATION AND COORDINA12 TION.—An eligible entity awarded a grant to 

13 carry out a demonstration project under this 

14 section shall consult with the State agency re15 sponsible for administering the State TANF 

16 program in carrying out the project and, if the 

17 entity is not a local workforce investment board, 

18 also shall consult with the local workforce in19 vestment board for the area in which the 

20 project is conducted and with the State Work21 force Investment Board established under sec22 tion 111 of the Workforce Investment Act of 

23 1998 (29 U.S.C. 2821). 

24 ‘‘(C) ASSURANCE OF OPPORTUNITIES FOR

25 INDIAN POPULATIONS.—The Secretary shall 


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1 award at least 3 grants under this subsection to 

2 an eligible entity that is an Indian tribe, tribal 

3 organization, or Tribal College or University. 

4 ‘‘(3) REPORTS AND EVALUATION.— 

5 ‘‘(A) ELIGIBLE ENTITIES.—An eligible en6 tity awarded a grant to conduct a demonstra7 tion project under this subsection shall submit 

8 interim reports to the Secretary on the activi9 ties carried out under the project and a final 

10 report on such activities upon the conclusion of 

11 the entities’ participation in the project. Such 

12 reports shall include assessments of the effec13 tiveness of such activities with respect to im14 proving outcomes for the eligible individuals 

15 participating in the project and with respect to 

16 addressing health professions workforce needs 

17 in the areas in which the project is conducted. 

18 ‘‘(B) EVALUATION.—The Secretary shall, 

19 by grant, contract, or interagency agreement, 

20 evaluate the demonstration projects conducted 

21 under this subsection. Such evaluation shall in22 clude identification of successful activities for 

23 creating opportunities for developing and sus24 taining, particularly with respect to low-income 

25 individuals and other entry-level workers, a 


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1 health professions workforce that has accessible 

2 entry points, that meets high standards for edu3 cation, training, certification, and professional 

4 development, and that provides increased wages 

5 and affordable benefits, including health care 

6 coverage, that are responsive to the workforce’s 

7 needs. 

8 ‘‘(C) REPORT TO CONGRESS.—The Sec9 retary shall submit interim reports and, based 

10 on the evaluation conducted under subpara11 graph (B), a final report to Congress on the 

12 demonstration projects conducted under this 

13 subsection. 

14 ‘‘(4) DEFINITIONS.—In this subsection: 

15 ‘‘(A) ELIGIBLE ENTITY.—The term ‘eligi16 ble entity’ means a State, an Indian tribe or 

17 tribal organization, an institution of higher edu18 cation, a local workforce investment board es19 tablished under section 117 of the Workforce 

20 Investment Act of 1998 (29 U.S.C. 2832), or a 

21 community-based organization. 

22 ‘‘(B) ELIGIBLE INDIVIDUAL.— 

23 ‘‘(i) IN GENERAL.—The term ‘eligible 

24 individual’ means a individual receiving as25 sistance under the State TANF program. 


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1 ‘‘(ii) OTHER LOW-INCOME INDIVID2 UALS.—Such term may include other low3 income individuals described by the eligible 

4 entity in its application for a grant under 

5 this section. 

6 ‘‘(C) INDIAN TRIBE; TRIBAL ORGANIZA7 TION.—The terms ‘Indian tribe’ and ‘tribal or8 ganization’ have the meaning given such terms 

9 in section 4 of the Indian Self-Determination 

10 and Education Assistance Act (25 U.S.C. 

11 450b). 

12 ‘‘(D) INSTITUTION OF HIGHER EDU13 CATION.—The term ‘institution of higher edu14 cation’ has the meaning given that term in sec15 tion 101 of the Higher Education Act of 1965 

16 (20 U.S.C. 1001). 

17 ‘‘(E) STATE.—The term ‘State’ means 

18 each of the 50 States, the District of Columbia, 

19 the Commonwealth of Puerto Rico, the United 

20 States Virgin Islands, Guam, and American 

21 Samoa. 

22 ‘‘(F) STATE TANF PROGRAM.—The term 

23 ‘State TANF program’ means the temporary 

24 assistance for needy families program funded 

25 under part A of title IV. 


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1 ‘‘(G) TRIBAL COLLEGE OR UNIVERSITY.— 

2 The term ‘Tribal College or University’ has the 

3 meaning given that term in section 316(b) of 

4 the Higher Education Act of 1965 (20 U.S.C. 

5 1059c(b)). 

6 ‘‘(b) DEMONSTRATION PROJECT TO DEVELOP

7 TRAINING AND CERTIFICATION PROGRAMS FOR PER8 SONAL OR HOME CARE AIDES.— 

9 ‘‘(1) AUTHORITY TO AWARD GRANTS.—Not 

10 later than 18 months after the date of enactment of 

11 this Act, the Secretary shall award grants to eligible 

12 entities that are States to conduct demonstration 

13 projects for purposes of developing core training 

14 competencies and certification programs for personal 

15 or home care aides. The Secretary shall— 

16 ‘‘(A) evaluate the efficacy of the core train17 ing competencies described in paragraph (3)(A) 

18 for newly hired personal or home care aides and 

19 the methods used by States to implement such 

20 core training competencies in accordance with 

21 the issues specified in paragraph (3)(B); and 

22 ‘‘(B) ensure that the number of hours of 

23 training provided by States under the dem24 onstration project with respect to such core 

25 training competencies are not less than the 


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1 number of hours of training required under any 

2 applicable State or Federal law or regulation. 

3 ‘‘(2) DURATION.—A demonstration project shall 

4 be conducted under this subsection for not less than 

5 3 years. 

6 ‘‘(3) CORE TRAINING COMPETENCIES FOR PER7 SONAL OR HOME CARE AIDES.— 

8 ‘‘(A) IN GENERAL.—The core training 

9 competencies for personal or home care aides 

10 described in this subparagraph include com11 petencies with respect to the following areas: 

12 ‘‘(i) The role of the personal or home 

13 care aide (including differences between a 

14 personal or home care aide employed by an 

15 agency and a personal or home care aide 

16 employed directly by the health care con17 sumer or an independent provider). 

18 ‘‘(ii) Consumer rights, ethics, and 

19 confidentiality (including the role of proxy 

20 decision-makers in the case where a health 

21 care consumer has impaired decision-mak22 ing capacity). 

23 ‘‘(iii) Communication, cultural and 

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1 lem solving, behavior management, and re2 lationship skills. 

3 ‘‘(iv) Personal care skills. 

4 ‘‘(v) Health care support. 

5 ‘‘(vi) Nutritional support. 

6 ‘‘(vii) Infection control. 

7 ‘‘(viii) Safety and emergency training. 

8 ‘‘(ix) Training specific to an indi9 vidual consumer’s needs (including older 

10 individuals, younger individuals with dis11 abilities, individuals with developmental 

12 disabilities, individuals with dementia, and 

13 individuals with mental and behavioral 

14 health needs). 

15 ‘‘(x) Self-Care. 

16 ‘‘(B) IMPLEMENTATION.—The implemen17 tation issues specified in this subparagraph in18 clude the following: 

19 ‘‘(i) The length of the training. 

20 ‘‘(ii) The appropriate trainer to stu21 dent ratio. 

22 ‘‘(iii) The amount of instruction time 

23 spent in the classroom as compared to on24 site in the home or a facility. 

25 ‘‘(iv) Trainer qualifications. 


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1 ‘‘(v) Content for a ‘hands-on’ and 

2 written certification exam. 

3 ‘‘(vi) Continuing education require4 ments. 

5 ‘‘(4) APPLICATION AND SELECTION CRI6 TERIA.— 

7 ‘‘(A) IN GENERAL.— 

8 ‘‘(i) NUMBER OF STATES.—The Sec9 retary shall enter into agreements with not 

10 more than 6 States to conduct demonstra11 tion projects under this subsection. 

12 ‘‘(ii) REQUIREMENTS FOR STATES.— 

13 An agreement entered into under clause (i) 

14 shall require that a participating State— 

15 ‘‘(I) implement the core training 

16 competencies described in paragraph 

17 (3)(A); and 

18 ‘‘(II) develop written materials 

19 and protocols for such core training 

20 competencies, including the develop21 ment of a certification test for per22 sonal or home care aides who have 

23 completed such training competencies. 

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1 TIONAL COLLEGES.—The Secretary shall 

2 encourage participating States to consult 

3 with community and vocational colleges re4 garding the development of curricula to 

5 implement the project with respect to ac6 tivities, as applicable, which may include 

7 consideration of such colleges as partners 

8 in such implementation. 

9 ‘‘(B) APPLICATION AND ELIGIBILITY.—A 

10 State seeking to participate in the project 

11 shall— 

12 ‘‘(i) submit an application to the Sec13 retary containing such information and at 

14 such time as the Secretary may specify; 

15 ‘‘(ii) meet the selection criteria estab16 lished under subparagraph (C); and 

17 ‘‘(iii) meet such additional criteria as 

18 the Secretary may specify. 

19 ‘‘(C) SELECTION CRITERIA.—In selecting 

20 States to participate in the program, the Sec21 retary shall establish criteria to ensure (if appli22 cable with respect to the activities involved)— 

23 ‘‘(i) geographic and demographic di24 versity; 


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1 ‘‘(ii) that participating States offer 

2 medical assistance for personal care serv3 ices under the State Medicaid plan; 

4 ‘‘(iii) that the existing training stand5 ards for personal or home care aides in 

6 each participating State— 

7 ‘‘(I) are different from such 

8 standards in the other participating 

9 States; and 

10 ‘‘(II) are different from the core 

11 training competencies described in 

12 paragraph (3)(A); 

13 ‘‘(iv) that participating States do not 

14 reduce the number of hours of training re15 quired under applicable State law or regu16 lation after being selected to participate in 

17 the project; and 

18 ‘‘(v) that participating States recruit 

19 a minimum number of eligible health and 

20 long-term care providers to participate in 

21 the project. 

22 ‘‘(D) TECHNICAL ASSISTANCE.—The Sec23 retary shall provide technical assistance to 

24 States in developing written materials and pro25 tocols for such core training competencies. 


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1 ‘‘(5) EVALUATION AND REPORT.— 

2 ‘‘(A) EVALUATION.—The Secretary shall 

3 develop an experimental or control group test4 ing protocol in consultation with an inde5 pendent evaluation contractor selected by the 

6 Secretary. Such contractor shall evaluate— 

7 ‘‘(i) the impact of core training com8 petencies described in paragraph (3)(A), 

9 including curricula developed to implement 

10 such core training competencies, for per11 sonal or home care aides within each par12 ticipating State on job satisfaction, mas13 tery of job skills, beneficiary and family 

14 caregiver satisfaction with services, and ad15 ditional measures determined by the Sec16 retary in consultation with the expert 

17 panel; 

18 ‘‘(ii) the impact of providing such core 

19 training competencies on the existing 

20 training infrastructure and resources of 

21 States; and 

22 ‘‘(iii) whether a minimum number of 

23 hours of initial training should be required 

24 for personal or home care aides and, if so, 


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1 what minimum number of hours should be 

2 required. 

3 ‘‘(B) REPORTS.— 

4 ‘‘(i) REPORT ON INITIAL IMPLEMEN5 TATION.—Not later than 2 years after the 

6 date of enactment of this Act, the Sec7 retary shall submit to Congress a report on 

8 the initial implementation of activities con9 ducted under the demonstration project, 

10 including any available results of the eval11 uation conducted under subparagraph (A) 

12 with respect to such activities, together 

13 with such recommendations for legislation 

14 or administrative action as the Secretary 

15 determines appropriate. 

16 ‘‘(ii) FINAL REPORT.—Not later than 

17 1 year after the completion of the dem18 onstration project, the Secretary shall sub19 mit to Congress a report containing the re20 sults of the evaluation conducted under 

21 subparagraph (A), together with such rec22 ommendations for legislation or adminis23 trative action as the Secretary determines 

24 appropriate. 

25 ‘‘(6) DEFINITIONS.—In this subsection: 


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1 ‘‘(A) ELIGIBLE HEALTH AND LONG-TERM

2 CARE PROVIDER.—The term ‘eligible health and 

3 long-term care provider’ means a personal or 

4 home care agency (including personal or home 

5 care public authorities), a nursing home, a 

6 home health agency (as defined in section 

7 1861(o)), or any other health care provider the 

8 Secretary determines appropriate which— 

9 ‘‘(i) is licensed or authorized to pro10 vide services in a participating State; and 

11 ‘‘(ii) receives payment for services 

12 under title XIX. 

13 ‘‘(B) PERSONAL CARE SERVICES.—The 

14 term ‘personal care services’ has the meaning 

15 given such term for purposes of title XIX. 

16 ‘‘(C) PERSONAL OR HOME CARE AIDE.— 

17 The term ‘personal or home care aide’ means 

18 an individual who helps individuals who are el19 derly, disabled, ill, or mentally disabled (includ20 ing an individual with Alzheimer’s disease or 

21 other dementia) to live in their own home or a 

22 residential care facility (such as a nursing 

23 home, assisted living facility, or any other facil24 ity the Secretary determines appropriate) by 


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1 providing routine personal care services and 

2 other appropriate services to the individual. 

3 ‘‘(D) STATE.—The term ‘State’ has the 

4 meaning given that term for purposes of title 

5 XIX. 

6 ‘‘(c) FUNDING.— 

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

8 out of any funds in the Treasury not otherwise ap9 propriated, there are appropriated to the Secretary 

10 to carry out subsections (a) and (b), $85,000,000 

11 for each of fiscal years 2010 through 2014. 

12 ‘‘(2) TRAINING AND CERTIFICATION PROGRAMS

13 FOR PERSONAL AND HOME CARE AIDES.—With re14 spect to the demonstration projects under subsection 

15 (b), the Secretary shall use $5,000,000 of the 

16 amount appropriated under paragraph (1) for each 

17 of fiscal years 2010 through 2012 to carry out such 

18 projects. No funds appropriated under paragraph 

19 (1) shall be used to carry out demonstration projects 

20 under subsection (b) after fiscal year 2012.’’. 

21 (b) EXTENSION OF FAMILY-TO-FAMILY HEALTH IN22 FORMATION CENTERS.—Section 501(c)(1)(A)(iii) of the 

23 Social Security Act (42 U.S.C. 701(c)(1)(A)(iii)) is 

24 amended by striking ‘‘fiscal year 2009’’ and inserting 

25 ‘‘each of fiscal years 2009 through 2012’’. 


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1 SEC. 3038. INCREASING TEACHING CAPACITY. 

2 (a) TEACHING HEALTH CENTERS TRAINING AND

3 ENHANCEMENT.—Part C of title VII of the Public Health 

4 Service Act (42 U.S.C. 293k et. seq.) is amended by in5 serting after section 748 the following: 

6 ‘‘SEC. 749. TEACHING HEALTH CENTERS DEVELOPMENT 

7 GRANTS. 

8 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary may 

9 award grants under this section to teaching health centers 

10 for the purpose of establishing newly accredited or ex11 panded primary care residency programs. 

12 ‘‘(b) AMOUNT AND DURATION.—Grants awarded 

13 under this section shall be for a term of not more than 

14 2 years and the maximum award may not be more than 

15 $500,000. 

16 ‘‘(c) USE OF FUNDS.—Amounts provided under a 

17 grant under this section shall be used to cover the costs 

18 of— 

19 ‘‘(1) establishing or expanding a primary care 

20 residency training program described in subsection 

21 (a), including costs associated with— 

22 ‘‘(A) curriculum development; 

23 ‘‘(B) recruitment, training and retention of 

24 residents and faculty: 

25 ‘‘(C) accreditation by the Accreditation 

26 Council for Graduate Medical Education 


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1 (ACGME) or the American Osteopathic Asso2 ciation (AOA); and 

3 ‘‘(D) faculty salaries during the develop4 ment phase; and 

5 ‘‘(2) technical assistance provided by an eligible 

6 entity, including costs associated with— 

7 ‘‘(A) materials development; 

8 ‘‘(B) staff salaries; 

9 ‘‘(C) travel; and 

10 ‘‘(D) administrative costs. 

11 ‘‘(d) APPLICATION.—A teaching health center seek12 ing a grant under this section shall submit an application 

13 to the Secretary at such time, in such manner, and con14 taining such information as the Secretary may require. 

15 ‘‘(e) PRIORITY.—In selecting recipients for grants 

16 under this section, the Secretary shall give priority to 

17 funding residency training programs in Federally qualified 

18 health centers, rural health centers, Indian health centers, 

19 newly established residency programs, and integrated 

20 rural training tracks and rural training tracks and 

21 residencies with a mission to train physicians for rural and 

22 underserved practice. 

23 ‘‘(f) FURTHER PRIORITY FOR CERTAIN APPLICA24 TIONS.—With respect to applications for grants under this 

25 section that are receiving priority under subsection (e), the 


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1 Secretary shall give further preference to any such appli2 cation that documents an existing affiliation agreement 

3 with an area health education center program as defined 

4 in sections 751 and 799B. 

5 ‘‘(g) DEFINITIONS.—In this section: 

6 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en7 tity’ means an organization capable of providing 

8 technical assistance including an area health edu9 cation center program as defined in sections 751 

10 and 799B. 

11 ‘‘(2) PRIMARY CARE RESIDENCY PROGRAM.— 

12 The term ‘primary care residency program’ means 

13 an approved medical residency program under sec14 tion 1886(h)(5)(A) of the Social Security Act in 

15 family medicine, general pediatrics, general internal 

16 medicine, or obstetrics and gynecology. 

17 ‘‘(3) TEACHING HEALTH CENTER.—The term 

18 ‘teaching health center’— 

19 ‘‘(A) means a facility which— 

20 ‘‘(i) is a community-based, ambulatory 

21 patient care center; and 

22 ‘‘(ii) is establishing a new or expand23 ing an existing primary care residency pro24 gram under section 1886(h)(5)(A) of the 


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1 Social Security Act in a specialty which the 

2 Secretary determines is in high-need; 

3 ‘‘(B) includes Federally qualified health 

4 centers, community health centers, health care 

5 for the homeless centers, rural health centers, 

6 migrant health centers, Native American health 

7 centers operated by the Indian Health Service, 

8 Indian tribes and tribal organizations, and 

9 other not-for-profit community-based clinical 

10 entities. 

11 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

12 is authorized to be appropriated, $25,000,000 for fiscal 

13 year 2010, $50,000,000 for fiscal year 2011, $50,000,000 

14 for fiscal year 2012, and such sums as may be necessary 

15 for each fiscal year thereafter to carry out this section. 

16 Not to exceed $5,000,000 annually may be used for tech17 nical assistance program grants.’’. 

18 (b) NATIONAL HEALTH SERVICE CORPS TEACHING

19 CAPACITY.—Section 338C(a) of the Public Health Service 

20 Act (42 U.S.C. 254m(a)) is amended to read as follows: 

21 ‘‘(a) SERVICE IN FULL-TIME CLINICAL PRACTICE.— 

22 Except as provided in section 338D, each individual who 

23 has entered into a written contract with the Secretary 

24 under section 338A or 338B shall provide service in the 

25 full-time clinical practice of such individual’s profession as 


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1 a member of the Corps for the period of obligated service 

2 provided in such contract. For the purpose of calculating 

3 time spent in full-time clinical practice under this sub4 section, up to 50 percent of time spent teaching by a mem5 ber of the Corps may be counted toward his or her service 

6 obligation.’’. 

7 (c) PAYMENTS TO QUALIFIED TEACHING HEALTH

8 CENTERS.—Title XVIII of the Social Security Act (42 

9 U.S.C. 1395 et seq.), as amended by sections 3023 and 

10 3024, is amended by inserting after section 1866E the fol11 lowing new section: 

12 ‘‘PAYMENTS TO QUALIFIED TEACHING HEALTH CENTERS

13 FOR DIRECT GRADUATE MEDICAL EDUCATION EX14 PENSES AND OTHER INDIRECT EXPENSES ASSOCI15 ATED WITH OPERATING APPROVED GRADUATE MED16 ICAL RESIDENCY TRAINING PROGRAMS

17 ‘‘SEC. 1866F. (a) IN GENERAL.—The Secretary 

18 shall, for purposes of increasing training and improving 

19 access to primary care services, make payments to quali20 fied teaching health centers for direct graduate medical 

21 education costs and other indirect costs associated with 

22 operating approved graduate medical residency training 

23 programs. 

24 ‘‘(b) APPROVED GRADUATE MEDICAL RESIDENCY

25 TRAINING PROGRAMS.—An approved medical residency 

26 training program operated by a qualified teaching health 


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1 center shall meet criteria for accreditation (as established 

2 by the Accreditation Council for Graduate Medical Edu3 cation or the American Osteopathic Association). 

4 ‘‘(c) DETERMINATION OF PAYMENT AND FUNDING

5 CALCULATIONS.—The Secretary shall determine the basis 

6 of payment and any funding calculations necessary with 

7 respect to payments for direct graduate medical education 

8 expenses and other indirect expenses associated with oper9 ating approved graduate medical residency training pro10 grams. 

11 ‘‘(d) CLARIFICATION REGARDING RELATIONSHIP TO

12 OTHER PAYMENTS FOR GRADUATE MEDICAL EDU13 CATION.—Payments under this section— 

14 ‘‘(1) shall be in addition to any payments— 

15 ‘‘(A) for the indirect costs of medical edu16 cation under section 1886(d)(5)(B); and 

17 ‘‘(B) for direct graduate medical education 

18 costs under section 1886(h); and 

19 ‘‘(2) shall not be taken into account in applying 

20 the limitation on the number of total full time equiv21 alent residents under section 1886(h)(4)(F) and 

22 clauses (v) and (vi)(I) of section 1886(d)(5)(B). 

23 ‘‘(e) REGULATIONS.—The Secretary shall promulgate 

24 regulations to carry out this section. 


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1 ‘‘(f) FUNDING.—The Secretary shall provide for the 

2 transfer, from the Federal Hospital Insurance Trust Fund 

3 under section 1817, of $230,000,000,000, for payments 

4 under this section for the period of fiscal years 2011 

5 through 2015. Amounts transferred under the preceding 

6 sentence shall remain available until expended. 

7 ‘‘(g) DEFINITIONS.—In this section: 

8 ‘‘(1) APPROVED GRADUATE MEDICAL RESI9 DENCY TRAINING PROGRAM.—The term ‘approved 

10 medical residency training program’ has the mean11 ing given such term in section 1886(h)(5)(A). 

12 ‘‘(2) PRIMARY CARE RESIDENCY PROGRAM.— 

13 The term ‘primary care residency program’ means 

14 an approved medical residency training program in 

15 family medicine, internal medicine, pediatrics, medi16 cine-pediatrics, obstetrics and gynecology, psychi17 atry, and geriatrics. 

18 ‘‘(3) QUALIFIED TEACHING HEALTH CENTER.— 

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

20 teaching health center’ means an entity that— 

21 ‘‘(i) is a community based, ambula22 tory patient care center; and 

23 ‘‘(ii) operates a primary care resi24 dency program. 


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1 ‘‘(B) INCLUSION OF CERTAIN ENTITIES.— 

2 Such term includes the following: 

3 ‘‘(i) A Federally qualified health cen4 ter (as defined in section 1861(aa)(4)). 

5 ‘‘(ii) A community mental health cen6 ter (as defined in section 1861(ff)(3)(B)). 

7 ‘‘(iii) A community health center. 

8 ‘‘(iv) A health care for the homeless 

9 center. 

10 ‘‘(v) A rural health center. 

11 ‘‘(vi) A migrant health center. 

12 ‘‘(vii) A health center operated by the 

13 Indian Health Service, an Indian tribe or 

14 tribal organization, or an urban Indian or15 ganization (as defined in section 4 of the 

16 Indian Health Care Improvement Act). 

17 ‘‘(viii) An entity receiving funds under 

18 title X of the Public Health Service Act.’’. 

19 SEC. 3039. GRADUATE NURSE EDUCATION DEMONSTRA20 TION PROGRAM. 

21 (a) IN GENERAL.— 

22 (1) ESTABLISHMENT.—The Secretary shall es23 tablish a graduate nurse education demonstration 

24 program under title XVIII of the Social Security Act 

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1 pitals are reimbursed for costs described in para2 graph (2). 

3 (2) COSTS DESCRIBED.— 

4 (A) IN GENERAL.—Subject to subpara5 graph (B), the costs described in this para6 graph are educational costs, clinical instruction 

7 costs, and other direct and indirect costs of the 

8 eligible hospital which are attributable to pro9 viding advanced practice nurses with qualified 

10 training. 

11 (B) LIMITATION.—With respect to a year, 

12 the amount reimbursed under the program may 

13 not exceed the amount of costs described in 

14 subparagraph (A) that are attributable to an 

15 increase in the number of advanced practice 

16 nurses enrolled in a program that provides 

17 qualified training during the year, as compared 

18 to the average number of advanced practice 

19 nurses who graduated from a program that pro20 vides qualified training in each year during the 

21 period beginning on January 1, 2006 and end22 ing on December 31, 2010 (as determined by 

23 the Secretary). 

24 (b) DEFINITIONS.—In this section: 


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1 (1) ADVANCED PRACTICE NURSE.—The term 

2 ‘‘advanced practice nurse’’ includes the following: 

3 (A) A clinical nurse specialist (as defined 

4 in subsection (aa)(5) of section 1861 of the So5 cial Security Act (42 U.S.C. 1395x)). 

6 (B) A nurse practitioner (as defined in 

7 such subsection). 

8 (C) A certified registered nurse anesthetist 

9 (as defined in subsection (bb)(2) of such sec10 tion). 

11 (D) A certified nurse midwife. 

12 (2) APPLICABLE NON-HOSPITAL COMMUNITY13 BASED CARE SETTING.—The term ‘‘applicable non14 hospital community-based care setting’’ means a 

15 non-hospital community-based care setting which 

16 has entered into an agreement with the eligible hos17 pital under which the non-hospital community-based 

18 care setting is responsible for its share of costs de19 scribed in subsection (a). 

20 (3) APPLICABLE SCHOOL OF NURSING.—The 

21 term ‘‘applicable school of nursing’’ means an ac22 credited school of nursing (as defined in section 801 

23 of the Public Health Service Act) which has entered 

24 into an agreement with the eligible hospital under 


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1 which the school of nursing is responsible for its 

2 share of costs described in subsection (a). 

3 (4) ELIGIBLE HOSPITAL.—The term ‘‘eligible 

4 hospital’’ means a subsection (d) hospital (as defined 

5 in section 1861(d)(1)(B) of the Social Security Act 

6 (42 U.S.C. 1395x(d)(1)(B))) that— 

7 (A) is affiliated with 1 or more applicable 

8 schools of nursing; and 

9 (B) is partnered with 2 or more applicable 

10 non-hospital community-based care settings. 

11 (5) PROGRAM.—The term ‘‘program’’ means 

12 the graduate nurse education demonstration pro13 gram established under subsection (a). 

14 (6) QUALIFIED TRAINING.— 

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

16 training’’ means training— 

17 (i) that provides an advanced practice 

18 nurse with the skills necessary to provide 

19 primary care, preventive care, transitional 

20 care, chronic care management, and other 

21 services appropriate for individuals entitled 

22 to, or enrolled for, benefits under part A of 

23 title XVIII of the Social Security Act, or 

24 enrolled under part B of such title; and 


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1 (ii) subject to subparagraph (B), at 

2 least half of which is provided in a non3 hospital community-based care setting. 

4 (B) WAIVER OF REQUIREMENT HALF OF

5 TRAINING BE PROVIDED IN NON-HOSPITAL

6 COMMUNITY-BASED CARE SETTING IN CERTAIN

7 AREAS.—The Secretary may waive the require8 ment under subparagraph (A)(ii) with respect 

9 to eligible hospitals located in rural and medi10 cally underserved areas. 

11 (7) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Health and Human Services. 

13 (c) FUNDING.—There is hereby appropriated to the 

14 Secretary, out of any funds in the Treasury not otherwise 

15 appropriated, $50,000,000 for each of fiscal years 2012 

16 through 2015 to carry out this section. Such amounts 

17 shall remain available without fiscal year limitation. 

18 PART V—HEALTH INFORMATION TECHNOLOGY 

19 SEC. 3041. FREE CLINICS AND CERTIFIED EHR TECH20 NOLOGY. 

21 (a) MEDICARE.— 

22 (1) PAYMENT INCENTIVE.—Section 1848(o)(5) 

23 of the Social Security Act (42 U.S.C. 1395w– 

24 4(o)(5)) is amended— 


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1 (A) in subparagraph (C), by striking 

2 ‘‘PROFESSIONAL.—The term’’ and inserting 

3 ‘‘PROFESSIONAL.— 

4 ‘‘(i) IN GENERAL.—The term’’; and 

5 (i) by adding at the end the following 

6 new clause: 

7 ‘‘(ii) CLARIFICATION.—Nothing in 

8 this subsection shall prevent a physician 

9 from being considered an eligible profes10 sional for purposes of this subsection as a 

11 result of the physician furnishing items 

12 and services in a free clinic.’’; and 

13 (B) by adding at the end the following new 

14 subparagraph: 

15 ‘‘(D) FREE CLINIC.— 

16 ‘‘(i) IN GENERAL.—The term ‘free 

17 clinic’ means a safety-net health care orga18 nization that— 

19 ‘‘(I) uses volunteers to provide a 

20 range of medical, dental, pharmacy, or 

21 behavioral health services to economi22 cally disadvantaged individuals, the 

23 majority of whom are uninsured or 

24 underinsured; and 


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1 ‘‘(II) is an organization described 

2 in section 501(c)(3) of the Internal 

3 Revenue Code of 1986 and exempt 

4 from tax under section 501(a) of such 

5 Code or operates as a program or af6 filiate of an organization so described 

7 and exempt. 

8 ‘‘(ii) INCLUSION OF CERTAIN OTHER

9 ORGANIZATIONS.—An organization that 

10 otherwise meets the definition under clause 

11 (i), except that it charges a nominal fee to 

12 patients, may still be considered a free 

13 clinic for purposes of subparagraph (C)(ii) 

14 if the organization provides essential serv15 ices regardless of the patient’s ability to 

16 pay for such essential services.’’. 

17 (2) PAYMENT ADJUSTMENT.—Section 

18 1848(a)(7)(E)(iii) of the Social Security Act (42 

19 U.S.C. 1395w–4(a)(7)(E)(iii)) is amended— 

20 (A) by striking ‘‘PROFESSIONAL.—The 

21 term’’ and inserting ‘‘PROFESSIONAL.—The 

22 term 

23 ‘‘(I) IN GENERAL.—The term’’; 

24 and 


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1 (B) by adding at the end the following new 

2 subclause: 

3 ‘‘(II) CLARIFICATION.—Nothing 

4 in this paragraph shall prevent a phy5 sician from being considered an eligi6 ble professional for purposes of this 

7 paragraph as a result of the physician 

8 furnishing items and services in a free 

9 clinic (as defined in subsection 

10 (o)(5)(D)).’’. 

11 (b) MEDICAID.—Section 1903(t)(3)(B) of the Social 

12 Security Act (42 U.S.C. 1396b(t)(3)(B)) is amended by 

13 adding at the end the following flush sentence: 

14 ‘‘Nothing in this subsection or subsection 

15 (a)(3)(F) shall prevent a Medicaid provider de16 scribed in clauses (i) through (v) from being 

17 considered an eligible professional for purposes 

18 of this subsection or subsection (a)(3)(F) as a 

19 result of the Medicaid provider furnishing items 

20 and services in a free clinic (as defined in sec21 tion 1848(o)(5)(D)).’’. 


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1 Subtitle B—Improving Medicare 

2 for Patients and Providers 

3 PART I—ENSURING BENEFICIARY ACCESS TO 

4 PHYSICIAN CARE AND OTHER SERVICES 

5 SEC. 3101. INCREASE IN THE PHYSICIAN PAYMENT UPDATE. 

6 Section 1848(d) of the Social Security Act (42 U.S.C. 

7 1395w–4(d)) is amended by adding at the end the fol8 lowing new paragraph: 

9 ‘‘(10) UPDATE FOR 2010.— 

10 ‘‘(A) IN GENERAL.—Subject to paragraphs 

11 (7)(B), (8)(B), and (9)(B), in lieu of the update 

12 to the single conversion factor established in 

13 paragraph (1)(C) that would otherwise apply 

14 for 2010, the update to the single conversion 

15 factor shall be 0.5 percent. 

16 ‘‘(B) NO EFFECT ON COMPUTATION OF

17 CONVERSION FACTOR FOR 2011 AND SUBSE18 QUENT YEARS.—The conversion factor under 

19 this subsection shall be computed under para20 graph (1)(A) for 2011 and subsequent years as 

21 if subparagraph (A) had never applied.’’. 


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1 SEC. 3102. EXTENSION OF THE WORK GEOGRAPHIC INDEX 

2 FLOOR AND REVISIONS TO THE PRACTICE 

3 EXPENSE GEOGRAPHIC ADJUSTMENT UNDER 

4 THE MEDICARE PHYSICIAN FEE SCHEDULE. 

5 (a) EXTENSION OF WORK GPCI FLOOR.—Section 

6 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 

7 1395w–4(e)(1)(E)) is amended by striking ‘‘before Janu8 ary 1, 2010’’ and inserting ‘‘before January 1, 2013’’. 

9 (b) PRACTICE EXPENSE GEOGRAPHIC ADJUSTMENT

10 FOR 2010 AND SUBSEQUENT YEARS.—Section 1848(e)(1) 

11 of the Social Security Act (42 U.S.C. 1395w4(e)(1)) is 

12 amended— 

13 (1) in subparagraph (A), by striking ‘‘and (G)’’ 

14 and inserting ‘‘(G), and (H)’’; and 

15 (2) by adding at the end the following new sub16 paragraph: 

17 ‘‘(H) PRACTICE EXPENSE GEOGRAPHIC

18 ADJUSTMENT FOR 2010 AND SUBSEQUENT

19 YEARS.— 

20 ‘‘(i) FOR 2010.—Subject to clause (iii), 

21 for services furnished during 2010, the em22 ployee wage and rent portions of the prac23 tice expense geographic index described in 

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1 ferent fee schedule areas and the national 

2 average of such employee wages and rents. 

3 ‘‘(ii) FOR 2011.—Subject to clause 

4 (iii), for services furnished during 2011, 

5 the employee wage and rent portions of the 

6 practice expense geographic index de7 scribed in subparagraph (A)(i) shall reflect 

1 8 ⁄2 of the difference between the relative 

9 costs of employee wages and rents in each 

10 of the different fee schedule areas and the 

11 national average of such employee wages 

12 and rents. 

13 ‘‘(iii) HOLD HARMLESS.—The practice 

14 expense portion of the geographic adjust15 ment factor applied in a fee schedule area 

16 for services furnished in 2010 or 2011 

17 shall not, as a result of the application of 

18 clause (i) or (ii), be reduced below the 

19 practice expense portion of the geographic 

20 adjustment factor under subparagraph 

21 (A)(i) (as calculated prior to the applica22 tion of such clause (i) or (ii), respectively) 

23 for such area for such year. 

24 ‘‘(iv) ANALYSIS.—The Secretary shall 

25 analyze current methods of establishing 


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1 practice expense geographic adjustments 

2 under subparagraph (A)(i) and evaluate 

3 data that fairly and reliably establishes 

4 distinctions in the costs of operating a 

5 medical practice in the different fee sched6 ule areas. Such analysis shall include an 

7 evaluation of the following: 

8 ‘‘(I) The feasibility of using ac9 tual data or reliable survey data devel10 oped by medical organizations on the 

11 costs of operating a medical practice, 

12 including office rents and non-physi13 cian staff wages, in different fee 

14 schedule areas. 

15 ‘‘(II) The office expense portion 

16 of the practice expense geographic ad17 justment described in subparagraph 

18 (A)(i), including the extent to which 

19 types of office expenses are deter20 mined in local markets instead of na21 tional markets. 

22 ‘‘(III) The weights assigned to 

23 each of the categories within the prac24 tice expense geographic adjustment 

25 described in subparagraph (A)(i). 


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1 ‘‘(v) REVISION FOR 2012 AND SUBSE2 QUENT YEARS.—As a result of the analysis 

3 described in clause (iv), the Secretary 

4 shall, not later than January 1, 2012, 

5 make appropriate adjustments to the prac6 tice expense geographic adjustment de7 scribed in subparagraph (A)(i) to ensure 

8 accurate geographic adjustments across fee 

9 schedule areas, including— 

10 ‘‘(I) basing the office rents com11 ponent and its weight on office ex12 penses that vary among fee schedule 

13 areas; and 

14 ‘‘(II) considering a representative 

15 range of professional and non-profes16 sional personnel employed in a med17 ical office based on the use of the 

18 American Community Survey data or 

19 other reliable data for wage adjust20 ments. 

21 Such adjustments shall be made without 

22 regard to adjustments made pursuant to 

23 clauses (i) and (ii) and shall be made in a 

24 budget neutral manner. 


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1 ‘‘(vi) SPECIAL RULE.—If the Sec2 retary does not complete the analysis de3 scribed in clause (iv) and make any adjust4 ments the Secretary determines appro5 priate for 2012 or a subsequent year under 

6 clause (v), the Secretary shall apply 

7 clauses (ii) and (iii) for services furnished 

8 during 2012 or a subsequent year in the 

9 same manner as such clauses apply for 

10 services furnished during 2011.’’. 

11 SEC. 3103. EXTENSION OF EXCEPTIONS PROCESS FOR 

12 MEDICARE THERAPY CAPS. 

13 Section 1833(g)(5) of the Social Security Act (42 

14 U.S.C. 1395l(g)(5)) is amended by striking ‘‘December 

15 31, 2009’’ and inserting ‘‘December 31, 2011’’. 

16 SEC. 3104. EXTENSION OF PAYMENT FOR TECHNICAL COM17 PONENT OF CERTAIN PHYSICIAN PATHOL18 OGY SERVICES. 

19 Section 542(c) of the Medicare, Medicaid, and 

20 SCHIP Benefits Improvement and Protection Act of 2000 

21 (as enacted into law by section 1(a)(6) of Public Law 106– 

22 554), as amended by section 732 of the Medicare Prescrip23 tion Drug, Improvement, and Modernization Act of 2003 

24 (42 U.S.C. 1395w–4 note), section 104 of division B of 

25 the Tax Relief and Health Care Act of 2006 (42 U.S.C. 


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1 1395w–4 note), section 104 of the Medicare, Medicaid, 

2 and SCHIP Extension Act of 2007 (Public Law 110– 

3 173), and section 136 of the Medicare Improvements for 

4 Patients and Providers Act of 2008 (Public Law 110– 

5 275), is amended by striking ‘‘and 2009’’ and inserting 

6 ‘‘2009, 2010, and 2011’’. 

7 SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS. 

8 (a) GROUND AMBULANCE.—Section 1834(l)(13)(A) 

9 of the Social Security Act (42 U.S.C. 1395m(l)(13)(A)) 

10 is amended— 

11 (1) in the matter preceding clause (i), by strik12 ing ‘‘before January 1, 2010’’ and inserting ‘‘before 

13 January 1, 2012’’; and 

14 (2) in each of clauses (i) and (ii), by striking 

15 ‘‘before January 1, 2010’’ and inserting ‘‘before 

16 January 1, 2012’’. 

17 (b) AIR AMBULANCE.—Section 146(b)(1) of the 

18 Medicare Improvements for Patients and Providers Act of 

19 2008 (Public Law 110–275) is amended by striking ‘‘end20 ing on December 31, 2009’’ and inserting ‘‘ending on De21 cember 31, 2011’’. 

22 (c) SUPER RURAL AMBULANCE.—Section 

23 1834(l)(12)(A) of the Social Security Act (42 U.S.C. 

24 1395m(l)(12)(A)) is amended by striking ‘‘2010’’ and in25 serting ‘‘2012’’. 


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1 SEC. 3106. EXTENSION OF CERTAIN PAYMENT RULES FOR 

2 LONG-TERM CARE HOSPITAL SERVICES AND 

3 OF MORATORIUM ON THE ESTABLISHMENT 

4 OF CERTAIN HOSPITALS AND FACILITIES. 

5 (a) EXTENSION OF CERTAIN PAYMENT RULES.— 

6 Section 114(c) of the Medicare, Medicaid, and SCHIP Ex7 tension Act of 2007 (42 U.S.C. 1395ww note) is amended 

8 by striking ‘‘3-year period’’ each place it appears and in9 serting ‘‘5-year period’’. 

10 (b) EXTENSION OF MORATORIUM.—Section 

11 114(d)(1) of such Act (42 U.S.C. 1395ww note), in the 

12 matter preceding subparagraph (A), is amended by strik13 ing ‘‘3-year period’’ and inserting ‘‘5-year period’’. 

14 SEC. 3107. EXTENSION OF PHYSICIAN FEE SCHEDULE MEN15 TAL HEALTH ADD-ON. 

16 Section 138(a)(1) of the Medicare Improvements for 

17 Patients and Providers Act of 2008 (Public Law 110–275) 

18 is amended by striking ‘‘December 31, 2009’’ and insert19 ing ‘‘December 31, 2011’’. 


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1 SEC. 3108. PERMITTING PHYSICIAN ASSISTANTS TO ORDER 

2 POST-HOSPITAL EXTENDED CARE SERVICES 

3 AND TO PROVIDE FOR RECOGNITION OF AT4 TENDING PHYSICIAN ASSISTANTS AS AT5 TENDING PHYSICIANS TO SERVE HOSPICE 

6 PATIENTS. 

7 (a) ORDERING POST-HOSPITAL EXTENDED CARE

8 SERVICES.— 

9 (1) IN GENERAL.—Section 1814(a)(2) of the 

10 Social Security Act (42 U.S.C. 1395f(a)(2)), in the 

11 matter preceding subparagraph (A), is amended by 

12 striking ‘‘nurse practitioner or clinical nurse spe13 cialist’’ and inserting ‘‘nurse practitioner, a clinical 

14 nurse specialist, or a physician assistant (as those 

15 terms are defined in section 1861(aa)(5))’’. 

16 (2) CONFORMING AMENDMENT.—Section 

17 1814(a) of the Social Security Act (42 U.S.C. 

18 1395f(a)) is amended, in the second sentence, by 

19 striking ‘‘or clinical nurse specialist’’ and inserting 

20 ‘‘clinical nurse specialist, or physician assistant’’. 

21 (b) RECOGNITION OF ATTENDING PHYSICIAN AS22 SISTANTS AS ATTENDING PHYSICIANS TO SERVE HOS23 PICE PATIENTS.— 

24 (1) IN GENERAL.—Section 1861(dd)(3)(B) of 

25 the Social Security Act (42 U.S.C. 1395x(dd)(3)(B)) 

26 is amended— 


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1 (A) by striking ‘‘or nurse’’ and inserting ‘‘, 

2 the nurse’’; and 

3 (B) by inserting ‘‘, or the physician assist4 ant (as defined in such subsection)’’ after ‘‘sub5 section (aa)(5))’’. 

6 (2) CLARIFICATION OF HOSPICE ROLE OF PHY7 SICIAN ASSISTANTS.—Section 1814(a)(7)(A)(i)(I) of 

8 the Social Security Act (42 U.S.C. 

9 1395f(a)(7)(A)(i)(I)) is amended by inserting ‘‘or a 

10 physician assistant’’ after ‘‘a nurse practitioner’’. 

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

12 this section shall apply to items and services furnished on 

13 or after January 1, 2011. 

14 SEC. 3109. RECOGNITION OF CERTIFIED DIABETES EDU15 CATORS AS CERTIFIED PROVIDERS FOR PUR16 POSES OF MEDICARE DIABETES OUTPATIENT 

17 SELF-MANAGEMENT TRAINING SERVICES. 

18 (a) IN GENERAL.—Section 1861(qq) of the Social Se19 curity Act (42 U.S.C. 1395x(qq)) is amended— 

20 (1) in paragraph (1), by inserting ‘‘or by a cer21 tified diabetes educator (as defined in paragraph 

22 (3))’’ after ‘‘paragraph (2)(B)’’; and 

23 (2) by adding at the end the following new 

24 paragraphs: 


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1 ‘‘(3) For purposes of paragraph (1), the term 

2 ‘certified diabetes educator’ means an individual 

3 who— 

4 ‘‘(A) is licensed or registered by the State 

5 in which the services are performed as a health 

6 care professional; 

7 ‘‘(B) specializes in teaching individuals 

8 with diabetes to develop the necessary skills and 

9 knowledge to manage the individual’s diabetic 

10 condition; and 

11 ‘‘(C) is certified as a diabetes educator by 

12 a recognized certifying body (as defined in 

13 paragraph (4)). 

14 ‘‘(4)(A) For purposes of paragraph (3)(C), the 

15 term ‘recognized certifying body’ means— 

16 ‘‘(i) the National Certification Board 

17 for Diabetes Educators, or 

18 ‘‘(ii) a certifying body for diabetes 

19 educators, which is recognized by the Sec20 retary as authorized to grant certification 

21 of diabetes educators for purposes of this 

22 subsection pursuant to standards estab23 lished by the Secretary, 


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1 if the Secretary determines such Board or body, 

2 respectively, meets the requirement of subpara3 graph (B). 

4 ‘‘(B) The National Certification Board for 

5 Diabetes Educators or a certifying body for dia6 betes educators meets the requirement of this 

7 subparagraph, with respect to the certification 

8 of an individual, if the Board or body, respec9 tively, is incorporated and registered to do busi10 ness in the United States and requires as a 

11 condition of such certification each of the fol12 lowing: 

13 ‘‘(i) The individual has a qualifying 

14 credential in a specified health care profes15 sion. 

16 ‘‘(ii) The individual has professional 

17 practice experience in diabetes self-man18 agement training that includes a minimum 

19 number of hours and years of experience in 

20 such training. 

21 ‘‘(iii) The individual has successfully 

22 completed a national certification examina23 tion offered by such entity. 


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1 ‘‘(iv) The individual periodically re2 news certification status following initial 

3 certification.’’. 

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

5 subsection (a) shall apply to diabetes outpatient self-man6 agement training services furnished on or after January 

7 1, 2011. 

8 SEC. 3110. EXEMPTION OF CERTAIN PHARMACIES FROM 

9 ACCREDITATION REQUIREMENTS. 

10 (a) IN GENERAL.—Section 1834(a)(20) of the Social 

11 Security Act (42 U.S.C. 1395m(a)(20)), as added by sec12 tion 154(b)(1)(A) of the Medicare Improvements for Pa13 tients and Providers Act of 2008 (Public Law 100–275), 

14 is amended— 

15 (1) in subparagraph (F)(i), by inserting ‘‘and 

16 subparagraph (G)’’ after ‘‘clause (ii)’’; and 

17 (2) by adding at the end the following new sub18 paragraph: 

19 ‘‘(G) APPLICATION OF ACCREDITATION RE20 QUIREMENT TO CERTAIN PHARMACIES.— 

21 ‘‘(i) IN GENERAL.—In implementing 

22 quality standards under this paragraph— 

23 ‘‘(I) subject to subclause (II), in 

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1 graph (F)(i) with respect to phar2 macies described in clause (ii) fur3 nishing such items and services, such 

4 standards and accreditation require5 ment shall not apply to such phar6 macies; and 

7 ‘‘(II) the Secretary may apply to 

8 such pharmacies an alternative ac9 creditation requirement established by 

10 the Secretary if the Secretary deter11 mines such alternative accreditation 

12 requirement is more appropriate for 

13 such pharmacies. 

14 ‘‘(ii) PHARMACIES DESCRIBED.—A 

15 pharmacy described in this clause is a 

16 pharmacy that meets each of the following 

17 criteria: 

18 ‘‘(I) The total billings by the 

19 pharmacy for such items and services 

20 under this title are less than 5 percent 

21 of total pharmacy sales, as determined 

22 based on the average total pharmacy 

23 sales for the previous 3 calendar 

24 years, 3 fiscal years, or other yearly 

25 period specified by the Secretary. 


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1 ‘‘(II) The pharmacy has been en2 rolled under section 1866(j) as a sup3 plier of durable medical equipment, 

4 prosthetics, orthotics, and supplies, 

5 has been issued (which may include 

6 the renewal of) a provider number for 

7 at least 5 years, and for which a final 

8 adverse action (as defined in section 

9 424.57(a) of title 42, Code of Federal 

10 Regulations) has not been imposed in 

11 the past 5 years. 

12 ‘‘(III) The pharmacy submits to 

13 the Secretary an attestation, in a 

14 form and manner, and at a time, 

15 specified by the Secretary, that the 

16 pharmacy meets the criteria described 

17 in subclauses (I) and (II). Such attes18 tation shall be subject to section 1001 

19 of title 18, United States Code. 

20 ‘‘(IV) The pharmacy agrees to 

21 submit materials as requested by the 

22 Secretary, or during the course of an 

23 audit conducted on a random sample 

24 of pharmacies selected annually, to 

25 verify that the pharmacy meets the 


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1 criteria described in subclauses (I) 

2 and (II). Materials submitted under 

3 the preceding sentence shall include a 

4 certification by an accountant on be5 half of the pharmacy or the submis6 sion of tax returns filed by the phar7 macy during the relevant periods, as 

8 requested by the Secretary.’’. 

9 (b) EFFECTIVE DATE.— 

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

11 this section shall apply to items or services furnished 

12 on or after January 1, 2010. 

13 (2) ADMINISTRATION.—Notwithstanding any 

14 other provision of law, the Secretary may implement 

15 the amendments made by subsection (a) by program 

16 instruction or otherwise. 

17 SEC. 3111. PART B SPECIAL ENROLLMENT PERIOD FOR DIS18 ABLED TRICARE BENEFICIARIES. 

19 (a) IN GENERAL.— 

20 (1) IN GENERAL.—Section 1837 of the Social 

21 Security Act (42 U.S.C. 1395p) is amended by add22 ing at the end the following new subsection: 

23 ‘‘(l)(1) In the case of any individual who is a covered 

24 beneficiary (as defined in section 1072(5) of title 10, 

25 United States Code) at the time the individual is entitled 


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1 to part A under section 226(b) or section 226A and who 

2 is eligible to enroll but who has elected not to enroll (or 

3 to be deemed enrolled) during the individual’s initial en4 rollment period, there shall be a special enrollment period 

5 described in paragraph (2). 

6 ‘‘(2) The special enrollment period described in this 

7 paragraph, with respect to an individual, is the 12-month 

8 period beginning on the day after the last day of the initial 

9 enrollment period of the individual or, if later, the 12- 

10 month period beginning with the month the individual is 

11 notified of enrollment under this section. 

12 ‘‘(3) In the case of an individual who enrolls during 

13 the special enrollment period provided under paragraph 

14 (1), the coverage period under this part shall begin on the 

15 first day of the month in which the individual enrolls, or, 

16 at the option of the individual, the first month after the 

17 end of the individual’s initial enrollment period. 

18 ‘‘(4) An individual may only enroll during the special 

19 enrollment period provided under paragraph (1) one time 

20 during the individual’s lifetime. 

21 ‘‘(5) The Secretary shall ensure that the materials 

22 relating to coverage under this part that are provided to 

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1 ing the impact on health care benefits under the 

2 TRICARE program under chapter 55 of title 10, United 

3 States Code. 

4 ‘‘(6) The Secretary of Defense shall collaborate with 

5 the Secretary of Health and Human Services and the 

6 Commissioner of Social Security to provide for the accu7 rate identification of individuals described in paragraph 

8 (1). The Secretary of Defense shall provide such individ9 uals with notification with respect to this subsection. The 

10 Secretary of Defense shall collaborate with the Secretary 

11 of Health and Human Services and the Commissioner of 

12 Social Security to ensure appropriate follow up pursuant 

13 to any notification provided under the preceding sen14 tence.’’. 

15 (2) EFFECTIVE DATE.—The amendment made 

16 by paragraph (1) shall apply to elections made with 

17 respect to initial enrollment periods that end after 

18 the date of the enactment of this Act. 

19 (b) WAIVER OF INCREASE OF PREMIUM.—Section 

20 1839(b) of the Social Security Act (42 U.S.C. 1395r(b)) 

21 is amended by striking ‘‘section 1837(i)(4)’’ and inserting 

22 ‘‘subsection (i)(4) or (l) of section 1837’’. 

23 SEC. 3112. PAYMENT FOR BONE DENSITY TESTS. 

24 (a) PAYMENT.— 


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1 (1) IN GENERAL.—Section 1848 of the Social 

2 Security Act (42 U.S.C. 1395w–4) is amended— 

3 (A) in subsection (b)— 

4 (i) in paragraph (4)(B), by inserting 

5 ‘‘, and for 2010 and 2011, dual-energy x6 ray absorptiometry services (as described 

7 in paragraph (6))’’ before the period at the 

8 end; and 

9 (ii) by adding at the end the following 

10 new paragraph: 

11 ‘‘(6) TREATMENT OF BONE MASS SCANS.—For 

12 dual-energy x-ray absorptiometry services (identified 

13 in 2006 by HCPCS codes 76075 and 76077 (and 

14 any succeeding codes)) furnished during 2010 and 

15 2011, instead of the payment amount that would 

16 otherwise be determined under this section for such 

17 years, the payment amount shall be equal to 70 per18 cent of the product of— 

19 ‘‘(A) the relative value for the service (as 

20 determined in subsection (c)(2)) for 2006; 

21 ‘‘(B) the conversion factor (established 

22 under subsection (d)) for 2006; and 

23 ‘‘(C) the geographic adjustment factor (es24 tablished under subsection (e)(2)) for the servVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00896 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ice for the fee schedule area for 2010 and 2011, 

2 respectively.’’; and 

3 (B) in subsection (c)(2)(B)(iv)— 

4 (i) in subclause (II), by striking 

5 ‘‘and’’ at the end; 

6 (ii) in subclause (III), by striking the 

7 period at the end and inserting ‘‘; and’’; 

8 and 

9 (iii) by adding at the end the fol10 lowing new subclause: 

11 ‘‘(IV) subsection (b)(6) shall not 

12 be taken into account in applying 

13 clause (ii)(II) for 2010 or 2011.’’. 

14 (2) IMPLEMENTATION.—Notwithstanding any 

15 other provision of law, the Secretary may implement 

16 the amendments made by paragraph (1) by program 

17 instruction or otherwise. 

18 (b) STUDY AND REPORT BY THE INSTITUTE OF

19 MEDICINE.— 

20 (1) IN GENERAL.—The Secretary of Health and 

21 Human Services is authorized to enter into an 

22 agreement with the Institute of Medicine of the Na23 tional Academies to conduct a study on the ramifica24 tions of Medicare payment reductions for dual-en25 ergy x-ray absorptiometry (as described in section 


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1 1848(b)(6) of the Social Security Act, as added by 

2 subsection (a)(1)) during 2007, 2008, and 2009 on 

3 beneficiary access to bone mass density tests. 

4 (2) REPORT.—An agreement entered into under 

5 paragraph (1) shall provide for the Institute of Med6 icine to submit to the Secretary and to Congress a 

7 report containing the results of the study conducted 

8 under such paragraph. 

9 SEC. 3113. REVISION TO THE MEDICARE IMPROVEMENT 

10 FUND. 

11 Section 1898(b)(1)(A) of the Social Security Act (42 

12 U.S.C. 1395iii) is amended by striking 

13 ‘‘$22,290,000,000’’ and inserting ‘‘$0’’. 

14 SEC. 3114. TREATMENT OF CERTAIN COMPLEX DIAGNOSTIC 

15 LABORATORY TESTS. 

16 (a) TREATMENT.— 

17 (1) IN GENERAL.—Notwithstanding sections 

18 1862(a)(14) and 1866(a)(1)(H)(i) of the Social Se19 curity Act (42 U.S.C. 1395y(a)(14) and 

20 1395cc(a)(1)(H)(i)), in the case that a laboratory 

21 performs a covered complex diagnostic laboratory 

22 test, with respect to a specimen collected from an in23 dividual during a period in which the individual is a 

24 patient of a hospital, if the test is performed after 

25 such period the Secretary of Health and Human 


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1 Services shall treat such test, for purposes of pro2 viding direct payment to the laboratory under sec3 tion 1833(h) or 1848 of such Act (42 U.S.C. 

4 1395l(h) or 1395w–4), as if such specimen had been 

5 collected directly by the laboratory. 

6 (2) COVERED COMPLEX DIAGNOSTIC LABORA7 TORY TEST DEFINED.—For purposes of paragraph 

8 (1), the term ‘‘covered complex diagnostic laboratory 

9 test’’ means a diagnostic laboratory test that— 

10 (A) is an analysis of gene or protein ex11 pression, topographic genotyping, or a cancer 

12 chemotherapy sensitivity assay; 

13 (B) is described in section 1861(s)(3) of 

14 the Social Security Act (42 U.S.C. 

15 1395x(s)(3)); 

16 (C) is performed only by the laboratory of17 fering the test; and 

18 (D) is not furnished by the hospital where 

19 the specimen was collected to a patient of such 

20 hospital, directly or under arrangements (as de21 fined in section 1861(w)(1) of such Act (42 

22 U.S.C. 1395x(w)(1))) made by such hospital. 

23 (b) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—The provisions of subsection 

2 (a) shall apply to tests furnished on or after July 1, 

3 2011, and before the earlier of— 

4 (A) July 1, 2013; and 

5 (B) the date that the Chief Actuary of the 

6 Centers for Medicare & Medicaid Services sub7 mits a report to the Committee on Ways and 

8 Means and the Committee on Energy and Com9 merce of the House of Representatives and the 

10 Committee on Finance of the Senate and to the 

11 Secretary of Health and Human Services pur12 suant to paragraph (2). 

13 (2) REPORT IF SPENDING LIMIT REACHED.— 

14 (A) IN GENERAL.—The Chief Actuary of 

15 the Centers for Medicare & Medicaid Services 

16 shall monitor expenditures under title XVIII of 

17 the Social Security Act during the 2-year period 

18 beginning on July 1, 2011 by reason of the pro19 visions of subsection (a). If the Chief Actuary 

20 determines that either of the conditions de21 scribed in subparagraph (B) have been met 

22 with respect to such 2-year period, the Chief 

23 Actuary shall submit a report to the Committee 

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1 atives and the Committee on Finance of the 

2 Senate and to the Secretary of Health and 

3 Human Services that includes a statement re4 garding such determination. 

5 (B) CONDITIONS.—The conditions de6 scribed in this subparagraph are, with respect 

7 to the 2-year period described in subparagraph 

8 (A), the following conditions: 

9 (i) That expenditures under title 

10 XVIII of the Social Security Act during 

11 such period by reason of the provisions of 

12 subsection (a) have reached $100,000,000. 

13 (ii) That payments to laboratories 

14 under such title during such period by rea15 son of such provisions have reached 

16 $100,000,000. 

17 SEC. 3115. IMPROVED ACCESS FOR CERTIFIED-MIDWIFE 

18 SERVICES. 

19 Section 1833(a)(1)(K) of the Social Security Act (42 

20 U.S.C. 1395l(a)(1)(K)) is amended by inserting ‘‘(or 100 

21 percent for services furnished on or after January 1, 

22 2011)’’ after ‘‘1992, 65 percent’’. 


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1 SEC. 3116. WORKING GROUP ON ACCESS TO EMERGENCY 

2 MEDICAL CARE. 

3 (a) IN GENERAL.—Not later than 60 days after the 

4 date of enactment of this Act, the Secretary of Health and 

5 Human Services (referred to in this section as the ‘‘Sec6 retary’’) shall establish a Working Group on Access to 

7 Emergency Medical Care (referred to in this section as 

8 the ‘‘working group’’). 

9 (b) MEMBERSHIP.—The membership of the working 

10 group shall include not less than 2 individuals from each 

11 of the following: 

12 (1) Representatives of emergency room physi13 cians, emergency room nurses, and other health care 

14 professionals who provide emergency medical serv15 ices. 

16 (2) Elected or appointed officials (at the Fed17 eral, State, and local levels) who are involved in pro18 grams and issues relating to the provision of emer19 gency medical services. 

20 (3) Health care consumer advocates. 

21 (4) Representatives of hospitals and health sys22 tems that provide emergency medical services. 

23 (c) COMPENSATION.—The members shall serve with24 out compensation. 

25 (d) ADMINISTRATIVE SUPPORT.—The Department of 

26 Health and Human Services shall provide appropriate adVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00902 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ministrative support and technical assistance to the work2 ing group. The working group may use the facilities of 

3 the Department of Health and Human Services, with or 

4 without reimbursement (as determined by the Secretary). 

5 (e) DUTIES.— 

6 (1) STUDY.—The working group shall identify 

7 and examine— 

8 (A) barriers contributing to delays in time9 ly processing of patients requiring admission as 

10 an inpatient of a hospital who initially sought 

11 care through the emergency department of such 

12 hospital; 

13 (B) factors in the health care delivery, fi14 nancing, and legal systems that impede or pre15 vent effective delivery of screening and sta16 bilization services furnished in hospitals that 

17 have emergency departments pursuant to the 

18 requirements under section 1867 of the Social 

19 Security Act (42 U.S.C. 1395dd) (commonly re20 ferred to as the ‘‘Emergency Medical Treat21 ment and Labor Act’’ or ‘‘EMTALA’’); and 

22 (C) best practices to improve patient flow 

23 within hospitals. 

24 (2) RECOMMENDATIONS.—The working group 

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1 ing, and diversion standards for hospitals to follow 

2 in the delivery of emergency care to patients, as well 

3 as relevant guidelines, measures, and incentives to 

4 ensure proper implementation, monitoring, and en5 forcement of such standards. 

6 (f) REPORT.—Not later than 18 months after estab7 lishment of the working group under subsection (a), the 

8 working group shall submit to Congress and the Secretary 

9 a report containing a detailed description of the rec10 ommended standards, guidelines, measures, and incentives 

11 developed under subsection (e)(2), any best practices iden12 tified under subsection (e)(1)(C), and recommendations 

13 for such legislative and administrative actions as the work14 ing group considers appropriate, including recommenda15 tions regarding— 

16 (1) Federal programs, policies, and financing 

17 needed to assure the availability of screening and 

18 stabilization services furnished in hospitals that have 

19 emergency departments pursuant to EMTALA (as 

20 described under subsection (e)(1)(B)); and 

21 (2) coordination of Federal, State, and local 

22 programs for responding to disasters and emer23 gencies. 


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1 (g) TERMINATION.—The working group shall termi2 nate upon submission of the report described under sub3 section (f). 

4 PART II—RURAL PROTECTIONS 

5 SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS 

6 PROVISION. 

7 (a) IN GENERAL.—Section 1833(t)(7)(D)(i) of the 

8 Social Security Act (42 U.S.C. 1395l(t)(7)(D)(i)) is 

9 amended— 

10 (1) in subclause (II)— 

11 (A) in the first sentence, by striking 

12 ‘‘2010’’and inserting ‘‘2012’’; and 

13 (B) in the second sentence, by striking ‘‘or 

14 2009’’ and inserting ‘‘, 2009, 2010, or 2011’’; 

15 and 

16 (2) in subclause (III), by striking ‘‘January 1, 

17 2010’’ and inserting ‘‘January 1, 2012’’. 

18 (b) PERMITTING ALL SOLE COMMUNITY HOSPITALS

19 TO BE ELIGIBLE FOR HOLD HARMLESS.—Section 

20 1833(t)(7)(D)(i)(III) of the Social Security Act (42 

21 U.S.C. 1395l(t)(7)(D)(i)(III)) is amended by adding at 

22 the end the following new sentence: ‘‘In the case of covered 

23 OPD services furnished on or after January 1, 2010, and 

24 before January 1, 2012, the preceding sentence shall be 

25 applied without regard to the 100-bed limitation.’’. 


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1 SEC. 3122. EXTENSION OF MEDICARE REASONABLE COSTS 

2 PAYMENTS FOR CERTAIN CLINICAL DIAG3 NOSTIC LABORATORY TESTS FURNISHED TO 

4 HOSPITAL PATIENTS IN CERTAIN RURAL 

5 AREAS. 

6 Section 416(b) of the Medicare Prescription Drug, 

7 Improvement, and Modernization Act of 2003 (42 U.S.C. 

8 1395l–4), as amended by section 105 of division B of the 

9 Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395l 

10 note) and section 107 of the Medicare, Medicaid, and 

11 SCHIP Extension Act of 2007 (42 U.S.C. 1395l note), 

12 is amended by inserting ‘‘or during the 2-year period be13 ginning on July 1, 2010’’ before the period at the end. 

14 SEC. 3123. EXTENSION OF THE RURAL COMMUNITY HOS15 PITAL DEMONSTRATION PROGRAM. 

16 (a) TWO-YEAR EXTENSION.—Section 410A of the 

17 Medicare Prescription Drug, Improvement, and Mod18 ernization Act of 2003 (Public Law 108–173; 117 Stat. 

19 2272) is amended by adding at the end the following new 

20 subsection: 

21 ‘‘(g) TWO-YEAR EXTENSION OF DEMONSTRATION

22 PROGRAM.— 

23 ‘‘(1) IN GENERAL.—Subject to the succeeding 

24 provisions of this subsection, the Secretary shall con25 duct the demonstration program under this section 

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1 ferred to as the ‘2-year extension period’) that be2 gins on the date immediately following the last day 

3 of the initial 5-year period under subsection (a)(5). 

4 ‘‘(2) EXPANSION OF DEMONSTRATION

5 STATES.—Notwithstanding subsection (a)(2), during 

6 the 2-year extension period, the program shall be 

7 conducted in rural areas in any State. 

8 ‘‘(3) INCREASE IN MAXIMUM NUMBER OF HOS9 PITALS PARTICIPATING IN THE DEMONSTRATION

10 PROGRAM.—Notwithstanding subsection (a)(4), dur11 ing the 2-year extension period, not more than 30 

12 rural community hospitals may participate in the 

13 demonstration program under this section. 

14 ‘‘(4) NO AFFECT ON HOSPITALS IN DEM15 ONSTRATION PROGRAM ON DATE OF ENACTMENT.— 

16 In the case of a rural community hospital that is 

17 participating in the demonstration program under 

18 this section as of the last day of the initial 5-year 

19 period, the Secretary shall provide for the continued 

20 participation of such rural community hospital in 

21 the demonstration program during the 2-year exten22 sion period unless the rural community hospital 

23 makes an election, in such form and manner as the 

24 Secretary may specify, to discontinue such participa25 tion.’’. 


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1 (b) CONFORMING AMENDMENTS.—Subsection (a)(5) 

2 of section 410A of the Medicare Prescription Drug, Im3 provement, and Modernization Act of 2003 (Public Law 

4 108–173; 117 Stat. 2272) is amended by inserting ‘‘(in 

5 this section referred to as the ‘initial 5-year period’) and, 

6 as provided in subsection (g), for the 2-year extension pe7 riod’’ after ‘‘5-year period’’. 

8 (c) TECHNICAL AMENDMENTS.— 

9 (1) Subsection (b) of section 410A of the Medi10 care Prescription Drug, Improvement, and Mod11 ernization Act of 2003 (Public Law 108–173; 117 

12 Stat. 2272) is amended— 

13 (A) in paragraph (1)(B)(ii), by striking 

14 ‘‘2)’’ and inserting ‘‘2))’’; and 

15 (B) in paragraph (2), by inserting ‘‘cost’’ 

16 before ‘‘reporting period’’ the first place such 

17 term appears in each of subparagraphs (A) and 

18 (B). 

19 (2) Subsection (f)(1) of section 410A of the 

20 Medicare Prescription Drug, Improvement, and 

21 Modernization Act of 2003 (Public Law 108–173; 

22 117 Stat. 2272) is amended— 

23 (A) in subparagraph (A)(ii), by striking 

24 ‘‘paragraph (2)’’ and inserting ‘‘subparagraph 

25 (B)’’; and 


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1 (B) in subparagraph (B), by striking 

2 ‘‘paragraph (1)(B)’’ and inserting ‘‘subpara3 graph (A)(ii)’’. 

4 SEC. 3124. EXTENSION OF THE MEDICARE-DEPENDENT 

5 HOSPITAL (MDH) PROGRAM. 

6 (a) EXTENSION OF PAYMENT METHODOLOGY.—Sec7 tion 1886(d)(5)(G) of the Social Security Act (42 U.S.C. 

8 1395ww(d)(5)(G)) is amended— 

9 (1) in clause (i), by striking ‘‘October 1, 2011’’ 

10 and inserting ‘‘October 1, 2013’’; and 

11 (2) in clause (ii)(II), by striking ‘‘October 1, 

12 2011’’ and inserting ‘‘October 1, 2013’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) EXTENSION OF TARGET AMOUNT.—Section 

15 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 

16 1395ww(b)(3)(D)) is amended— 

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

18 striking ‘‘October 1, 2011’’ and inserting ‘‘Oc19 tober 1, 2013’’; and 

20 (B) in clause (iv), by striking ‘‘through fis21 cal year 2011’’ and inserting ‘‘through fiscal 

22 year 2013’’. 

23 (2) PERMITTING HOSPITALS TO DECLINE RE24 CLASSIFICATION.—Section 13501(e)(2) of the Omni25 bus Budget Reconciliation Act of 1993 (42 U.S.C. 


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1 1395ww note) is amended by striking ‘‘through fis2 cal year 2011’’ and inserting ‘‘through fiscal year 

3 2013’’. 

4 SEC. 3125. TEMPORARY IMPROVEMENTS TO THE MEDICARE 

5 INPATIENT HOSPITAL PAYMENT ADJUST6 MENT FOR LOW-VOLUME HOSPITALS. 

7 Section 1886(d)(12) of the Social Security Act (42 

8 U.S.C. 1395ww(d)(12)) is amended— 

9 (1) in subparagraph (A), by inserting ‘‘or (D)’’ 

10 after ‘‘subparagraph (B)’’; 

11 (2) in subparagraph (B), in the matter pre12 ceding clause (i), by striking ‘‘The Secretary’’ and 

13 inserting ‘‘For discharges occurring in fiscal years 

14 2005 through 2010 and for discharges occurring in 

15 fiscal year 2013 and subsequent fiscal years, the 

16 Secretary’’; 

17 (3) in subparagraph (C)(i)— 

18 (A) by inserting ‘‘(or, with respect to fiscal 

19 years 2011 and 2012, 15 road miles)’’ after 

20 ‘‘25 road miles’’; and 

21 (B) by inserting ‘‘(or, with respect to fiscal 

22 years 2011 and 2012, 1,500 discharges of indi23 viduals entitled to, or enrolled for, benefits 

24 under part A)’’ after ‘‘800 discharges’’; and 


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1 (4) by adding at the end the following new sub2 paragraph: 

3 ‘‘(D) TEMPORARY APPLICABLE PERCENT4 AGE INCREASE.—For discharges occurring in 

5 fiscal years 2011 and 2012, the Secretary shall 

6 determine an applicable percentage increase for 

7 purposes of subparagraph (A) using a contin8 uous linear sliding scale ranging from 25 per9 cent for low-volume hospitals with 200 or fewer 

10 discharges of individuals entitled to, or enrolled 

11 for, benefits under part A in the fiscal year to 

12 0 percent for low-volume hospitals with greater 

13 than 1,500 discharges of such individuals in the 

14 fiscal year.’’. 

15 SEC. 3126. IMPROVEMENTS TO THE DEMONSTRATION 

16 PROJECT ON COMMUNITY HEALTH INTEGRA17 TION MODELS IN CERTAIN RURAL COUNTIES. 

18 (a) REMOVAL OF LIMITATION ON NUMBER OF ELIGI19 BLE COUNTIES SELECTED.—Subsection (d)(3) of section 

20 123 of the Medicare Improvements for Patients and Pro21 viders Act of 2008 (42 U.S.C. 1395i–4 note) is amended 

22 by striking ‘‘not more than 6’’. 

23 (b) REMOVAL OF REFERENCES TO RURAL HEALTH

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1 ICES IN SCOPE OF DEMONSTRATION PROJECT.—Such 

2 section 123 is amended— 

3 (1) in subsection (d)(4)(B)(i)(3), by striking 

4 subclause (III); and 

5 (2) in subsection (j)— 

6 (A) in paragraph (8), by striking subpara7 graph (B) and inserting the following: 

8 ‘‘(B) Physicians’ services (as defined in 

9 section 1861(q) of the Social Security Act (42 

10 U.S.C. 1395x(q)).’’; 

11 (B) by striking paragraph (9); and 

12 (C) by redesignating paragraph (10) as 

13 paragraph (9). 

14 SEC. 3127. MEDPAC STUDY ON ADEQUACY OF MEDICARE 

15 PAYMENTS FOR HEALTH CARE PROVIDERS 

16 SERVING IN RURAL AREAS. 

17 (a) STUDY.—The Medicare Payment Advisory Com18 mission shall conduct a study on the adequacy of pay19 ments for items and services furnished by providers of 

20 services and suppliers in rural areas under the Medicare 

21 program under title XVIII of the Social Security Act (42 

22 U.S.C. 1395 et seq.). Such study shall include an analysis 

23 of— 


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1 (1) any adjustments in payments to providers 

2 of services and suppliers that furnish items and 

3 services in rural areas; 

4 (2) access by Medicare beneficiaries to items 

5 and services in rural areas; 

6 (3) the adequacy of payments to providers of 

7 services and suppliers that furnish items and serv8 ices in rural areas; and 

9 (4) the quality of care furnished in rural areas. 

10 (b) REPORT.—Not later than January 1, 2011, the 

11 Medicare Payment Advisory Commission shall submit to 

12 Congress a report containing the results of the study con13 ducted under subsection (a). Such report shall include rec14 ommendations on appropriate modifications to any adjust15 ments in payments to providers of services and suppliers 

16 that furnish items and services in rural areas, together 

17 with recommendations for such legislation and administra18 tive action as the Medicare Payment Advisory Commission 

19 determines appropriate. 

20 SEC. 3128. TECHNICAL CORRECTION RELATED TO CRIT21 ICAL ACCESS HOSPITAL SERVICES. 

22 (a) IN GENERAL.—Subsections (g)(2)(A) and (l)(8) 

23 of section 1834 of the Social Security Act (42 U.S.C. 

24 1395m) are each amended by inserting ‘‘101 percent of’’ 

25 before ‘‘the reasonable costs’’. 


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

2 subsection (a) shall take effect as if included in the enact3 ment of section 405(a) of the Medicare Prescription Drug, 

4 Improvement, and Modernization Act of 2003 (Public Law 

5 108–173; 117 Stat. 2266). 

6 SEC. 3129. EXTENSION OF AND REVISIONS TO MEDICARE 

7 RURAL HOSPITAL FLEXIBILITY PROGRAM. 

8 (a) AUTHORIZATION.—Section 1820(j) of the Social 

9 Security Act (42 U.S.C. 1395i–4(j)) is amended— 

10 (1) by striking ‘‘2010, and for’’ and inserting 

11 ‘‘2010, for’’; and 

12 (2) by inserting ‘‘and for making grants to all 

13 States under subsection (g), such sums as may be 

14 necessary in each of fiscal years 2011 and 2012, to 

15 remain available until expended’’ before the period 

16 at the end. 

17 (b) USE OF FUNDS.—Section 1820(g)(3) of the So18 cial Security Act (42 U.S.C. 1395i–4(g)(3)) is amended— 

19 (1) in subparagraph (A), by inserting ‘‘and to 

20 assist such hospitals in participating in delivery sys21 tem reforms under the provisions of and amend22 ments made by the America’s Healthy Future Act of 

23 2009, such as value-based purchasing programs, ac24 countable care organizations under section 1899, the 

25 National pilot program on payment bundling under 


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1 section 1866D, and other delivery system reform 

2 programs determined appropriate by the Secretary’’ 

3 before the period at the end; and 

4 (2) in subparagraph (E)— 

5 (A) by striking ‘‘, and to offset’’ and in6 serting ‘‘, to offset’’; and 

7 (B) by inserting ‘‘and to participate in de8 livery system reforms under the provisions of 

9 and amendments made by the America’s 

10 Healthy Future Act of 2009, such as value11 based purchasing programs, accountable care 

12 organizations under section 1899, the National 

13 pilot program on payment bundling under sec14 tion 1866D, and other delivery system reform 

15 programs determined appropriate by the Sec16 retary’’ before the period at the end. 

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

18 this section shall apply to grants made on or after January 

19 1, 2010. 

20 PART III—IMPROVING PAYMENT ACCURACY 

21 SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH 

22 CARE. 

23 (a) REBASING HOME HEALTH PROSPECTIVE PAY24 MENT AMOUNT.— 


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1 (1) IN GENERAL.—Section 1895(b)(3)(A) of the 

2 Social Security Act (42 U.S.C. 1395fff(b)(3)(A)) is 

3 amended— 

4 (A) in clause (i)(III), by striking ‘‘For pe5 riods’’ and inserting ‘‘Subject to clause (iii), for 

6 periods’’; and 

7 (B) by adding at the end the following new 

8 clause: 

9 ‘‘(iii) ADJUSTMENT FOR 2013 AND

10 SUBSEQUENT YEARS.— 

11 ‘‘(I) IN GENERAL.—Subject to 

12 subclause (II), for 2013 and subse13 quent years, the amount (or amounts) 

14 that would otherwise be applicable 

15 under clause (i)(III) shall be adjusted 

16 by a percentage determined appro17 priate by the Secretary to reflect such 

18 factors as changes in the number of 

19 visits in an episode, the mix of serv20 ices in an episode, the level of inten21 sity of services in an episode, the av22 erage cost of providing care per epi23 sode, and other factors that the Sec24 retary considers to be relevant. In 

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1 ceding sentence, the Secretary shall 

2 consider differences between hospital3 based and freestanding agencies, be4 tween for-profit and nonprofit agen5 cies, and between the resource costs of 

6 urban and rural agencies. Such ad7 justment shall be made before the up8 date under subparagraph (B) is ap9 plied for the year. 

10 ‘‘(II) TRANSITION.—The Sec11 retary shall provide for a 4-year 

12 phase-in (in equal increments) of the 

13 adjustment under subclause (I), with 

14 such adjustment being fully imple15 mented for 2016. During each year of 

16 such phase-in, the amount of any ad17 justment under subclause (I) for the 

18 year may not exceed 3.5 percent of 

19 the amount (or amounts) applicable 

20 under clause (i)(III) as of the date of 

21 enactment of the America’s Healthy 

22 Future Act of 2009.’’. 

23 (2) MEDPAC STUDY AND REPORT.— 

24 (A) STUDY.—The Medicare Payment Advi25 sory Commission shall conduct a study on the 


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1 implementation of the amendments made by 

2 paragraph (1). Such study shall include an 

3 analysis of the impact of such amendments 

4 on— 

5 (i) access to care; 

6 (ii) quality outcomes; 

7 (iii) the number of home health agen8 cies; and 

9 (iv) rural agencies, urban agencies, 

10 for-profit agencies, and nonprofit agencies. 

11 (B) REPORT.—Not later than January 1, 

12 2015, the Medicare Payment Advisory Commis13 sion shall submit to Congress a report on the 

14 study conducted under subparagraph (A), to15 gether with recommendations for such legisla16 tion and administrative action as the Commis17 sion determines appropriate. 

18 (b) PROGRAM-SPECIFIC OUTLIER CAP.—Section 

19 1895(b) of the Social Security Act (42 U.S.C. 1395fff(b)) 

20 is amended— 

21 (1) in paragraph (3)(C), by striking ‘‘the aggre22 gate’’ and all that follows through the period at the 

23 end and inserting ‘‘5 percent of the total payments 

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1 ment system under this subsection for the period.’’; 

2 and 

3 (2) in paragraph (5)— 

4 (A) by striking ‘‘OUTLIER.—The Sec5 retary’’ and inserting the following: 

6 ‘‘OUTLIER.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graphs (B) and (C), the Secretary’’; 

9 (B) in subparagraph (A), as added by sub10 paragraph (A), by striking ‘‘5 percent’’ and in11 serting ‘‘2.5 percent’’; and 

12 (C) by adding at the end the following new 

13 subparagraph: 

14 ‘‘(B) PROGRAM SPECIFIC OUTLIER CAP.— 

15 The estimated total amount of additional pay16 ments or payment adjustments made under 

17 subparagraph (A) with respect to a home health 

18 agency for a year (beginning with 2011) may 

19 not exceed an amount equal to 10 percent of 

20 the estimated total amount of payments made 

21 under this section (without regard to this para22 graph) with respect to the home health agency 

23 for the year.’’. 

24 (c) APPLICATION OF THE MEDICARE RURAL HOME

25 HEALTH ADD-ON POLICY.—Section 421 of the Medicare 


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1 Prescription Drug, Improvement, and Modernization Act 

2 of 2003 (Public Law 108–173; 117 Stat. 2283), as 

3 amended by section 5201(b) of the Deficit Reduction Act 

4 of 2005 (Public Law 109–171; 120 Stat. 46), is amend5 ed— 

6 (1) in the section heading, by striking ‘‘ONE7 YEAR’’ and inserting ‘‘TEMPORARY’’; and 

8 (2) in subsection (a)— 

9 (A) by striking ‘‘, and episodes’’ and in10 serting ‘‘, episodes’’; 

11 (B) by inserting ‘‘and episodes and visits 

12 ending on or after January 1, 2010, and before 

13 January 1, 2016,’’ after ‘‘January 1, 2007,’’; 

14 and 

15 (C) by inserting ‘‘(or, in the case of epi16 sodes and visits ending on or after January 1, 

17 2010, and before January 1, 2016, 3 percent)’’ 

18 before the period at the end. 

19 (d) STUDY AND REPORT ON THE DEVELOPMENT OF

20 HOME HEALTH PAYMENT REFORMS IN ORDER TO EN21 SURE ACCESS TO CARE AND QUALITY SERVICES.— 

22 (1) IN GENERAL.—The Secretary of Health and 

23 Human Services (in this section referred to as the 

24 ‘‘Secretary’’) shall conduct a study to evaluate the 

25 costs and quality of care among efficient home 


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1 health agencies relative to other such agencies in 

2 providing ongoing access to care and in treating 

3 Medicare beneficiaries with varying severity levels of 

4 illness. Such study shall include an analysis of the 

5 following: 

6 (A) Methods to revise the home health pro7 spective payment system under section 1895 of 

8 the Social Security Act (42 U.S.C. 1395fff) to 

9 more accurately account for the costs related to 

10 patient severity of illness or to improving bene11 ficiary access to care, including— 

12 (i) payment adjustments for services 

13 that may be under- or over-valued; 

14 (ii) necessary changes to reflect the 

15 resource use relative to providing home 

16 health services to low-income Medicare 

17 beneficiaries or Medicare beneficiaries liv18 ing in medically underserved areas; 

19 (iii) ways the outlier payment may be 

20 improved to more accurately reflect the 

21 cost of treating Medicare beneficiaries with 

22 high severity levels of illness; 

23 (iv) the role of quality of care incen24 tives and penalties in driving provider and 

25 patient behavior; 


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1 (v) improvements in the application of 

2 a wage index; and 

3 (vi) other areas determined appro4 priate by the Secretary. 

5 (B) The validity and reliability of re6 sponses on the OASIS instrument with par7 ticular emphasis on questions that relate to 

8 higher payment under the home health prospec9 tive payment system and higher outcome scores 

10 under Home Care Compare. 

11 (C) Additional research or payment revi12 sions under the home health prospective pay13 ment system that may be necessary to set the 

14 payment rates for home health services based 

15 on costs of high-quality and efficient home 

16 health agencies or to improve Medicare bene17 ficiary access to care. 

18 (D) A timetable for implementation of any 

19 appropriate changes based on the analysis of 

20 the matters described in subparagraphs (A), 

21 (B), and (C). 

22 (E) Other areas determined appropriate by 

23 the Secretary. 

24 (2) CONSIDERATIONS.—In conducting the study 

25 under paragraph (1), the Secretary shall consider 


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1 whether certain factors should be used to measure 

2 patient severity of illness and access to care, such 

3 as— 

4 (A) population density and relative patient 

5 access to care; 

6 (B) variations in service costs for providing 

7 care to individuals who are dually eligible under 

8 the Medicare and Medicaid programs; 

9 (C) the presence of severe or chronic dis10 eases, as evidenced by multiple, discontinuous 

11 home health episodes; 

12 (D) poverty status, as evidenced by the re13 ceipt of Supplemental Security Income under 

14 title XVI of the Social Security Act; 

15 (E) the absence of caregivers; 

16 (F) language barriers; 

17 (G) atypical transportation costs; 

18 (H) security costs; and 

19 (I) other factors determined appropriate by 

20 the Secretary. 

21 (3) REPORT.—Not later than March 1, 2011, 

22 the Secretary shall submit to Congress a report on 

23 the study conducted under paragraph (1), together 

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1 ministrative action as the Secretary determines ap2 propriate. 

3 (4) CONSULTATIONS.—In conducting the study 

4 under paragraph (1) and preparing the report under 

5 paragraph (3), the Secretary shall consult with— 

6 (A) stakeholders representing home health 

7 agencies; 

8 (B) groups representing Medicare bene9 ficiaries; 

10 (C) the Medicare Payment Advisory Com11 mission; 

12 (D) the Inspector General of the Depart13 ment of Health and Human Services; and 

14 (E) the Comptroller General of the United 

15 States. 

16 (5) TEMPORARY MEDICARE ADD-ON PAYMENT

17 BASED ON THE RESULTS OF THE STUDY.— 

18 (A) IN GENERAL.—Subject to subpara19 graph (D), taking into account the results of 

20 the study conducted under paragraph (1), the 

21 Secretary may, as determined appropriate, pro22 vide for a temporary add-on payment for home 

23 health services furnished under the Medicare 

24 program during the period beginning on Janu25 ary 1, 2012 and ending on December 31, 2018. 


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1 Such add-on payment shall be targeted toward 

2 ensuring access to care for Medicare bene3 ficiaries with high severity of levels of illness or 

4 improving access to care for low-income or un5 derserved Medicare beneficiaries. Such add-on 

6 payment, with respect to a home health service, 

7 shall not exceed an amount equal to three per8 cent of the payment amount that would other9 wise be made under section 1895 of the Social 

10 Security Act (42 U.S.C. 1395fff) for the serv11 ice. 

12 (B) WAIVING BUDGET NEUTRALITY.—The 

13 Secretary shall not reduce the standard pro14 spective payment amount (or amounts) under 

15 such section 1895 applicable to home health 

16 services furnished during a period to offset any 

17 increase in payments during such period result18 ing from the application of subparagraph (A). 

19 (C) NO EFFECT ON SUBSEQUENT PERI20 ODS.—An payment increase resulting from the 

21 application of subparagraph (A) for a period— 

22 (i) shall not apply to payments for 

23 home health services under title XVIII 

24 after such period; and 


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1 (ii) shall not be taken into account in 

2 calculating the payment amounts applica3 ble for such services after such period. 

4 (D) FUNDING.—The Secretary shall pro5 vide for the transfer from the Federal Hospital 

6 Insurance Trust Fund under section 1817 of 

7 the Social Security Act (42 U.S.C. 1395i) and 

8 the Federal Supplementary Medical Insurance 

9 Trust Fund established under section 1841 of 

10 such Act (42 U.S.C. 1395t), in such proportion 

11 as the Secretary determines appropriate, of 

12 $500,000,000 for the period of fiscal years 

13 2012 through 2019 for the purpose of making 

14 add-on payments under subparagraph (A). 

15 (E) LIMITATION ON REVIEW.—There shall 

16 be no administrative or judicial review under 

17 section 1869, section 1878, or otherwise of the 

18 implementation of this paragraph. 

19 SEC. 3132. HOSPICE REFORM. 

20 (a) HOSPICE CARE PAYMENT REFORMS.— 

21 (1) IN GENERAL.—Section 1814(i) of the Social 

22 Security Act (42 U.S.C. 1395f(i)) is amended by 

23 adding at the end the following new paragraph: 

24 ‘‘(6)(A) The Secretary shall collect additional 

25 data and information as the Secretary determines 


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1 appropriate to revise payments for hospice care 

2 under this subsection pursuant to subparagraph (D) 

3 and for other purposes as determined appropriate by 

4 the Secretary. The Secretary shall begin to collect 

5 this data by not later than January 1, 2011. 

6 ‘‘(B) The additional data and information to be 

7 collected under subparagraph (A) may include data 

8 and information on— 

9 ‘‘(i) charges and payments; 

10 ‘‘(ii) the number of days of hospice care 

11 which are attributable to individuals who are 

12 entitled to, or enrolled for, benefits under part 

13 A or enrolled for benefits under part B; and 

14 ‘‘(iii) with respect to each type of service 

15 included in hospice care— 

16 ‘‘(I) the number of days of hospice 

17 care attributable to the type of service; 

18 ‘‘(II) the cost of the type of service; 

19 and 

20 ‘‘(III) the amount of payment for the 

21 type of service; 

22 ‘‘(iv) charitable contributions and other 

23 revenue of the hospice program; 

24 ‘‘(v) the number of hospice visits; 


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1 ‘‘(vi) the type of practitioner providing the 

2 visit; and 

3 ‘‘(vii) the length of the visit and other 

4 basic information with respect to the visit. 

5 ‘‘(C) The Secretary may collect the additional 

6 data and information under subparagraph (A) on 

7 cost reports, claims, or other mechanisms as the 

8 Secretary determines to be appropriate. 

9 ‘‘(D)(i) Notwithstanding the preceding para10 graphs of this subsection, not later than October 1, 

11 2013, the Secretary shall, by regulation, implement 

12 revisions to the methodology for determining the 

13 payment rates for routine home care and other serv14 ices included in hospice care under this part, as the 

15 Secretary determines to be appropriate. Such revi16 sions may be based on an analysis of data and infor17 mation collected under subparagraph (A). Such revi18 sions may include adjustments to per diem payments 

19 that reflect changes in resource intensity in pro20 viding such care and services during the course of 

21 the entire episode of hospice care. 

22 ‘‘(ii) Revisions in payment implemented pursu23 ant to subparagraph (D) shall result in the same es24 timated amount of aggregate expenditures under 

25 this title for hospice care furnished in the fiscal year 


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1 in which such revisions in payment are implemented 

2 as would have been made under this title for such 

3 care if such revisions had not been implemented. 

4 ‘‘(E) The Secretary shall consult with hospice 

5 programs and the Medicare Payment Advisory Com6 mission regarding the additional data and informa7 tion to be collected under subparagraph (A) and the 

8 payment revisions under subparagraph (D).’’. 

9 (2) CONFORMING AMENDMENTS.—Section 

10 1814(i)(1)(C) of the Social Security Act (42 U.S.C. 

11 1395f(i)(1)(C)) is amended— 

12 (A) in clause (ii)— 

13 (i) in the matter preceding subclause 

14 (I), by inserting ‘‘(before 2014)’’ after 

15 ‘‘subsequent fiscal year’’; and 

16 (ii) in subclause (VII), by inserting 

17 ‘‘(before 2014)’’ after ‘‘subsequent fiscal 

18 year’’; and 

19 (B) by adding at the end the following new 

20 clause: 

21 ‘‘(iii) With respect to routine home 

22 care and other services included in hospice 

23 care furnished on or after October 1, 2013, 

24 the payment rates for such care and serv25 ices shall be— 


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1 ‘‘(I) for fiscal year 2014, the 

2 payment rates determined under the 

3 methodology implemented under para4 graph (6)(D); and 

5 ‘‘(II) for a subsequent fiscal year, 

6 the payment rates in effect under this 

7 clause during the preceding fiscal year 

8 increased by the market basket per9 centage increase for the fiscal year.’’. 

10 (b) ADOPTION OF MEDPAC HOSPICE PROGRAM ELI11 GIBILITY RECERTIFICATION RECOMMENDATIONS.—Sec12 tion 1814(a)(7) of the Social Security Act (42 U.S.C. 

13 1395f(a)(7)) is amended— 

14 (1) in subparagraph (B), by striking ‘‘and’’ at 

15 the end; and 

16 (2) by adding at the end the following new sub17 paragraph: 

18 ‘‘(D) on and after January 1, 2011— 

19 ‘‘(i) a hospice physician or advance 

20 practice nurse of the individual has a face21 to-face encounter with the individual to de22 termine continued eligibility of the indi23 vidual for hospice care prior to the 180th24 day recertification and each subsequent re25 certification under subparagraph (A)(ii) 


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1 and attests that such visit took place (in 

2 accordance with procedures established by 

3 the Secretary); and 

4 ‘‘(ii) in the case of hospice care pro5 vided an individual for more than 180 days 

6 by a hospice program for which the num7 ber of such cases for such program com8 prises more than a percent (specified by 

9 the Secretary) of the total number of such 

10 cases for all programs under this title, the 

11 hospice care provided to such individual is 

12 medically reviewed (in accordance with 

13 procedures established by the Secretary).’’. 

14 SEC. 3133. IMPROVEMENT TO MEDICARE DISPROPOR15 TIONATE SHARE HOSPITAL (DSH) PAYMENTS. 

16 Section 1886 of the Social Security Act (42 U.S.C. 

17 1395ww), as amended by sections 3001, 3008, and 3025, 

18 is amended— 

19 (1) in subsection (d)(5)(F)(i), by striking 

20 ‘‘For’’ and inserting ‘‘Subject to subsection (r), for’’; 

21 and 

22 (2) by adding at the end the following new sub23 section: 

24 ‘‘(r) ADJUSTMENTS TO MEDICARE DSH PAY25 MENTS.— 


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1 ‘‘(1) EMPIRICALLY JUSTIFIED DSH PAY2 MENTS.—For fiscal year 2015 and each subsequent 

3 fiscal year, instead of the amount of dispropor4 tionate share hospital payment that would otherwise 

5 be made under subsection (d)(5)(F) to a subsection 

6 (d) hospital for the fiscal year, the Secretary shall 

7 pay to the subsection (d) hospital 25 percent of such 

8 amount (which is an amount that represents the em9 pirically justified amount for such payment, as de10 termined by the Medicare Payment Advisory Com11 mission in its March 2007 Report to the Congress). 

12 ‘‘(2) ADDITIONAL PAYMENT.—In addition to 

13 the payment made to a subsection (d) hospital under 

14 paragraph (1), for fiscal year 2015 and each subse15 quent fiscal year, the Secretary shall pay to such 

16 subsection (d) hospitals an additional amount equal 

17 to the product of the following factors: 

18 ‘‘(A) FACTOR ONE.—A factor equal to the 

19 difference between— 

20 ‘‘(i) the aggregate amount of pay21 ments that would be made to the sub22 section (d) hospital under subsection 

23 (d)(5)(F) if this subsection did not apply 

24 for such fiscal year (as estimated by the 

25 Secretary); and 


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1 ‘‘(ii) the aggregate amount of pay2 ments that are made to the subsection (d) 

3 hospital under paragraph (1) for such fis4 cal year (as so estimated). 

5 ‘‘(B) FACTOR TWO.— 

6 ‘‘(i) FISCAL YEARS 2015, 2016, AND

7 2017.—For each of fiscal years 2015, 2016, 

8 and 2017, a factor equal to 1 minus the 

9 percent change (divided by 100) in the per10 cent of individuals under the age of 65 who 

11 are uninsured, as determined by comparing 

12 the percent of such individuals— 

13 ‘‘(I) who are uninsured in 2012, 

14 the last year before coverage expan15 sion under the America’s Healthy Fu16 ture Act of 2009 (as calculated by the 

17 Secretary based on the most recent 

18 estimates available from the Director 

19 of the Congressional Budget Office 

20 prior to the date of enactment of such 

21 Act); and 

22 ‘‘(II) who are uninsured in the 

23 most recent period for which data is 

24 available (as so calculated). 


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1 ‘‘(ii) 2018 AND SUBSEQUENT

2 YEARS.—For fiscal year 2018 and each 

3 subsequent fiscal year, a factor equal to 1 

4 minus the percent change (divided by 100) 

5 in the percent of individuals who are unin6 sured, as determined by comparing the 

7 percent of individuals— 

8 ‘‘(I) who are uninsured in 2012 

9 (as estimated by the Secretary, based 

10 on data from the Census Bureau or 

11 other sources the Secretary deter12 mines appropriate, and certified by 

13 the Chief Actuary of the Centers for 

14 Medicare & Medicaid Services); and 

15 ‘‘(II) who are uninsured in the 

16 most recent period for which data is 

17 available (as so estimated and cer18 tified). 

19 ‘‘(C) FACTOR THREE.—A factor equal to 

20 the percent, for each subsection (d) hospital, 

21 that represents the quotient of— 

22 ‘‘(i) the amount of uncompensated 

23 care for such hospital for a period selected 

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1 ing, in the case where the Secretary deter2 mines that alternative data is available 

3 which is a better proxy for the costs of 

4 subsection (d) hospitals for treating the 

5 uninsured, the use of such alternative 

6 data)); and 

7 ‘‘(ii) the aggregate amount of uncom8 pensated care for all subsection (d) hos9 pitals that receive a payment under this 

10 subsection for such period (as so esti11 mated, based on such data). 

12 ‘‘(3) LIMITATIONS ON REVIEW.—There shall be 

13 no administrative or judicial review under section 

14 1869, section 1878, or otherwise of the following: 

15 ‘‘(A) Any estimate of the Secretary for 

16 purposes of determining the factors described in 

17 paragraph (2). 

18 ‘‘(B) Any period selected by the Secretary 

19 for such purposes. 

20 ‘‘(C) Any determination by the Secretary 

21 to use an alternative percent under paragraph 

22 (1)(B).’’. 


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1 SEC. 3134. MISVALUED CODES UNDER THE PHYSICIAN FEE 

2 SCHEDULE. 

3 (a) IN GENERAL.—Section 1848(c)(2) of the Social 

4 Security Act (42 U.S.C. 1395w–4(c)(2)) is amended by 

5 adding at the end the following new subparagraphs: 

6 ‘‘(K) POTENTIALLY MISVALUED CODES.— 

7 ‘‘(i) IN GENERAL.—The Secretary 

8 shall— 

9 ‘‘(I) periodically identify services 

10 as being potentially misvalued using 

11 criteria specified in clause (ii); and 

12 ‘‘(II) review and make appro13 priate adjustments to the relative val14 ues established under this paragraph 

15 for services identified as being poten16 tially misvalued under subclause (I). 

17 ‘‘(ii) IDENTIFICATION OF POTEN18 TIALLY MISVALUED CODES.—For purposes 

19 of identifying potentially misvalued services 

20 pursuant to clause (i)(I), the Secretary 

21 shall examine (as the Secretary determines 

22 to be appropriate) codes (and families of 

23 codes as appropriate) for which there has 

24 been the fastest growth; codes (and fami25 lies of codes as appropriate) that have ex26 perienced substantial changes in practice 


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1 expenses; codes for new technologies or 

2 services within an appropriate period (such 

3 as 3 years) after the relative values are ini4 tially established for such codes; multiple 

5 codes that are frequently billed in conjunc6 tion with furnishing a single service; codes 

7 with low relative values, particularly those 

8 that are often billed multiple times for a 

9 single treatment; codes which have not 

10 been subject to review since the implemen11 tation of the RBRVS (the so-called ‘Har12 vard-valued codes’); and such other codes 

13 determined to be appropriate by the Sec14 retary. 

15 ‘‘(iii) REVIEW AND ADJUSTMENTS.— 

16 ‘‘(I) The Secretary may use ex17 isting processes to receive rec18 ommendations on the review and ap19 propriate adjustment of potentially 

20 misvalued services described in clause 

21 (i)(II). 

22 ‘‘(II) The Secretary may conduct 

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1 priate to facilitate the review and ap2 propriate adjustment described in 

3 clause (i)(II). 

4 ‘‘(III) The Secretary may use 

5 analytic contractors to identify and 

6 analyze services identified under 

7 clause (i)(I), conduct surveys or col8 lect data, and make recommendations 

9 on the review and appropriate adjust10 ment of services described in clause 

11 (i)(II). 

12 ‘‘(IV) The Secretary may coordi13 nate the review and appropriate ad14 justment described in clause (i)(II) 

15 with the periodic review described in 

16 subparagraph (B). 

17 ‘‘(V) As part of the review and 

18 adjustment described in clause (i)(II), 

19 including with respect to codes with 

20 low relative values described in clause 

21 (ii), the Secretary may make appro22 priate coding revisions (including 

23 using existing processes for consider24 ation of coding changes) which may 

25 include consolidation of individual 


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1 services into bundled codes for pay2 ment under the fee schedule under 

3 subsection (b). 

4 ‘‘(VI) The provisions of subpara5 graph (B)(ii)(II) shall apply to adjust6 ments to relative value units made 

7 pursuant to this subparagraph in the 

8 same manner as such provisions apply 

9 to adjustments under subparagraph 

10 (B)(ii)(II). 

11 ‘‘(L) VALIDATING RELATIVE VALUE

12 UNITS.— 

13 ‘‘(i) IN GENERAL.—The Secretary 

14 shall establish a process to validate relative 

15 value units under the fee schedule under 

16 subsection (b). 

17 ‘‘(ii) COMPONENTS AND ELEMENTS

18 OF WORK.—The process described in 

19 clause (i) may include validation of work 

20 elements (such as time, mental effort and 

21 professional judgment, technical skill and 

22 physical effort, and stress due to risk) in23 volved with furnishing a service and may 

24 include validation of the pre-, post-, and 

25 intra-service components of work. 


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1 ‘‘(iii) SCOPE OF CODES.—The valida2 tion of work relative value units shall in3 clude a sampling of codes for services that 

4 is the same as the codes listed under sub5 paragraph (K)(ii). 

6 ‘‘(iv) METHODS.—The Secretary may 

7 conduct the validation under this subpara8 graph using methods described in sub9 clauses (I) through (V) of subparagraph 

10 (K)(iii) as the Secretary determines to be 

11 appropriate. 

12 ‘‘(v) ADJUSTMENTS.—The Secretary 

13 shall make appropriate adjustments to the 

14 work relative value units under the fee 

15 schedule under subsection (b). The provi16 sions of subparagraph (B)(ii)(II) shall 

17 apply to adjustments to relative value units 

18 made pursuant to this subparagraph in the 

19 same manner as such provisions apply to 

20 adjustments under subparagraph 

21 (B)(ii)(II).’’. 

22 (b) IMPLEMENTATION.— 

23 (1) ADMINISTRATION.— 

24 (A) Chapter 35 of title 44, United States 

25 Code and the provisions of the Federal Advisory 


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1 Committee Act (5 U.S.C. App.) shall not apply 

2 to this section or the amendment made by this 

3 section. 

4 (B) Notwithstanding any other provision of 

5 law, the Secretary may implement subpara6 graphs (K) and (L) of 1848(c)(2) of the Social 

7 Security Act, as added by subsection (a), by 

8 program instruction or otherwise. 

9 (C) Section 4505(d) of the Balanced 

10 Budget Act of 1997 is repealed. 

11 (D) Except for provisions related to con12 fidentiality of information, the provisions of the 

13 Federal Acquisition Regulation shall not apply 

14 to this section or the amendment made by this 

15 section. 

16 (2) FOCUSING CMS RESOURCES ON POTEN17 TIALLY OVERVALUED CODES.—Section 1868(a) of 

18 the Social Security Act (42 U.S.C. 1395ee(a)) is re19 pealed. 

20 SEC. 3135. MODIFICATION OF EQUIPMENT UTILIZATION 

21 FACTOR FOR ADVANCED IMAGING SERVICES. 

22 (a) ADJUSTMENT IN PRACTICE EXPENSE TO RE23 FLECT HIGHER PRESUMED UTILIZATION.—Section 1848 

24 of the Social Security Act (42 U.S.C. 1395w) is amend25 ed— 


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1 (1) in subsection (b)(4)— 

2 (A) in subparagraph (B), by striking ‘‘sub3 paragraph (A)’’ and inserting ‘‘this paragraph’’; 

4 and 

5 (B) by adding at the end the following new 

6 subparagraph: 

7 ‘‘(C) ADJUSTMENT IN PRACTICE EXPENSE

8 TO REFLECT HIGHER PRESUMED UTILIZA9 TION.—In computing the number of practice 

10 expense relative value units under subsection 

11 (c)(2)(C)(ii) with respect to advanced diagnostic 

12 imaging services (as defined in section 

13 1834(e)(1)(B)), the Secretary shall adjust such 

14 number of units so it reflects— 

15 ‘‘(i) in the case of services furnished 

16 on or after January 1, 2010, and before 

17 January 1, 2013, a 65 (rather than 50 

18 percent) presumed rate of utilization of im19 aging equipment; and 

20 ‘‘(ii) in the case of services furnished 

21 on or after January 1, 2013, a 75 percent 

22 (rather than 50 percent) presumed rate of 

23 utilization of imaging equipment.’’; and 


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1 (2) in subsection (c)(2)(B)(v)(II), by inserting 

2 ‘‘AND OTHER PROVISIONS’’ after ‘‘OPD PAYMENT

3 CAP’’. 

4 (b) ADJUSTMENT IN TECHNICAL COMPONENT ‘‘DIS5 COUNT’’ ON SINGLE-SESSION IMAGING TO CONSECUTIVE

6 BODY PARTS.—Section 1848(b)(4) of such Act is further 

7 amended by adding at the end the following new subpara8 graph: 

9 ‘‘(D) ADJUSTMENT IN TECHNICAL COMPO10 NENT DISCOUNT ON SINGLE-SESSION IMAGING

11 INVOLVING CONSECUTIVE BODY PARTS.—In the 

12 case of services furnished on or after January 

13 1, 2010, the Secretary shall increase the reduc14 tion in payments attributable to the multiple 

15 procedure payment reduction applicable to the 

16 technical component for imaging under the final 

17 rule published by the Secretary in the Federal 

18 Register on November 21, 2005 (part 405 of 

19 title 42, Code of Federal Regulations) from 25 

20 percent to 50 percent.’’. 

21 (c) GAO STUDY AND REPORT.— 

22 (1) STUDY.—The Comptroller General of the 

23 United States (in this subsection referred to as the 

24 ‘‘Comptroller General’’) shall conduct a study on the 

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1 pense to reflect higher presumed utilization under 

2 the amendments made by subsection (a) on the fol3 lowing: 

4 (A) Medicare beneficiary access to ad5 vanced diagnostic imaging services (as defined 

6 in section 1834(e)(1)(B) of the Social Security 

7 Act (42 U.S.C. 1395m(e)(1)(B)), including 

8 such access in rural areas. 

9 (B) Utilization of advanced diagnostic im10 aging services (as so defined). 

11 (C) The estimated savings to the Medicare 

12 program under title XVIII of the Social Secu13 rity Act (42 U.S.C. 1395 et seq.) during the pe14 riod of 2010 through 2019 as a result of such 

15 adjustment. 

16 (2) REPORT.—Not later than January 1, 2013, 

17 the Comptroller General shall submit to Congress a 

18 report containing the results of the study conducted 

19 under paragraph (1), together with recommenda20 tions for such legislation and administrative action 

21 as the Comptroller General determines appropriate. 


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1 SEC. 3136. REVISION OF PAYMENT FOR POWER-DRIVEN 

2 WHEELCHAIRS. 

3 (a) IN GENERAL.—Section 1834(a)(7)(A) of the So4 cial Security Act (42 U.S.C. 1395m(a)(7)(A)) is amend5 ed— 

6 (1) in clause (i)— 

7 (A) in subclause (II), by inserting ‘‘sub8 clause (III) and’’ after ‘‘Subject to’’; and 

9 (B) by adding at the end the following new 

10 subclause: 

11 ‘‘(III) SPECIAL RULE FOR

12 POWER-DRIVEN WHEELCHAIRS.—For 

13 purposes of payment for power-driven 

14 wheelchairs, subclause (II) shall be 

15 applied by substituting ‘15 percent’ 

16 and ‘6 percent’ for ‘10 percent’ and 

17 ‘7.5 percent’, respectively.’’; and 

18 (2) in clause (iii)— 

19 (A) in the heading, by inserting ‘‘COM20 PLEX, REHABILITATIVE’’ before ‘‘POWER-DRIV21 EN’’; and 

22 (B) by inserting ‘‘complex, rehabilitative’’ 

23 before ‘‘power-driven’’. 

24 (b) TECHNICAL AMENDMENT.—Section 

25 1834(a)(7)(C)(ii)(II) of the Social Security Act (42 U.S.C. 


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1 1395m(a)(7)(C)(ii)(II)) is amended by striking ‘‘(A)(ii) 

2 or’’. 

3 (c) EFFECTIVE DATE.— 

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

5 the amendments made by subsection (a) shall take 

6 effect on January 1, 2011, and shall apply to power7 driven wheelchairs furnished on or after such date. 

8 (2) APPLICATION TO COMPETITIVE BIDDING.— 

9 The amendments made by subsection (a) shall not 

10 apply to payment made for items and services fur11 nished pursuant to contracts entered into under sec12 tion 1847 of the Social Security Act (42 U.S.C. 

13 1395w–3) prior to January 1, 2011, pursuant to the 

14 implementation of subsection (a)(1)(B)(i)(I) of such 

15 section 1847. 

16 SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT. 

17 (a) EXTENSION OF SECTION 508 HOSPITAL RECLAS18 SIFICATIONS.— 

19 (1) IN GENERAL.—Subsection (a) of section 

20 106 of division B of the Tax Relief and Health Care 

21 Act of 2006 (42 U.S.C. 1395 note), as amended by 

22 section 117 of the Medicare, Medicaid, and SCHIP 

23 Extension Act of 2007 (Public Law 110–173) and 

24 section 124 of the Medicare Improvements for Pa25 tients and Providers Act of 2008 (Public Law 110– 


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1 275), is amended by striking ‘‘September 30, 2009’’ 

2 and inserting ‘‘September 30, 2011’’. 

3 (2) USE OF PARTICULAR WAGE INDEX.—For 

4 purposes of implementation of the amendment made 

5 by this subsection, the Secretary shall use the hos6 pital wage index that was promulgated by the Sec7 retary in the Federal Register on August 27, 2009 

8 (74 Fed. Reg. 43754), and any subsequent correc9 tions. 

10 (b) PLAN FOR REFORMING THE MEDICARE HOS11 PITAL WAGE INDEX SYSTEM.— 

12 (1) IN GENERAL.—Not later than December 31, 

13 2011, the Secretary of Health and Human Services 

14 (in this section referred to as the ‘‘Secretary’’) shall 

15 submit to Congress a report that includes a plan to 

16 reform the hospital wage index system under section 

17 1886 of the Social Security Act. 

18 (2) DETAILS.—In developing the plan under 

19 paragraph (1), the Secretary shall take into account 

20 the goals for reforming such system set forth in the 

21 Medicare Payment Advisory Commission June 2007 

22 report entitled ‘‘Report to Congress: Promoting 

23 Greater Efficiency in Medicare’’, including estab24 lishing a new hospital compensation index system 

25 that— 


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1 (A) uses Bureau of Labor Statistics data, 

2 or other data or methodologies, to calculate rel3 ative wages for each geographic area involved; 

4 (B) minimizes wage index adjustments be5 tween and within metropolitan statistical areas 

6 and statewide rural areas; 

7 (C) includes methods to minimize the vola8 tility of wage index adjustments that result 

9 from implementation of policy, while maintain10 ing budget neutrality in applying such adjust11 ments; 

12 (D) takes into account the effect that im13 plementation of the system would have on 

14 health care providers and on each region of the 

15 country; 

16 (E) addresses issues related to occupa17 tional mix, such as staffing practices and ratios, 

18 and any evidence on the effect on quality of 

19 care or patient safety as a result of the imple20 mentation of the system; and 

21 (F) provides for a transition. 

22 (3) CONSULTATION.—In developing the plan 

23 under paragraph (1), the Secretary shall consult 

24 with relevant affected parties. 


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1 (c) USE OF PARTICULAR RATIOS FOR DETERMINING

2 RECLASSIFICATIONS.—Section 1886(d)(10)(C) of the So3 cial Security Act (42 U.S.C. 1395ww(d)(10)(C)) is amend4 ed by adding at the end the following clause: 

5 ‘‘(vii) Notwithstanding any other provision of law, in 

6 making decisions on applications for reclassification of a 

7 subsection (d) hospital for the purposes described in clause 

8 (v) for fiscal year 2011 and each subsequent fiscal year 

9 (before the first fiscal year beginning on or after the date 

10 that is 1 year after the Secretary submits the report to 

11 Congress under section 3137(b) of the America’s Healthy 

12 Future Act of 2009), the Board shall use the ratios used 

13 in making such decisions as of September 30, 2008. This 

14 clause shall be effected in a budget neutral manner.’’. 

15 SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS. 

16 Section 1833(t) of the Social Security Act (42 U.S.C. 

17 1395l(t)) is amended by adding at the end the following 

18 new paragraph: 

19 ‘‘(18) AUTHORIZATION OF ADJUSTMENT FOR

20 CANCER HOSPITALS.— 

21 ‘‘(A) STUDY.—The Secretary shall conduct 

22 a study to determine if, under the system under 

23 this subsection, costs incurred by hospitals de24 scribed in section 1886(d)(1)(B)(v) with respect 

25 to ambulatory payment classification groups exVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00949 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ceed those costs incurred by other hospitals fur2 nishing services under this subsection (as deter3 mined appropriate by the Secretary). 

4 ‘‘(B) AUTHORIZATION OF ADJUSTMENT.— 

5 Insofar as the Secretary determines under sub6 paragraph (A) that costs incurred by hospitals 

7 described in section 1886(d)(1)(B)(v) exceed 

8 those costs incurred by other hospitals fur9 nishing services under this subsection, the Sec10 retary shall provide for an appropriate adjust11 ment under paragraph (2)(E) to reflect those 

12 higher costs effective for services furnished on 

13 or after January 1, 2011.’’. 

14 SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PROD15 UCTS. 

16 (a) IN GENERAL.—Section 1847A of the Social Secu17 rity Act (42 U.S.C. 1395w–3a) is amended— 

18 (1) in subsection (b)— 

19 (A) in paragraph (1)— 

20 (i) in subparagraph (A), by striking 

21 ‘‘or’’ at the end; 

22 (ii) in subparagraph (B), by striking 

23 the period at the end and inserting ‘‘; or’’; 

24 and 


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1 (iii) by adding at the end the fol2 lowing new subparagraph: 

3 ‘‘(C) in the case of a biosimilar biological 

4 product (as defined in subsection (c)(6)(H)), 

5 the amount determined under paragraph (8).’’; 

6 and 

7 (B) by adding at the end the following new 

8 paragraph: 

9 ‘‘(8) BIOSIMILAR BIOLOGICAL PRODUCT.—The 

10 amount specified in this paragraph for a biosimilar 

11 biological product described in paragraph (1)(C) is 

12 the sum of— 

13 ‘‘(A) the average sales price as determined 

14 using the methodology described under para15 graph (6) applied to a biosimilar biological 

16 product for all National Drug Codes assigned to 

17 such product in the same manner as such para18 graph is applied to drugs described in such 

19 paragraph; and 

20 ‘‘(B) 6 percent of the amount determined 

21 under paragraph (4) for the reference biological 

22 product (as defined in subsection (c)(6)(I)).’’; 

23 and 

24 (2) in subsection (c)(6), by adding at the end 

25 the following new subparagraph: 


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1 ‘‘(H) BIOSIMILAR BIOLOGICAL PRODUCT.— 

2 The term ‘biosimilar biological product’ means 

3 a biological product approved under an abbre4 viated application for a license of a biological 

5 product that relies in part on data or informa6 tion in an application for another biological 

7 product licensed under section 351 of the Pub8 lic Health Service Act. 

9 ‘‘(I) REFERENCE BIOLOGICAL PRODUCT.— 

10 The term ‘reference biological product’ means 

11 the biological product licensed under such sec12 tion 351 that is referred to in the application 

13 described in subparagraph (H) of the biosimilar 

14 biological product.’’. 

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

16 subsection (a) shall apply to payments for biosimilar bio17 logical products beginning with the first day of the second 

18 calendar quarter after enactment of legislation providing 

19 for a biosimilar pathway (as determined by the Secretary). 

20 SEC. 3140. PUBLIC MEETING AND REPORT ON PAYMENT 

21 SYSTEMS FOR NEW CLINICAL LABORATORY 

22 DIAGNOSTIC TESTS. 

23 (a) PUBLIC MEETING.—The Secretary of Health and 

24 Human Services (in this section referred to as the ‘‘Sec25 retary’’) shall convene a public meeting on mechanisms of 


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1 payment for new clinical laboratory diagnostic tests under 

2 title XVIII of the Social Security Act (42 U.S.C. 1395 

3 et seq.). Such public meeting shall include a discussion 

4 of how to reform such mechanisms of payment for such 

5 tests under such title. 

6 (b) REPORT.—The Secretary shall submit to Con7 gress a report containing a summary of the public meeting 

8 convened under subsection (a), together with recommenda9 tions for such legislation and administrative action the 

10 Secretary determines appropriate. 

11 SEC. 3141. MEDICARE HOSPICE CONCURRENT CARE DEM12 ONSTRATION PROGRAM. 

13 (a) ESTABLISHMENT.— 

14 (1) IN GENERAL.—The Secretary of Health and 

15 Human Services (in this section referred to as the 

16 ‘‘Secretary’’) shall establish a Medicare Hospice 

17 Concurrent Care demonstration program at partici18 pating hospice programs under which Medicare 

19 beneficiaries are furnished, during the same period, 

20 hospice care and any other items or services covered 

21 under title XVIII of the Social Security Act (42 

22 U.S.C. 1395 et seq.) from funds otherwise paid 

23 under such title to such hospice programs. 


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1 (2) DURATION.—The demonstration program 

2 under this section shall be conducted for a 3-year 

3 period. 

4 (3) SITES.—The Secretary shall establish a 

5 total of 26 sites in the United States at which the 

6 demonstration program under this section shall be 

7 conducted. Such sites shall be located in urban and 

8 rural areas. 

9 (b) INDEPENDENT EVALUATION AND REPORTS.— 

10 (1) INDEPENDENT EVALUATION.—The Sec11 retary shall provide for the conduct of an inde12 pendent evaluation of the demonstration program 

13 under this section. Such independent evaluation 

14 shall determine whether the demonstration program 

15 has improved patient care, quality of life, and cost16 effectiveness for Medicare beneficiaries participating 

17 in the demonstration program. 

18 (2) REPORTS.—The Secretary shall submit to 

19 Congress a report containing the results of the eval20 uation conducted under paragraph (1), together with 

21 such recommendations as the Secretary determines 

22 appropriate. 

23 (c) BUDGET NEUTRALITY.—With respect to the 3- 

24 year period of the demonstration program under this sec25 tion, the Secretary shall ensure that the aggregate expendVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00954 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 itures under title XVIII for such period shall not exceed 

2 the aggregate expenditures that would have been expended 

3 under such title if the demonstration program under this 

4 section had not been implemented. 

5 SEC. 3142. APPLICATION OF BUDGET NEUTRALITY ON A NA6 TIONAL BASIS IN THE CALCULATION OF THE 

7 MEDICARE HOSPITAL WAGE INDEX FLOOR 

8 FOR EACH ALL-URBAN AND RURAL STATE. 

9 In the case of discharges occurring on or after Octo10 ber 1, 2010, for purposes of applying section 4410 of the 

11 Balanced Budget Act of 1997 (42 U.S.C. 1395ww note) 

12 and paragraph (h)(4) of section 412.64 of title 42, Code 

13 of Federal Regulations, the Secretary of Health and 

14 Human Services shall administer subsection (b) of such 

15 section 4410 and paragraph (e) of such section 412.64 

16 in the same manner as the Secretary administered such 

17 subsection (b) and paragraph (e) for discharges occurring 

18 during fiscal year 2008 (through a uniform, national ad19 justment to the area wage index). 

20 SEC. 3143. HHS STUDY ON URBAN MEDICARE-DEPENDENT 

21 HOSPITALS. 

22 (a) STUDY.— 

23 (1) IN GENERAL.—The Secretary of Health and 

24 Human Services (in this section referred to as the 

25 ‘‘Secretary’’) shall conduct a study on the need for 


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1 an additional payment for urban Medicare-depend2 ent hospitals for inpatient hospital services under 

3 section 1886 of the Social Security Act (42 U.S.C. 

4 1395ww). Such study shall include an analysis of— 

5 (A) the Medicare inpatient margins of 

6 urban Medicare-dependent hospitals, as com7 pared to other hospitals which receive 1 or more 

8 additional payments or adjustments under such 

9 section (including those payments or adjust10 ments described in paragraph (2)(A)); and 

11 (B) whether payments to medicare-depend12 ent, small rural hospitals under subsection 

13 (d)(5)(G) of such section should be applied to 

14 urban Medicare-dependent hospitals. 

15 (2) URBAN MEDICARE-DEPENDENT HOSPITAL

16 DEFINED.—For purposes of this section, the term 

17 ‘‘urban Medicare-dependent hospital’’ means a sub18 section (d) hospital (as defined in subsection 

19 (d)(1)(B) of such section) that— 

20 (A) does not receive any additional pay21 ment or adjustment under such section, such as 

22 payments for indirect medical education costs 

23 under subsection (d)(5)(B) of such section, dis24 proportionate share payments under subsection 

25 (d)(5)(A) of such section, payments to a rural 


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1 referral center under subsection (d)(5)(C) of 

2 such section, payments to a critical access hos3 pital under section 1814(l) of such Act (42 

4 U.S.C. 1395f(l)), payments to a sole community 

5 hospital under subsection (d)(5)(D) of such sec6 tion 1886, or payments to a medicare-depend7 ent, small rural hospital under subsection 

8 (d)(5)(G) of such section 1886; and 

9 (B) for which more than 60 percent of its 

10 inpatient days or discharges during 2 of the 3 

11 most recently audited cost reporting periods for 

12 which the Secretary has a settled cost report 

13 were attributable to inpatients entitled to bene14 fits under part A of title XVIII of such Act. 

15 (b) REPORT.—Not later than 9 months after the date 

16 of enactment of this Act, the Secretary shall submit to 

17 Congress a report containing the results of the study con18 ducted under subsection (a), together with recommenda19 tions for such legislation and administrative action as the 

20 Secretary determines appropriate. 

21 Subtitle C—Provisions Relating to 

22 Part C 

23 SEC. 3201. MEDICARE ADVANTAGE PAYMENT. 

24 (a) MA BENCHMARK BASED ON PLAN’S COMPETI25 TIVE BIDS.— 


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1 (1) IN GENERAL.—Section 1853(j) of the Social 

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

3 (A) by striking ‘‘AMOUNTS.—For pur4 poses’’ and inserting ‘‘AMOUNTS.— 

5 ‘‘(1) IN GENERAL.—For purposes’’; 

6 (B) by redesignating paragraphs (1) and 

7 (2) as subparagraphs (A) and (B), respectively, 

8 and indenting the subparagraphs appropriately; 

9 (C) in subparagraph (A), as redesignated 

10 by subparagraph (B)— 

11 (i) by redesignating subparagraphs 

12 (A) and (B) as clauses (i) and (ii), respec13 tively, and indenting the clauses appro14 priately; and 

15 (ii) in clause (i), as redesignated by 

16 clause (i), by striking ‘‘an amount equal 

17 to’’ and all that follows through the end 

18 and inserting ‘‘an amount equal to— 

‘‘(I) for years before 2007, 1 19 ⁄12 of 

20 the annual MA capitation rate under 

21 section 1853(c)(1) for the area for the 

22 year, adjusted as appropriate for the 

23 purpose of risk adjustment; 

‘‘(II) for 2007 through 2011, 1 24 ⁄12

25 of the applicable amount determined 


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1 under subsection (k)(1) for the area 

2 for the year; 

3 ‘‘(III) for 2012, the sum of— 

‘‘(aa) 2 4 ⁄3 of the quotient 

5 of— 

6 ‘‘(AA) the applicable 

7 amount determined under 

8 subsection (k)(1) for the 

9 area for the year; and 

10 ‘‘(BB) 12; and 

‘‘(bb) 1 11 ⁄3 of the MA competi12 tive benchmark amount (deter13 mined under paragraph (2)) for 

14 the area for the month; 

15 ‘‘(IV) for 2013, the sum of— 

‘‘(aa) 1 16 ⁄3 of the quotient 

17 of— 

18 ‘‘(AA) the applicable 

19 amount determined under 

20 subsection (k)(1) for the 

21 area for the year; and 

22 ‘‘(BB) 12; and 

‘‘(bb) 2 23 ⁄3 of the MA competi24 tive benchmark amount (as so 


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1 determined) for the area for the 

2 month; 

3 ‘‘(V) for 2014, the MA competi4 tive benchmark amount for the area 

5 for a month in 2013 (as so deter6 mined), increased by the national per 

7 capita MA growth percentage, de8 scribed in subsection (c)(6) for 2014, 

9 but not taking into account any ad10 justment under subparagraph (C) of 

11 such subsection for a year before 

12 2004; and 

13 ‘‘(VI) for 2015 and each subse14 quent year, the MA competitive 

15 benchmark amount (as so determined) 

16 for the area for the month; or’’; 

17 (iii) in clause (ii), as redesignated by 

18 clause (i), by striking ‘‘subparagraph (A)’’ 

19 and inserting ‘‘clause (i)’’; 

20 (D) by adding at the end the following new 

21 paragraphs: 

22 ‘‘(2) COMPUTATION OF MA COMPETITIVE

23 BENCHMARK AMOUNT.— 

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B) and paragraph (3), for months in 


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1 each year (beginning with 2012) for each MA 

2 payment area the Secretary shall compute an 

3 MA competitive benchmark amount equal to the 

4 weighted average of the unadjusted MA statu5 tory non-drug monthly bid amount (as defined 

6 in section 1854(b)(2)(E)) for each MA plan in 

7 the area, with the weight for each plan being 

8 equal to the average number of beneficiaries en9 rolled under such plan in the reference month 

10 (as defined in section 1858(f)(4), except that, 

11 in applying such definition for purposes of this 

12 paragraph, ‘to compute the MA competitive 

13 benchmark amount under section 1853(j)(2)’ 

14 shall be substituted for ‘to compute the percent15 age specified in subparagraph (A) and other 

16 relevant percentages under this part’). 

17 ‘‘(B) WEIGHTING RULES.— 

18 ‘‘(i) SINGLE PLAN RULE.—In the case 

19 of an MA payment area in which only a 

20 single MA plan is being offered, the weight 

21 under subparagraph (A) shall be equal to 

22 1. 

23 ‘‘(ii) USE OF SIMPLE AVERAGE AMONG

24 MULTIPLE PLANS IF NO PLANS OFFERED

25 IN PREVIOUS YEAR.—In the case of an MA 


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1 payment area in which no MA plan was of2 fered in the previous year and more than 

3 1 MA plan is offered in the current year, 

4 the Secretary shall use a simple average of 

5 the unadjusted MA statutory non-drug 

6 monthly bid amount (as so defined) for 

7 purposes of computing the MA competitive 

8 benchmark amount under subparagraph 

9 (A). 

10 ‘‘(3) CAP ON MA COMPETITIVE BENCHMARK

11 AMOUNT.—In no case shall the MA competitive 

12 benchmark amount for an area for a month in a 

13 year be greater than the applicable amount that 

14 would (but for the application of this subsection) be 

15 determined under subsection (k)(1) for the area for 

16 the month in the year.’’; and 

17 (E) in subsection (k)(2)(B)(ii)(III), by 

18 striking ‘‘(j)(1)(A)’’ and inserting 

19 ‘‘(j)(1)(A)(i)’’. 

20 (2) CONFORMING AMENDMENTS.— 

21 (A) Section 1853(k)(2) of the Social Secu22 rity Act (42 U.S.C. 1395w–23(k)(2)) is amend23 ed— 


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1 (i) in subparagraph (A), by striking 

2 ‘‘through 2010’’ and inserting ‘‘and subse3 quent years’’; and 

4 (ii) in subparagraph (C)— 

5 (I) in clause (iii), by striking 

6 ‘‘and’’ at the end; 

7 (II) in clause (iv), by striking the 

8 period at the end and inserting ‘‘; 

9 and’’; and 

10 (III) by adding at the end the 

11 following new clause: 

12 ‘‘(v) for 2011 and subsequent years, 

13 0.00.’’. 

14 (B) Section 1854(b) of the Social Security 

15 Act (42 U.S.C. 1395w–24(b)) is amended— 

16 (i) in paragraph (3)(B)(i), by striking 

17 ‘‘1853(j)(1)’’ and inserting 

18 ‘‘1853(j)(1)(A)’’; and 

19 (ii) in paragraph (4)(B)(i), by striking 

20 ‘‘1853(j)(2)’’ and inserting 

21 ‘‘1853(j)(1)(B)’’. 

22 (C) Section 1858(f) of the Social Security 

23 Act (42 U.S.C. 1395w–27(f)) is amended— 


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1 (i) in paragraph (1), by striking 

2 ‘‘1853(j)(2)’’ and inserting 

3 ‘‘1853(j)(1)(B)’’; and 

4 (ii) in paragraph (3)(A), by striking 

5 ‘‘1853(j)(1)(A)’’ and inserting 

6 ‘‘1853(j)(1)(A)(i)’’. 

7 (D) Section 1860C–1(d)(1)(A) of the So8 cial Security Act (42 U.S.C. 1395w– 

9 29(d)(1)(A)) is amended by striking 

10 ‘‘1853(j)(1)(A)’’ and inserting 

11 ‘‘1853(j)(1)(A)(i)’’. 

12 (b) REDUCTION OF NATIONAL PER CAPITA GROWTH

13 PERCENTAGE FOR 2011.—Section 1853(c)(6) of the So14 cial Security Act (42 U.S.C. 1395w–23(c)(6)) is amend15 ed— 

16 (1) in clause (v), by striking ‘‘and’’ at the end; 

17 (2) in clause (vi)— 

18 (A) by striking ‘‘for a year after 2002’’ 

19 and inserting ‘‘for 2003 through 2010’’; and 

20 (B) by striking the period at the end and 

21 inserting a comma; and 

22 (C) by adding at the end the following new 

23 clauses: 

24 ‘‘(vii) for 2011, 3 percentage points; 

25 and 


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1 ‘‘(viii) for a year after 2011, 0 per2 centage points.’’. 

3 (c) ENHANCEMENT OF BENEFICIARY REBATES.— 

4 Section 1854(b)(1)(C)(i) of the Social Security Act (42 

5 U.S.C. 1395w–24(b)(1)(C)(i)) is amended by inserting 

6 ‘‘(or 100 percent in the case of plan years beginning on 

7 or after January 1, 2014)’’ after ‘‘75 percent’’. 

8 (d) BIDDING RULES.— 

9 (1) REQUIREMENTS FOR INFORMATION SUB10 MITTED.—Section 1854(a)(6)(A) of the Social Secu11 rity Act (42 U.S.C. 1395w–24(a)(6)(A)) is amended, 

12 in the flush matter following clause (v), by adding 

13 at the end the following sentence: ‘‘Information to 

14 be submitted under this paragraph shall be certified 

15 by a qualified member of the American Academy of 

16 Actuaries and shall meet actuarial guidelines and 

17 rules established by the Secretary under subpara18 graph (B)(v).’’. 

19 (2) ESTABLISHMENT OF ACTUARIAL GUIDE20 LINES.—Section 1854(a)(6)(B) of the Social Secu21 rity Act (42 U.S.C. 1395w–24(a)(6)(B)) is amend22 ed— 

23 (A) in clause (i), by striking ‘‘(iii) and 

24 (iv)’’ and inserting ‘‘(iii), (iv), and (v)’’; and 


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1 (B) by adding at the end the following new 

2 clause: 

3 ‘‘(v) ESTABLISHMENT OF ACTUARIAL

4 GUIDELINES.— 

5 ‘‘(I) IN GENERAL.—In order to 

6 establish fair MA competitive bench7 marks under section 1853(j)(1)(A)(i), 

8 the Secretary, acting through the 

9 Chief Actuary of the Centers for 

10 Medicare & Medicaid Services (in this 

11 clause referred to as the ‘Chief Actu12 ary’), shall establish— 

13 ‘‘(aa) actuarial guidelines 

14 for the submission of bid infor15 mation under this paragraph; 

16 and 

17 ‘‘(bb) bidding rules that are 

18 appropriate to ensure accurate 

19 bids and fair competition among 

20 MA plans. 

21 ‘‘(II) DENIAL OF BID

22 AMOUNTS.—The Secretary shall deny 

23 monthly bid amounts submitted under 

24 subparagraph (A) that do not meet 


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1 the actuarial guidelines and rules es2 tablished under subclause (I). 

3 ‘‘(III) REFUSAL TO ACCEPT CER4 TAIN BIDS DUE TO MISREPRESENTA5 TIONS AND FAILURES TO ADE6 QUATELY MEET REQUIREMENTS.—In 

7 the case where the Secretary deter8 mines that information submitted by 

9 an MA organization under subpara10 graph (A) contains consistent mis11 representations and failures to ade12 quately meet requirements of the or13 ganization, the Secretary may refuse 

14 to accept any additional such bid 

15 amounts from the organization for the 

16 plan year and the Chief Actuary shall, 

17 if the Chief Actuary determines that 

18 the actuaries of the organization were 

19 complicit in those misrepresentations 

20 and failures, report those actuaries to 

21 the Actuarial Board for Counseling 

22 and Discipline.’’. 

23 (3) EFFECTIVE DATE.—The amendments made 

24 by this subsection shall apply to bid amounts sub25 mitted on or after January 1, 2012. 


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1 (e) MA LOCAL PLAN SERVICE AREAS.— 

2 (1) IN GENERAL.—Section 1853(d) of the So3 cial Security Act (42 U.S.C. 1395w–23(d)) is 

4 amended— 

5 (A) in the subsection heading, by striking 

6 ‘‘MA REGION’’ and inserting ‘‘MA REGION; MA 

7 LOCAL PLAN SERVICE AREA’’; 

8 (B) in paragraph (1), by striking subpara9 graph (A) and inserting the following: 

10 ‘‘(A) with respect to an MA local plan— 

11 ‘‘(i) for years before 2012, an MA 

12 local area (as defined in paragraph (2)); 

13 and 

14 ‘‘(ii) for 2012 and succeeding years, a 

15 service area that is an entire urban or 

16 rural area, as applicable (as described in 

17 paragraph (5)); and’’; and 

18 (C) by adding at the end the following new 

19 paragraph: 

20 ‘‘(5) MA LOCAL PLAN SERVICE AREA.—For 

21 2012 and succeeding years, the service area for an 

22 MA local plan shall be an entire urban or rural area 

23 in each State as follows: 

24 ‘‘(A) URBAN AREAS.— 


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

2 (ii) and subparagraphs (C) and (D), the 

3 service area for an MA local plan in an 

4 urban area shall be the Core Based Statis5 tical Area (in this paragraph referred to as 

6 a ‘CBSA’) or, if applicable, a conceptually 

7 similar alternative classification, as defined 

8 by the Director of the Office of Manage9 ment and Budget. 

10 ‘‘(ii) CBSA COVERING MORE THAN

11 ONE STATE.—In the case of a CBSA (or 

12 alternative classification) that covers more 

13 than one State, the Secretary shall divide 

14 the CBSA (or alternative classification) 

15 into separate service areas with respect to 

16 each State covered by the CBSA (or alter17 native classification). 

18 ‘‘(B) RURAL AREAS.—Subject to subpara19 graphs (C) and (D), the service area for an MA 

20 local plan in a rural area shall be a county that 

21 does not qualify for inclusion in a CBSA (or al22 ternative classification), as defined by the Di23 rector of the Office of Management and Budg24 et. 


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1 ‘‘(C) REFINEMENTS TO SERVICE AREAS.— 

2 For 2015 and succeeding years, in order to re3 flect actual patterns of health care service utili4 zation, the Secretary may adjust the boundaries 

5 of service areas for MA local plans in urban 

6 areas and rural areas under subparagraphs (A) 

7 and (B), respectively, but may only do so based 

8 on recent analyses of actual patterns of care. 

9 ‘‘(D) ADDITIONAL AUTHORITY TO MAKE

10 LIMITED EXCEPTIONS TO SERVICE AREA RE11 QUIREMENTS FOR MA LOCAL PLANS.—The Sec12 retary may, in addition to any adjustments 

13 under subparagraph (C), make limited excep14 tions to service area requirements otherwise ap15 plicable under this part for MA local plans that 

16 have in effect (as of the date of enactment of 

17 the America’s Healthy Future Act of 2009)— 

18 ‘‘(i) agreements with another MA or19 ganization or MA plan that preclude the 

20 offering of benefits throughout an entire 

21 service area; or 

22 ‘‘(ii) limitations in their structural ca23 pacity to support adequate networks 

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1 sult of the delivery system model of the 

2 MA local plan.’’. 

3 (2) CONFORMING AMENDMENTS.— 

4 (A) IN GENERAL.— 

5 (i) Section 1851(b)(1) of the Social 

6 Security Act (42 U.S.C. 1395w–21(b)(1)) 

7 is amended by striking subparagraph (C). 

8 (ii) Section 1853(b)(1)(B)(i) of such 

9 Act (42 U.S.C. 1395w–23(b)(1)(B)(i))— 

10 (I) in the matter preceding sub11 clause (I), by striking ‘‘MA payment 

12 area’’ and inserting ‘‘MA local area 

13 (as defined in subsection (d)(2))’’; and 

14 (II) in subclause (I), by striking 

15 ‘‘MA payment area’’ and inserting 

16 ‘‘MA local area (as so defined)’’. 

17 (iii) Section 1853(b)(4) of such Act 

18 (42 U.S.C. 1395w–23(b)(4)) is amended 

19 by striking ‘‘Medicare Advantage payment 

20 area’’ and inserting ‘‘MA local area (as so 

21 defined)’’. 

22 (iv) Section 1853(c)(1) of such Act 

23 (42 U.S.C. 1395w–23(c)(1)) is amended— 

24 (I) in the matter preceding sub25 paragraph (A), by striking ‘‘a MediVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00971 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 care Advantage payment area that 

2 is’’; and 

3 (II) in subparagraph (D)(i), by 

4 striking ‘‘MA payment area’’ and in5 serting ‘‘MA local area (as defined in 

6 subsection (d)(2))’’. 

7 (v) Section 1854 of such Act (42 

8 U.S.C. 1395w–24) is amended by striking 

9 subsection (h). 

10 (B) EFFECTIVE DATE.—The amendments 

11 made by this paragraph shall take effect on 

12 January 1, 2012. 

13 (f) PERFORMANCE BONUSES.— 

14 (1) MA PLANS.— 

15 (A) IN GENERAL.—Section 1853 of the So16 cial Security Act (42 U.S.C. 1395w–23) is 

17 amended by adding at the end the following 

18 new subsection: 

19 ‘‘(n) PERFORMANCE BONUSES.— 

20 ‘‘(1) CARE COORDINATION AND MANAGEMENT

21 PERFORMANCE BONUS.— 

22 ‘‘(A) IN GENERAL.—For years beginning 

23 with 2014, subject to subparagraph (B), in the 

24 case of an MA plan that conducts 1 or more 

25 programs described in subparagraph (C) with 


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1 respect to the year, the Secretary shall, in addi2 tion to any other payment provided under this 

3 part, make monthly payments to the MA plan 

4 in an amount equal to the product of— 

5 ‘‘(i) 0.5 percent of the national 

6 monthly per capita cost for expenditures 

7 for individuals enrolled under the original 

8 medicare fee-for-service program for the 

9 year; and 

10 ‘‘(ii) the total number of programs de11 scribed in clauses (i) through (ix) of sub12 paragraph (C) that the Secretary deter13 mines the plan is conducting for the year 

14 under such subparagraph. 

15 ‘‘(B) LIMITATION.—In no case may the 

16 total amount of payment with respect to a year 

17 under subparagraph (A) be greater than 2 per18 cent of the national monthly per capita cost for 

19 expenditures for individuals enrolled under the 

20 original medicare fee-for-service program for 

21 the year, as determined prior to the application 

22 of risk adjustment under paragraph (4). 

23 ‘‘(C) PROGRAMS DESCRIBED.—The fol24 lowing programs are described in this para25 graph: 


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1 ‘‘(i) Care management programs 

2 that— 

3 ‘‘(I) target individuals with 1 or 

4 more chronic conditions; 

5 ‘‘(II) identify gaps in care; and 

6 ‘‘(III) facilitate improved care by 

7 using additional resources like nurses, 

8 nurse practitioners, and physician as9 sistants. 

10 ‘‘(ii) Programs that focus on patient 

11 education and self-management of health 

12 conditions, including interventions that— 

13 ‘‘(I) help manage chronic condi14 tions; 

15 ‘‘(II) reduce declines in health 

16 status; and 

17 ‘‘(III) foster patient and provider 

18 collaboration. 

19 ‘‘(iii) Transitional care interventions 

20 that focus on care provided around a hos21 pital inpatient episode, including programs 

22 that target post-discharge patient care in 

23 order to reduce unnecessary health com24 plications and readmissions. 


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1 ‘‘(iv) Patient safety programs, includ2 ing provisions for hospital-based patient 

3 safety programs in contracts that the 

4 Medicare Advantage organization offering 

5 the MA plan has with hospitals. 

6 ‘‘(v) Financial policies that promote 

7 systematic coordination of care by primary 

8 care physicians across the full spectrum of 

9 specialties and sites of care, such as med10 ical homes, capitation arrangements, or 

11 pay-for-performance programs. 

12 ‘‘(vi) Programs that address, identify, 

13 and ameliorate health care disparities 

14 among principal at-risk subpopulations. 

15 ‘‘(vii) Medication therapy manage16 ment programs that are more extensive 

17 than is required under section 1860D–4(c) 

18 (as determined by the Secretary). 

19 ‘‘(viii) Health information technology 

20 programs, including clinical decision sup21 port and other tools to facilitate data col22 lection and ensure patient-centered, appro23 priate care. 


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1 ‘‘(ix) Such other care management 

2 and coordination programs as the Sec3 retary determines appropriate. 

4 ‘‘(D) CONDUCT OF PROGRAM IN URBAN

5 AND RURAL AREAS.—An MA plan may conduct 

6 a program described in subparagraph (C) in a 

7 manner appropriate for an urban or rural area, 

8 as applicable. 

9 ‘‘(E) REPORTING OF DATA.—Each Medi10 care Advantage organization shall provide for 

11 the reporting to the Secretary of information 

12 specified by the Secretary (in order to deter13 mine whether an MA plan is eligible for a care 

14 coordination and management performance 

15 bonus under this paragraph) at such time and 

16 in such manner as the Secretary shall specify. 

17 ‘‘(F) PERIODIC AUDITING.—The Secretary 

18 shall provide for the annual auditing of pro19 grams described in subparagraph (C) for which 

20 an MA plan receives a care coordination and 

21 management performance bonus under this 

22 paragraph. The Comptroller General shall mon23 itor auditing activities conducted under this 

24 subparagraph. 

25 ‘‘(2) QUALITY PERFORMANCE BONUSES.— 


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1 ‘‘(A) QUALITY BONUS.—For years begin2 ning with 2014, the Secretary shall, in addition 

3 to any other payment provided under this part, 

4 make monthly payments to an MA plan that 

5 achieves at least a 3 star rating (or comparable 

6 rating) on a rating system described in sub7 paragraph (C) in an amount equal to— 

8 ‘‘(i) in the case of a plan that achieves 

9 a 3 star rating (or comparable rating) on 

10 such system 2 percent of the national 

11 monthly per capita cost for expenditures 

12 for individuals enrolled under the original 

13 medicare fee-for-service program for the 

14 year; and 

15 ‘‘(ii) in the case of a plan that 

16 achieves a 4 or 5 star rating (or com17 parable rating on such system, 4 percent 

18 of such national monthly per capita cost 

19 for the year. 

20 ‘‘(B) IMPROVED QUALITY BONUS.—For 

21 years beginning with 2014, in the case of an 

22 MA plan that does not receive a quality bonus 

23 under subparagraph (A) and is an improved 

24 quality MA plan with respect to the year (as 

25 identified by the Secretary), the Secretary shall, 


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1 in addition to any other payment provided 

2 under this part, make monthly payments to the 

3 MA plan in an amount equal to 1 percent of 

4 such national monthly per capita cost for the 

5 year. 

6 ‘‘(C) USE OF RATING SYSTEM.—For pur7 poses of subparagraph (A), a rating system de8 scribed in this paragraph is— 

9 ‘‘(i) a rating system that uses up to 5 

10 stars to rate clinical quality and enrollee 

11 satisfaction and performance at the Medi12 care Advantage contract or MA plan level; 

13 or 

14 ‘‘(ii) such other system established by 

15 the Secretary that provides for the deter16 mination of a comparable quality perform17 ance rating to the rating system described 

18 in clause (i). 

19 ‘‘(D) DATA USED IN DETERMINING

20 SCORE.— 

21 ‘‘(i) IN GENERAL.—The rating of an 

22 MA plan under the rating system described 

23 in subparagraph (C) with respect to a year 

24 shall be based on based on the most recent 

25 data available. 


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1 ‘‘(ii) PLANS THAT FAIL TO REPORT

2 DATA.—An MA plan which does not report 

3 data that enables the Secretary to rate the 

4 plan for purposes of subparagraph (A) or 

5 identify the plan for purposes of subpara6 graph (B) shall be counted, for purposes of 

7 such rating or identification, as having the 

8 lowest plan performance rating and the 

9 lowest percentage improvement, respec10 tively. 

11 ‘‘(3) QUALITY BONUS FOR NEW AND LOW EN12 ROLLMENT MA PLANS.— 

13 ‘‘(A) NEW MA PLANS.—For years begin14 ning with 2014, in the case of an MA plan that 

15 has been in operation for less than 3 years and 

16 was not able to receive a bonus under subpara17 graph (A) or (B) of paragraph (2) for the year, 

18 the Secretary shall, in addition to any other 

19 payment provided under this part, make month20 ly payments to the MA plan in an amount equal 

21 to 2 percent of national monthly per capita cost 

22 for expenditures for individuals enrolled under 

23 the original medicare fee-for-service program 

24 for the year. In its fourth year of operation, the 


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1 MA plan shall be paid in the same manner as 

2 other MA plans with comparable enrollment. 

3 ‘‘(B) LOW ENROLLMENT PLANS.—For 

4 years beginning with 2014, in the case of an 

5 MA plan that has low enrollment (as defined by 

6 the Secretary) and would not otherwise be able 

7 to receive a bonus under subparagraph (A) or 

8 (B) of paragraph (2) or subparagraph (A) of 

9 this paragraph for the year (referred to in this 

10 subparagraph as a ‘low enrollment plan’), the 

11 Secretary shall use a regional or local mean of 

12 the rating of all MA plans in the region or local 

13 area, as determined appropriate by the Sec14 retary, on measures used to determine whether 

15 MA plans are eligible for a quality or an im16 proved quality bonus, as applicable, to deter17 mine whether the low enrollment plan is eligible 

18 for a bonus under such a subparagraph. 

19 ‘‘(4) RISK ADJUSTMENT.—The Secretary shall 

20 risk adjust a performance bonus under this sub21 section in the same manner as the Secretary risk ad22 justs beneficiary rebates described in section 

23 1854(b)(1)(C). 

24 ‘‘(5) NOTIFICATION.—The Secretary, in the an25 nual announcement required under subsection 


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1 (b)(1)(B) for 2014 and each succeeding year, shall 

2 notify the Medicare Advantage organization of any 

3 performance bonus (including a care coordination 

4 and management performance bonus under para5 graph (1), a quality performance bonus under para6 graph (2), and a quality bonus for new and low en7 rollment plans under paragraph (3)) that the organi8 zation will receive under this subsection with respect 

9 to the year. The Secretary shall provide for the pub10 lication of the information described in the previous 

11 sentence on the Internet website of the Centers for 

12 Medicare & Medicaid Services.’’. 

13 (B) CONFORMING AMENDMENT.—Section 

14 1853(a)(1)(B) of the Social Security Act (42 

15 U.S.C. 1395w–23(a)(1)(B)) is amended— 

16 (i) in clause (i), by inserting ‘‘and any 

17 performance bonus under subsection (n)’’ 

18 before the period at the end; and 

19 (ii) in clause (ii), by striking ‘‘(G)’’ 

20 and inserting ‘‘(G), plus the amount (if 

21 any) of any performance bonus under sub22 section (n)’’. 

23 (2) APPLICATION OF PERFORMANCE BONUSES

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1 cial Security Act (42 U.S.C. 1395w–27a) is amend2 ed— 

3 (A) in subsection (f)(1), by striking ‘‘sub4 section (e)’’ and inserting ‘‘subsections (e) and 

5 (i)’’; and 

6 (B) by adding at the end the following new 

7 subsection: 

8 ‘‘(i) APPLICATION OF PERFORMANCE BONUSES TO

9 MA REGIONAL PLANS.—For years beginning with 2014, 

10 the Secretary shall apply the performance bonuses under 

11 section 1853(n) (relating to bonuses for care coordination 

12 and management, quality performance, and new and low 

13 enrollment MA plans) to MA regional plans in a similar 

14 manner as such performance bonuses apply to MA plans 

15 under such subsection.’’. 

16 (g) GRANDFATHERING SUPPLEMENTAL BENEFITS

17 FOR CURRENT ENROLLES AFTER IMPLEMENTATION OF

18 COMPETITIVE BIDDING.—Section 1853 of the Social Se19 curity Act (42 U.S.C. 1395w–23), as amended by sub20 section (f), is amended by adding at the end the following 

21 new subsection: 

22 ‘‘(o) GRANDFATHERING SUPPLEMENTAL BENEFITS

23 FOR CURRENT ENROLLES AFTER IMPLEMENTATION OF

24 COMPETITIVE BIDDING.— 


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1 ‘‘(1) IDENTIFICATION OF AREAS.—The Sec2 retary shall identify MA local areas in which, with 

3 respect to 2011, average bids submitted by an MA 

4 organization under section 1854(a) for MA local 

5 plans in the area are not greater than 75 percent of 

6 the adjusted average per capita cost for the year in7 volved, determined under section 1876(a)(4), for the 

8 area for individuals who are not enrolled in an MA 

9 plan under this part for the year, but adjusted to ex10 clude costs attributable to payments under section 

11 1848(o), 1886(n), and 1886(h). 

12 ‘‘(2) ELECTION TO PROVIDE REBATES TO

13 GRANDFATHERED ENROLLEES.— 

14 ‘‘(A) IN GENERAL.—For years beginning 

15 with 2012, each Medicare Advantage organiza16 tion offering an MA local plan in an area iden17 tified by the Secretary under paragraph (1) 

18 may elect to provide rebates to grandfathered 

19 enrollees under section 1854(b)(1)(C). In the 

20 case where an MA organization makes such an 

21 election, the monthly per capita dollar amount 

22 of such rebates shall not exceed the applicable 

23 amount for the year. 


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1 ‘‘(B) APPLICABLE AMOUNT.—For purposes 

2 of this subsection, the term ‘applicable amount’ 

3 means— 

4 ‘‘(i) for 2012, the monthly per capita 

5 dollar amount of such rebates provided to 

6 enrollees under the MA local plan with re7 spect to 2011; and 

8 ‘‘(ii) for a subsequent year, 95 percent 

9 of the amount determined under this sub10 paragraph for the preceding year. 

11 ‘‘(3) SPECIAL RULES FOR PLANS IN IDENTI12 FIED AREAS.—Notwithstanding any other provision 

13 of this part, the following shall apply with respect to 

14 each Medicare Advantage organization offering an 

15 MA local plan in an area identified by the Secretary 

16 under paragraph (1) that makes an election de17 scribed in paragraph (2): 

18 ‘‘(A) PAYMENTS.—The amount of the 

19 monthly payment under this section to the 

20 Medicare Advantage organization, with respect 

21 to coverage of a grandfathered enrollee under 

22 this part in the area for a month, shall be equal 

23 to— 

24 ‘‘(i) for 2012 and 2013, the sum of— 


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1 ‘‘(I) the bid amount under sec2 tion 1854(a) for the MA local plan; 

3 and 

4 ‘‘(II) the applicable amount (as 

5 defined in paragraph (2)(B)) for the 

6 MA local plan for the year. 

7 ‘‘(ii) for 2014 and subsequent years, 

8 the sum of— 

9 ‘‘(I) the MA competitive bench10 mark amount under subsection 

11 (j)(1)(A)(i) for the area for the 

12 month, adjusted, only to the extent 

13 the Secretary determines necessary, to 

14 account for induced utilization as a 

15 result of rebates provided to grand16 fathered enrollees (except that such 

17 adjustment shall not exceed 0.5 per18 cent of such MA competitive bench19 mark amount); and 

20 ‘‘(II) the applicable amount (as 

21 so defined) for the MA local plan for 

22 the year. 

23 ‘‘(B) REQUIREMENT TO SUBMIT BIDS

24 UNDER COMPETITIVE BIDDING.—The Medicare 

25 Advantage organization shall submit a single 


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1 bid amount under section 1854(a) for the MA 

2 local plan. The Medicare Advantage organiza3 tion shall remove from such bid amount any ef4 fects of induced demand for care that may re5 sult from the higher rebates available to grand6 fathered enrollees under this subsection. 

7 ‘‘(C) NONAPPLICATION OF BONUS PAY8 MENTS AND ANY OTHER REBATES.—The Medi9 care Advantage organization offering the MA 

10 local plan shall not be eligible for any bonus 

11 payment under subsection (n) or any rebate 

12 under this part (other than as provided under 

13 this subsection) with respect to grandfathered 

14 enrollees. 

15 ‘‘(D) NONAPPLICATION OF SERVICE

16 AREAS.—The service areas established under 

17 subsection (d)(5) shall not apply with respect to 

18 the MA local plan in the area so identified. 

19 ‘‘(E) NONAPPLICATION OF LIMITATION ON

20 APPLICATION OF PLAN REBATES TOWARD PAY21 MENT OF PART B PREMIUM.—Notwithstanding 

22 clause (iii) of section 1854(b)(1)(C), in the case 

23 of a grandfathered enrollee, a rebate under such 

24 section may be used for the purpose described 

25 in clause (ii)(III) of such section. 


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1 ‘‘(F) RISK ADJUSTMENT.—The Secretary 

2 shall risk adjust rebates to grandfathered en3 rollees under this subsection in the same man4 ner as the Secretary risk adjusts beneficiary re5 bates described in section 1854(b)(1)(C). 

6 ‘‘(4) DEFINITION OF GRANDFATHERED EN7 ROLLEE.—In this subsection, the term ‘grand8 fathered enrollee’ means an individual who is en9 rolled (as of the date of enactment of this sub10 section) in an MA local plan in an area that is iden11 tified by the Secretary under paragraph (1).’’. 

12 (h) TRANSITIONAL EXTRA BENEFITS.—Section 1853 

13 of the Social Security Act (42 U.S.C. 1395w–23), as 

14 amended by subsections (f) and (g), is amended by adding 

15 at the end the following new subsection: 

16 ‘‘(p) TRANSITIONAL EXTRA BENEFITS.— 

17 ‘‘(1) IN GENERAL.—For years beginning with 

18 2012, the Secretary shall provide transitional re19 bates under section 1854(b)(1)(C) for the provision 

20 of extra benefits (as specified by the Secretary) to 

21 enrollees described in paragraph (2). 

22 ‘‘(2) ENROLLEES DESCRIBED.—An enrollee de23 scribed in this paragraph is an individual who— 

24 ‘‘(A) enrolls in an MA local plan in an ap25 plicable area; and 


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1 ‘‘(B) experiences a significant reduction in 

2 extra benefits described in clause (ii) of section 

3 1854(b)(1)(C) as a result of competitive bidding 

4 under this part (as determined by the Sec5 retary). 

6 ‘‘(3) APPLICABLE AREAS.—In this subsection, 

7 the term ‘applicable area’ means the following: 

8 ‘‘(A) The 2 largest metropolitan statistical 

9 areas, if the Secretary determines that the total 

10 amount of such extra benefits for each enrollee 

11 for the month in those areas is greater than 

12 $100. 

13 ‘‘(B) A county where— 

14 ‘‘(i) the MA area-specific non-drug 

15 monthly benchmark amount for a month in 

16 2011 is equal to the legacy urban floor 

17 amount (as described in subsection 

18 (c)(1)(B)(iii)), as determined by the Sec19 retary for the area for 2011; 

20 ‘‘(ii) the percentage of Medicare Ad21 vantage eligible beneficiaries in the county 

22 who are enrolled in an MA plan for 2011 

23 is greater than 30 percent (as determined 

24 by the Secretary); and 


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1 ‘‘(iii) average bids submitted by an 

2 MA organization under section 1854(a) for 

3 MA local plans in the county for 2011 are 

4 not greater than the adjusted average per 

5 capita cost for the year involved, deter6 mined under section 1876(a)(4), for the 

7 county for individuals who are not enrolled 

8 in an MA plan under this part for the 

9 year, but adjusted to exclude costs attrib10 utable to payments under section 1848(o), 

11 1886(n), and 1886(h). 

12 ‘‘(C) If the Secretary determines appro13 priate, a county contiguous to an area or coun14 ty described in subparagraph (A) or (B), re15 spectively. 

16 ‘‘(4) REVIEW OF PLAN BIDS.—In the case of a 

17 bid submitted by an MA organization under section 

18 1854(a) for an MA local plan in an applicable area, 

19 the Secretary shall review such bid in order to en20 sure that extra benefits (as specified by the Sec21 retary) are provided to enrollees described in para22 graph (2). 

23 ‘‘(5) FUNDING.—The Secretary shall provide 

24 for the transfer from the Federal Hospital Insurance 

25 Trust Fund under section 1817 and the Federal 


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1 Supplementary Medical Insurance Trust Fund es2 tablished under section 1841, in such proportion as 

3 the Secretary determines appropriate, of 

4 $5,000,000,000 for the period of fiscal years 2012 

5 through 2019 for the purpose of providing transi6 tional rebates under section 1854(b)(1)(C) for the 

7 provision of extra benefits under this subsection.’’. 

8 (i) NONAPPLICATION OF COMPETITIVE BIDDING AND

9 RELATED PROVISIONS AND CLARIFICATION OF MA PAY10 MENT AREA FOR PACE PROGRAMS.— 

11 (1) NONAPPLICATION OF COMPETITIVE BID12 DING AND RELATED PROVISIONS FOR PACE PRO13 GRAMS.—Section 1894 of the Social Security Act 

14 (42 U.S.C. 1395eee) is amended— 

15 (A) by redesignating subsections (h) and 

16 (i) as subsections (i) and (j), respectively; 

17 (B) by inserting after subsection (g) the 

18 following new subsection: 

19 ‘‘(h) NONAPPLICATION OF COMPETITIVE BIDDING

20 AND RELATED PROVISIONS UNDER PART C.—With re21 spect to a PACE program under this section, the following 

22 provisions (and regulations relating to such provisions) 

23 shall not apply: 


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1 ‘‘(1) Section 1853(j)(1)(A)(i), relating to MA 

2 area-specific non-drug monthly benchmark amount 

3 being based on competitive bids. 

4 ‘‘(2) Section 1853(d)(5), relating to the estab5 lishment of MA local plan service areas. 

6 ‘‘(3) Section 1853(n), relating to the payment 

7 of performance bonuses. 

8 ‘‘(4) Section 1853(o), relating to 

9 grandfathering supplemental benefits for current en10 rollees after implementation of competitive bidding. 

11 ‘‘(5) Section 1853(p), relating to transitional 

12 extra benefits.’’. 

13 (2) SPECIAL RULE FOR MA PAYMENT AREA FOR

14 PACE PROGRAMS.—Section 1853(d) of the Social Se15 curity Act (42 U.S.C. 1395w–23(d)), as amended by 

16 subsection (e), is amended by adding at the end the 

17 following new paragraph: 

18 ‘‘(6) SPECIAL RULE FOR MA PAYMENT AREA

19 FOR PACE PROGRAMS.—For years beginning with 

20 2012, in the case of a PACE program under section 

21 1894, the MA payment area shall be the MA local 

22 area (as defined in paragraph (2)).’’. 

23 (j) LIMITATION ON EFFECTIVE DATE.—Notwith24 standing any other provision of this section or the amend25 ments made by this section, such provisions or amendVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 00991 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ments shall not take effect if the Chief Actuary of the Cen2 ters for Medicare & Medicaid Services certifies, not later 

3 than 3 months after the date of enactment of this Act, 

4 that Medicare beneficiaries currently enrolled in Medicare 

5 Advantage plans will, as a result of the implementation 

6 of those provisions or amendments, lose basic benefits 

7 which are available under parts A and B of title XVIII 

8 of the Social Security Act to individuals entitled to bene9 fits under such part A and enrolled under such part B. 

10 SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION. 

11 (a) LIMITATION ON VARIATION OF COST SHARING

12 FOR CERTAIN BENEFITS.— 

13 (1) IN GENERAL.—Section 1852(a)(1)(B) of the 

14 Social Security Act (42 U.S.C. 1395w–22(a)(1)(B)) 

15 is amended— 

16 (A) in clause (i), by inserting ‘‘, subject to 

17 clause (iii),’’ after ‘‘and B or’’; and 

18 (B) by adding at the end the following new 

19 clauses: 

20 ‘‘(iii) LIMITATION ON VARIATION OF

21 COST SHARING FOR CERTAIN BENEFITS.— 

22 Subject to clause (v), cost-sharing for serv23 ices described in clause (iv) shall not ex24 ceed the cost-sharing required for those 

25 services under parts A and B. 


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1 ‘‘(iv) SERVICES DESCRIBED.—The fol2 lowing services are described in this clause: 

3 ‘‘(I) Chemotherapy administra4 tion services. 

5 ‘‘(II) Renal dialysis services (as 

6 defined in section 1881(b)(14)(B)). 

7 ‘‘(III) Skilled nursing care. 

8 ‘‘(IV) Such other services that 

9 the Secretary determines appropriate 

10 (including services that the Secretary 

11 determines require a high level of pre12 dictability and transparency for bene13 ficiaries). 

14 ‘‘(v) EXCEPTION.—In the case of 

15 services described in clause (iv) for which 

16 there is no cost-sharing required under 

17 parts A and B, cost-sharing may be re18 quired for those services in accordance 

19 with clause (i).’’. 

20 (2) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall apply to plan years begin22 ning on or after January 1, 2011. 

23 (b) APPLICATION OF REBATES, PERFORMANCE BO24 NUSES, AND PREMIUMS.— 


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1 (1) APPLICATION OF REBATES.—Section 

2 1854(b)(1)(C) of the Social Security Act (42 U.S.C. 

3 1395w–24(b)(1)(C)) is amended— 

4 (A) in clause (ii), by striking ‘‘REBATE.— 

5 A rebate’’ and inserting ‘‘REBATE FOR PLAN

6 YEARS BEFORE 2012.—For plan years before 

7 2012, a rebate’’; 

8 (B) by redesignating clauses (iii) and (iv) 

9 as clauses (iv) and (v); and 

10 (C) by inserting after clause (ii) the fol11 lowing new clause: 

12 ‘‘(iii) FORM OF REBATE FOR PLAN

13 YEAR 2012 AND SUBSEQUENT PLAN

14 YEARS.—For plan years beginning on or 

15 after January 1, 2012, a rebate required 

16 under this subparagraph may not be used 

17 for the purpose described in clause (ii)(III) 

18 and shall be provided through the applica19 tion of the amount of the rebate in the fol20 lowing priority order: 

21 ‘‘(I) First, to use the most sig22 nificant share to meaningfully reduce 

23 cost-sharing otherwise applicable for 

24 benefits under the original medicare 

25 fee-for-service program under parts A 


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1 and B and for qualified prescription 

2 drug coverage under part D, including 

3 the reduction of any deductibles, co4 payments, and maximum limitations 

5 on out-of-pocket expenses otherwise 

6 applicable. Any reduction of maximum 

7 limitations on out-of-pocket expenses 

8 under the preceding sentence shall 

9 apply to all benefits under the original 

10 medicare fee-for-service program op11 tion. The Secretary may provide guid12 ance on meaningfully reducing cost13 sharing under this subclause, except 

14 that such guidance may not require a 

15 particular amount of cost-sharing or 

16 reduction in cost-sharing. 

17 ‘‘(II) Second, to use the next 

18 most significant share to meaningfully 

19 provide coverage of preventive and 

20 wellness health care benefits (as de21 fined by the Secretary) which are not 

22 benefits under the original medicare 

23 fee-for-service program, such as smok24 ing cessation, a free flu shot, and an 

25 annual physical examination. 


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1 ‘‘(III) Third, to use the remain2 ing share to meaningfully provide cov3 erage of other health care benefits 

4 which are not benefits under the origi5 nal medicare fee-for-service program, 

6 such as eye examinations and dental 

7 coverage, and are not benefits de8 scribed in subclause (II).’’. 

9 (2) APPLICATION OF PERFORMANCE BO10 NUSES.—Section 1853(n) of the Social Security Act, 

11 as added by section 3201(f), is amended by adding 

12 at the end the following new paragraph: 

13 ‘‘(6) APPLICATION OF PERFORMANCE BO14 NUSES.—For plan years beginning on or after Janu15 ary 1, 2014, any performance bonus paid to an MA 

16 plan under this subsection shall be used for the pur17 poses, and in the priority order, described in sub18 clauses (I) through (III) of section 

19 1854(b)(1)(C)(iii).’’. 

20 (3) APPLICATION OF MA MONTHLY SUPPLE21 MENTARY BENEFICIARY PREMIUM.—Section 

22 1854(b)(2)(C) of the Social Security Act (42 U.S.C. 

23 1395w–24(b)(2)(C)) is amended— 

24 (A) by striking ‘‘PREMIUM.—The term’’ 

25 and inserting ‘‘PREMIUM.— 


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1 ‘‘(i) IN GENERAL.—The term’’; and 

2 (i) by adding at the end the following 

3 new clause: 

4 ‘‘(ii) APPLICATION OF MA MONTHLY

5 SUPPLEMENTARY BENEFICIARY PRE6 MIUM.—For plan years beginning on or 

7 after January 1, 2012, any MA monthly 

8 supplementary beneficiary premium 

9 charged to an individual enrolled in an MA 

10 plan shall be used for the purposes, and in 

11 the priority order, described in subclauses 

12 (I) through (III) of paragraph 

13 (1)(C)(iii).’’. 

14 (c) CATEGORIZATION OF MEDICARE ADVANTAGE

15 PLANS.— 

16 (1) IN GENERAL.—Section 1851 of the Social 

17 Security Act (42 U.S.C. 1395w–21) is amended by 

18 adding at the end the following new subsection: 

19 ‘‘(k) CATEGORIZATION OF PLANS.— 

20 ‘‘(1) IN GENERAL.—Not later than January 1, 

21 2011, the Secretary shall establish 2 or more cat22 egories of MA plans offered by Medicare Advantage 

23 organizations based on the ratio of the amount de24 scribed in paragraph (2) to the aggregate monthly 

25 bid amount submitted under clause (i) of section 


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1 1854(a)(6)(A) for the year, expressed as a percent2 age. 

3 ‘‘(2) AMOUNT DESCRIBED.—The amount de4 scribed in this paragraph is the sum of— 

5 ‘‘(A) the amount of such aggregate month6 ly bid amount that is attributable under clause 

7 (ii)(III) of such section to the provision of sup8 plemental health care benefits; and 

9 ‘‘(B) the amount (if any) of any rebate 

10 under section 1853(a)(1)(E). 

11 ‘‘(3) REQUIRED INCLUSION OF CATEGORY IN

12 PLAN NAME AND MARKETING MATERIALS.—For plan 

13 years beginning on or after January 1, 2011, a 

14 Medicare Advantage organization shall ensure that 

15 the name of each MA plan offered by the Medicare 

16 Advantage organization and any marketing mate17 rials with respect to such plan include the category 

18 of the plan, as determined under paragraph (1).’’. 

19 (2) REQUIRED INCLUSION OF CATEGORY IN IN20 FORMATION PROVIDED TO PROMOTE INFORMED

21 CHOICE.—Section 1851(d)(4) of the Social Security 

22 Act (42 U.S.C. 1395w–21(d)(4)) is amended by add23 ing at the end the following new subparagraph: 

24 ‘‘(F) INFORMATION REGARDING PLAN CAT25 EGORY.—For plan years beginning on or after 


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1 January 1, 2011, the category of the plan (as 

2 determined under subsection (k)(1)).’’. 

3 SEC. 3203. APPLICATION OF CODING INTENSITY ADJUST4 MENT DURING MA PAYMENT TRANSITION. 

5 Section 1853(a)(1)(C) of the Social Security Act (42 

6 U.S.C. 1395w–23(a)(1)(C)) is amended by adding at the 

7 end the following new clause: 

8 ‘‘(iii) APPLICATION OF CODING IN9 TENSITY ADJUSTMENT FOR 2011 AND SUB10 SEQUENT YEARS.— 

11 ‘‘(I) REQUIREMENT TO APPLY IN

12 2011 THROUGH 2013.—In order to en13 sure payment accuracy, the Secretary 

14 shall conduct an analysis of the dif15 ferences described in clause (ii)(I). 

16 The Secretary shall ensure that the 

17 results of such analysis are incor18 porated into the risk scores for 2011, 

19 2012, and 2013. 

20 ‘‘(II) AUTHORITY TO APPLY IN

21 2014 AND SUBSEQUENT YEARS.—The 

22 Secretary may, as appropriate, incor23 porate the results of such analysis 

24 into the risk scores for 2014 and sub25 sequent years.’’. 


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1 SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY 

2 ELECTION PERIODS. 

3 (a) ANNUAL 45-DAY PERIOD FOR DISENROLLMENT

4 FROM MA PLANS TO ELECT TO RECEIVE BENEFITS

5 UNDER THE ORIGINAL MEDICARE FEE-FOR-SERVICE

6 PROGRAM.— 

7 (1) IN GENERAL.—Section 1851(e)(2)(C) of the 

8 Social Security Act (42 U.S.C. 1395w–1(e)(2)(C)) is 

9 amended to read as follows: 

10 ‘‘(C) ANNUAL 45-DAY PERIOD FOR

11 DISENROLLMENT FROM MA PLANS TO ELECT TO

12 RECEIVE BENEFITS UNDER THE ORIGINAL

13 MEDICARE FEE-FOR-SERVICE PROGRAM.—Sub14 ject to subparagraph (D), at any time during 

15 the first 45 days of a year (beginning with 

16 2011), an individual who is enrolled in a Medi17 care Advantage plan may change the election 

18 under subsection (a)(1), but only with respect 

19 to coverage under the original medicare fee-for20 service program under parts A and B.’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by paragraph (1) shall apply with respect to 2011 

23 and succeeding years. 

24 (b) TIMING OF THE ANNUAL, COORDINATED ELEC25 TION PERIOD UNDER PARTS C AND D.—Section 


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1 1851(e)(3)(B) of the Social Security Act (42 U.S.C. 

2 1395w–1(e)(3)(B)) is amended— 

3 (1) in clause (iii), by striking ‘‘and’’ at the end; 

4 (2) in clause (iv)— 

5 (A) by striking ‘‘and succeeding years’’ 

6 and inserting ‘‘, 2008, 2009, and 2010’’; and 

7 (B) by striking the period at the end and 

8 inserting ‘‘; and’’; and 

9 (3) by adding at the end the following new 

10 clause: 

11 ‘‘(v) with respect to 2012 and suc12 ceeding years, the period beginning on Oc13 tober 15 and ending on December 7 of the 

14 year before such year.’’. 

15 SEC. 3205. EXTENSION FOR SPECIALIZED MA PLANS FOR 

16 SPECIAL NEEDS INDIVIDUALS. 

17 (a) EXTENSION OF SNP AUTHORITY.—Section 

18 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w– 

19 28(f)(1)), as amended by section 164(a) of the Medicare 

20 Improvements for Patients and Providers Act of 2008 

21 (Public Law 110–275), is amended by striking ‘‘2011’’ 

22 and inserting ‘‘2014’’. 

23 (b) AUTHORITY TO APPLY FRAILTY ADJUSTMENT

24 UNDER PACE PAYMENT RULES.—Section 1853(a)(1)(B) 


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1 of the Social Security Act (42 U.S.C. 1395w–23(a)(1)(B)) 

2 is amended by adding at the end the following new clause: 

3 ‘‘(iv) AUTHORITY TO APPLY FRAILTY

4 ADJUSTMENT UNDER PACE PAYMENT

5 RULES FOR CERTAIN SPECIALIZED MA

6 PLANS FOR SPECIAL NEEDS INDIVID7 UALS.— 

8 ‘‘(I) IN GENERAL.—Notwith9 standing the preceding provisions of 

10 this paragraph, for plan year 2011 

11 and subsequent plan years, in the case 

12 of a plan described in subclause (II), 

13 the Secretary may apply the payment 

14 rules under section 1894(d) (other 

15 than paragraph (3) of such section) 

16 rather than the payment rules that 

17 would otherwise apply under this part, 

18 but only to the extent necessary to re19 flect the costs of treating high con20 centrations of frail individuals. 

21 ‘‘(II) PLAN DESCRIBED.—A plan 

22 described in this subclause is a spe23 cialized MA plan for special needs in24 dividuals described in section 

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1 grated with capitated contracts with 

2 States for Medicaid benefits, including 

3 long-term care, and that have similar 

4 average levels of frailty (as deter5 mined by the Secretary) as the PACE 

6 program.’’. 

7 (c) TRANSITION AND EXCEPTION REGARDING RE8 STRICTION ON ENROLLMENT.—Section 1859(f) of the So9 cial Security Act (42 U.S.C. 1395w–28(f)) is amended by 

10 adding at the end the following new paragraph: 

11 ‘‘(6) TRANSITION AND EXCEPTION REGARDING

12 RESTRICTION ON ENROLLMENT.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (C), the Secretary shall establish proce15 dures for the transition of applicable individuals 

16 to— 

17 ‘‘(i) a Medicare Advantage plan that 

18 is not a specialized MA plan for special 

19 needs individuals (as defined in subsection 

20 (b)(6)); or 

21 ‘‘(ii) the original medicare fee-for22 service program under parts A and B. 

23 ‘‘(B) APPLICABLE INDIVIDUALS.—For pur24 poses of clause (i), the term ‘applicable indi25 vidual’ means an individual who— 


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1 ‘‘(i) is enrolled under a specialized 

2 MA plan for special needs individuals (as 

3 defined in subsection (b)(6)); and 

4 ‘‘(ii) is not within the 1 or more of 

5 the classes of special needs individuals to 

6 which enrollment under the plan is re7 stricted to. 

8 ‘‘(C) EXCEPTION.—The Secretary shall 

9 provide for an exception to the transition de10 scribed in subparagraph (A) for a limited pe11 riod of time for individuals enrolled under a 

12 specialized MA plan for special needs individ13 uals described in subsection (b)(6)(B)(ii) who 

14 are no longer eligible for medical assistance 

15 under title XIX. 

16 ‘‘(D) TIMELINE FOR INITIAL TRANSI17 TION.—The Secretary shall ensure that applica18 ble individuals enrolled in a specialized MA plan 

19 for special needs individuals (as defined in sub20 section (b)(6)) prior to January 1, 2010, are 

21 transitioned to a plan or the program described 

22 in subparagraph (A) by not later than January 

23 1, 2013.’’. 

24 (d) TEMPORARY EXTENSION OF AUTHORITY TO OP25 ERATE BUT NO SERVICE AREA EXPANSION FOR DUAL


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1 SNPS THAT DO NOT MEET CERTAIN REQUIREMENTS.— 

2 Section 164(c)(2) of the Medicare Improvements for Pa3 tients and Providers Act of 2008 (Public Law 110–275) 

4 is amended by striking ‘‘December 31, 2010’’ and insert5 ing ‘‘December 31, 2012’’. 

6 (e) AUTHORITY TO REQUIRE SPECIAL NEEDS PLANS

7 BE NCQA APPROVED.—Section 1859(f) of the Social Se8 curity Act (42 U.S.C. 1395w–28(f)), as amended by sub9 sections (a) and (c), is amended— 

10 (1) in paragraph (2), by adding at the end the 

11 following new subparagraph: 

12 ‘‘(C) If applicable, the plan meets the re13 quirement described in paragraph (7).’’; 

14 (2) in paragraph (3), by adding at the end the 

15 following new subparagraph: 

16 ‘‘(E) If applicable, the plan meets the re17 quirement described in paragraph (7).’’; 

18 (3) in paragraph (4), by adding at the end the 

19 following new subparagraph: 

20 ‘‘(C) If applicable, the plan meets the re21 quirement described in paragraph (7).’’; and 

22 (4) by adding at the end the following new 

23 paragraph: 

24 ‘‘(7) AUTHORITY TO REQUIRE SPECIAL NEEDS

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1 quent years, the Secretary shall require that a Medi2 care Advantage organization offering a specialized 

3 MA plan for special needs individuals be approved 

4 by the National Committee for Quality Assurance 

5 (based on standards established by the Secretary).’’. 

6 (f) RISK ADJUSTMENT.—Section 1853(a)(1)(C) of 

7 the Social Security Act (42 U.S.C. 1395i–23(a)(1)(C)) is 

8 amended by adding at the end the following new clause: 

9 ‘‘(iii) IMPROVEMENTS TO RISK AD10 JUSTMENT FOR SPECIAL NEEDS INDIVID11 UALS WITH CHRONIC HEALTH CONDI12 TIONS.— 

13 ‘‘(I) IN GENERAL.—For 2011 

14 and subsequent years, for purposes of 

15 the adjustment under clause (i) with 

16 respect to individuals described in 

17 subclause (II), the Secretary shall use 

18 a risk score that reflects the known 

19 underlying risk profile and chronic 

20 health status of similar individuals. 

21 Such risk score shall be used instead 

22 of the default risk score for new en23 rollees in Medicare Advantage plans 

24 that are not specialized MA plans for 


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1 special needs individuals (as defined 

2 in section 1859(b)(6)). 

3 ‘‘(II) INDIVIDUALS DE4 SCRIBED.—An individual described in 

5 this subclause is a special needs indi6 vidual described in subsection 

7 (b)(6)(B)(iii) who enrolls in a special8 ized MA plan for special needs indi9 viduals on or after January 1, 2011. 

10 ‘‘(III) EVALUATION.—For 2011 

11 and periodically thereafter, the Sec12 retary shall evaluate and revise the 

13 risk adjustment system under this 

14 subparagraph in order to, as accu15 rately as possible, account for higher 

16 medical and care coordination costs 

17 associated with frailty, individuals 

18 with multiple, comorbid chronic condi19 tions, and individuals with a diagnosis 

20 of mental illness, and also to account 

21 for costs that may be associated with 

22 higher concentrations of beneficiaries 

23 with those conditions. 

24 ‘‘(IV) PUBLICATION OF EVALUA25 TION AND REVISIONS.—The Secretary 


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1 shall publish, as part of an announce2 ment under subsection (b), a descrip3 tion of any evaluation conducted 

4 under subclause (III) during the pre5 ceding year and any revisions made 

6 under such subclause as a result of 

7 such evaluation.’’. 

8 (g) TECHNICAL CORRECTION.—Section 1859(f)(5) of 

9 the Social Security Act (42 U.S.C. 1395w–28(f)(5)) is 

10 amended, in the matter preceding subparagraph (A), by 

11 striking ‘‘described in subsection (b)(6)(B)(i)’’. 

12 SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS. 

13 Section 1876(h)(5)(C)(ii) of the Social Security Act 

14 (42 U.S.C. 1395mm(h)(5)(C)(ii)) is amended, in the mat15 ter preceding subclause (I), by striking ‘‘January 1, 2010’’ 

16 and inserting ‘‘January 1, 2013’’. 

17 SEC. 3207. TECHNICAL CORRECTION TO MA PRIVATE FEE18 FOR-SERVICE PLANS. 

19 (a) CLARIFICATION REGARDING DEFINITION OF

20 NETWORK AREA.— 

21 (1) IN GENERAL.—Section 1852(d)(5)(B) of 

22 the Social Security Act (42 U.S.C. 1395w– 

23 22(d)(5)(B)) is amended by striking ‘‘network-based 

24 plans’’ and inserting ‘‘Medicare Advantage organiza25 tions offering a network-based plan’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall take effect as if included in 

3 the enactment of section 162 of the Medicare Im4 provements for Patients and Providers Act of 2008 

5 (Public Law 110–275; 122 Stat. 2569). 

6 (b) APPLICATION OF SERVICE AREA WAIVER TO

7 CERTAIN EMPLOYER PLANS.—For plan year 2011 and 

8 subsequent plan years, to the extent that the Secretary 

9 of Health and Human Services is applying the 2008 serv10 ice area extension waiver policy (as modified in the April 

11 11, 2008, Centers for Medicare & Medicaid Services’ 

12 memorandum with the subject ‘‘2009 Employer Group 

13 Waiver-Modification of the 2008 Service Area Extension 

14 Waiver Granted to Certain MA Local Coordinated Care 

15 Plans’’) to Medicare Advantage coordinated care plans, 

16 the Secretary shall extend the application of such waiver 

17 policy to employers who contract directly with the Sec18 retary as a Medicare Advantage private fee-for-service 

19 plan under section 1857(i)(2) of the Social Security Act 

20 (42 U.S.C. 1395w–27(i)(2)) and that had enrollment as 

21 of October 1, 2009. 


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1 SEC. 3208. MAKING SENIOR HOUSING FACILITY DEM2 ONSTRATION PERMANENT. 

3 (a) IN GENERAL.—Section 1859 of the Social Secu4 rity Act (42 U.S.C. 1395w–28) is amended by adding at 

5 the end the following new subsection: 

6 ‘‘(g) SPECIAL RULES FOR SENIOR HOUSING FACIL7 ITY PLANS.— 

8 ‘‘(1) IN GENERAL.—In the case of a Medicare 

9 Advantage senior housing facility plan described in 

10 paragraph (2), notwithstanding any other provision 

11 of this part to the contrary and in accordance with 

12 regulations of the Secretary, the service area of such 

13 plan may be limited to a senior housing facility in 

14 a geographic area. 

15 ‘‘(2) MEDICARE ADVANTAGE SENIOR HOUSING

16 FACILITY PLAN DESCRIBED.—For purposes of this 

17 subsection, a Medicare Advantage senior housing fa18 cility plan is a Medicare Advantage plan that— 

19 ‘‘(A) restricts enrollment of individuals 

20 under this part to individuals who reside in a 

21 continuing care retirement community (as de22 fined in section 1852(l)(4)(B)); 

23 ‘‘(B) provides primary care services onsite 

24 and has a ratio of accessible physicians to bene25 ficiaries that the Secretary determines is ade26 quate; 


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1 ‘‘(C) provides transportation services for 

2 beneficiaries to specialty providers outside of 

3 the facility; and 

4 ‘‘(D) has participated (as of December 31, 

5 2009) in a demonstration project established by 

6 the Secretary under which such a plan was of7 fered for not less than 1 year.’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall take effect on January 1, 2010, and shall 

10 apply to plan years beginning on or after such date. 

11 SEC. 3209. DEVELOPMENT OF NEW STANDARDS FOR CER12 TAIN MEDIGAP PLANS. 

13 (a) IN GENERAL.—Section 1882 of the Social Secu14 rity Act (42 U.S.C. 1395ss) is amended by adding at the 

15 end the following new subsection: 

16 ‘‘(y) DEVELOPMENT OF NEW STANDARDS FOR CER17 TAIN MEDICARE SUPPLEMENTAL POLICIES.— 

18 ‘‘(1) IN GENERAL.—The Secretary shall request 

19 the National Association of Insurance Commis20 sioners to review and revise the standards for benefit 

21 packages described in paragraph (2) under sub22 section (p)(1), to otherwise update standards to in23 clude requirements for nominal cost sharing to en24 courage the use of appropriate physicians’ services 

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1 dence published in peer-reviewed journals or current 

2 examples used by integrated delivery systems and 

3 made consistent with the rules applicable under sub4 section (p)(1)(E) with the reference to the ‘1991 

5 NAIC Model Regulation’ deemed a reference to the 

6 NAIC Model Regulation as published in the Federal 

7 Register on December 4, 1998, and as subsequently 

8 updated by the National Association of Insurance 

9 Commissioners to reflect previous changes in law 

10 and the reference to ‘date of enactment of this sub11 section’ deemed a reference to the date of enactment 

12 of the America’s Healthy Future Act of 2009. To 

13 the extent practicable, such revision shall provide for 

14 the implementation of revised standards for benefit 

15 packages as of January 1, 2015. 

16 ‘‘(2) BENEFIT PACKAGES DESCRIBED.—The 

17 benefit packages described in this paragraph are 

18 benefit packages classified as ‘C’ and ‘F’.’’. 

19 (b) CONFORMING AMENDMENT.—Section 1882(o)(1) 

20 of the Social Security Act (42 U.S.C. 1395ss(o)(1)) is 

21 amended by striking ‘‘, and (w)’’ and inserting ‘‘(w), and 

22 (y)’’. 


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1 Subtitle D—Medicare Part D Im2 provements for Prescription 

3 Drug Plans and MA–PD Plans 

4 SEC. 3301. MEDICARE PRESCRIPTION DRUG DISCOUNT 

5 PROGRAM FOR BRAND-NAME DRUGS. 

6 (a) CONDITION FOR COVERAGE OF DRUGS UNDER

7 PART D.—Part D of Title XVIII of the Social Security 

8 Act (42 U.S.C. 1395w–101 et seq.), is amended by adding 

9 at the end the following new section: 

10 ‘‘CONDITION FOR COVERAGE OF DRUGS UNDER THIS

11 PART

12 ‘‘SEC. 1860D–43. (a) IN GENERAL.—In order for 

13 coverage to be available under this part for covered part 

14 D drugs (as defined in section 1860D–2(e)) of a manufac15 turer, the manufacturer must— 

16 ‘‘(1) participate in the Medicare prescription 

17 drug discount program under section 1860D–14A; 

18 ‘‘(2) have entered into and have in effect an 

19 agreement described in subsection (b) of such sec20 tion with the Secretary; and 

21 ‘‘(3) have entered into and have in effect, under 

22 terms and conditions specified by the Secretary, a 

23 contract with a third party that the Secretary has 

24 entered into a contract with under subsection (d)(3) 

25 of such section. 


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1 ‘‘(b) EFFECTIVE DATE.—Subsection (a) shall apply 

2 to covered part D drugs dispensed under this part on or 

3 after July 1, 2010. 

4 ‘‘(c) AUTHORIZING COVERAGE FOR DRUGS NOT COV5 ERED UNDER AGREEMENTS.—Subsection (a) shall not 

6 apply to the dispensing of a covered part D drug if— 

7 ‘‘(1) the Secretary has made a determination 

8 that the availability of the drug is essential to the 

9 health of beneficiaries under this part; or 

10 ‘‘(2) the Secretary determines that in the period 

11 beginning on July 1, 2010, and ending on December 

12 31, 2010, there were extenuating circumstances. 

13 ‘‘(d) DEFINITION OF MANUFACTURER.—In this sec14 tion, the term ‘manufacturer’ has the meaning given such 

15 term in section 1860D–14(g)(5).’’. 

16 (b) MEDICARE PRESCRIPTION DRUG DISCOUNT PRO17 GRAM FOR BRAND-NAME DRUGS.—Part D of title XVIII 

18 of the Social Security Act (42 U.S.C. 1395w–101) is 

19 amended by inserting after section 1860D–14 the fol20 lowing new section: 

21 ‘‘MEDICARE PRESCRIPTION DRUG DISCOUNT PROGRAM

22 FOR BRAND-NAME DRUGS

23 ‘‘SEC. 1860D–14A. (a) ESTABLISHMENT.—The Sec24 retary shall establish a Medicare prescription drug dis25 count program (in this section referred to as the ‘pro26 gram’) by not later than July 1, 2010. Under the proVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01014 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 gram, the Secretary shall enter into agreements described 

2 in subsection (b) with manufacturers and provide for the 

3 performance of the duties described in subsection (c)(1). 

4 ‘‘(b) TERMS OF AGREEMENT.— 

5 ‘‘(1) IN GENERAL.— 

6 ‘‘(A) AGREEMENT.—An agreement under 

7 this section shall require the manufacturer to 

8 provide applicable beneficiaries access to dis9 counted prices for applicable drugs of the man10 ufacturer. 

11 ‘‘(B) PROVISION OF DISCOUNTED PRICES

12 AT THE POINT-OF-SALE.—Except as provided in 

13 subsection (c)(1)(A)(iii), such discounted prices 

14 shall be provided to the applicable beneficiary at 

15 the pharmacy or by the mail order service at 

16 the point-of-sale of an applicable drug. 

17 ‘‘(C) TIMING OF AGREEMENT.— 

18 ‘‘(i) SPECIAL RULE FOR 2010 AND

19 2011.—In order for an agreement with a 

20 manufacturer to be in effect under this 

21 section with respect to the period begin22 ning on July 1, 2010, and ending on De23 cember 31, 2011, the manufacturer shall 

24 enter into such agreement not later than 

25 March 1, 2010. 


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1 ‘‘(ii) 2012 AND SUBSEQUENT

2 YEARS.—In order for an agreement with a 

3 manufacturer to be in effect under this 

4 section with respect to plan year 2012 or 

5 a subsequent plan year, the manufacturer 

6 shall enter into such agreement (or such 

7 agreement shall be renewed under para8 graph (4)(A)) not later than January 30 of 

9 the preceding year. 

10 ‘‘(2) PROVISION OF APPROPRIATE DATA.—Each 

11 manufacturer with an agreement in effect under this 

12 section shall collect and have available appropriate 

13 data, as determined by the Secretary, to ensure that 

14 it can demonstrate compliance with the requirements 

15 of paragraph (1). 

16 ‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR

17 ADMINISTRATION OF PROGRAM.—Each manufac18 turer with an agreement in effect under this section 

19 shall comply with requirements imposed by the Sec20 retary or a third party with a contract under sub21 section (d)(3), as applicable, for purposes of admin22 istering the program, including any determination 

23 under clause (i) of subsection (c)(1)(A) or proce24 dures established under such subsection (c)(1)(A). 

25 ‘‘(4) LENGTH OF AGREEMENT.— 


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1 ‘‘(A) IN GENERAL.—An agreement under 

2 this section shall be effective for an initial pe3 riod of not less than 18 months and shall be 

4 automatically renewed for a period of not less 

5 than 1 year unless terminated under subpara6 graph (B). 

7 ‘‘(B) TERMINATION.— 

8 ‘‘(i) BY THE SECRETARY.—The Sec9 retary may provide for termination of an 

10 agreement under this section for violation 

11 of the requirements of the agreement or 

12 other good cause shown. Such termination 

13 shall not be effective earlier than 30 days 

14 after the date of notice of such termi15 nation. The Secretary shall provide, upon 

16 request, a manufacturer with a hearing 

17 concerning such a termination, but such 

18 hearing shall not delay the effective date of 

19 the termination. 

20 ‘‘(ii) BY A MANUFACTURER.—A man21 ufacturer may terminate an agreement 

22 under this section for any reason. Any 

23 such termination shall not be effective, 

24 with respect to a plan year— 


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1 ‘‘(I) if the termination occurs be2 fore January 30 of a plan year, the 

3 end of the plan year; and 

4 ‘‘(II) if the termination occurs on 

5 or after January 30 of a plan year, 

6 the end of the succeeding plan year. 

7 ‘‘(iii) EFFECTIVENESS OF TERMI8 NATION.—Any termination under this sub9 paragraph shall not affect discounts for 

10 applicable drugs of the manufacturer that 

11 are due under the agreement before the ef12 fective date of its termination. 

13 ‘‘(iv) NOTICE TO THIRD PARTY.—The 

14 Secretary shall provide notice of such ter15 mination to a third party with a contract 

16 under subsection (d)(3) within not less 

17 than 30 days before the effective date of 

18 such termination. 

19 ‘‘(c) DUTIES DESCRIBED AND SPECIAL RULE FOR

20 SUPPLEMENTAL BENEFITS.— 

21 ‘‘(1) DUTIES DESCRIBED.—The duties de22 scribed in this subsection are the following: 

23 ‘‘(A) ADMINISTRATION OF PROGRAM.—Ad24 ministering the program, including— 


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1 ‘‘(i) the determination of the amount 

2 of the discounted price of an applicable 

3 drug of a manufacturer; 

4 ‘‘(ii) except as provided in clause (iii), 

5 the establishment of procedures under 

6 which discounted prices are provided to ap7 plicable beneficiaries at pharmacies or by 

8 mail order service at the point-of-sale of an 

9 applicable drug; 

10 ‘‘(iii) in the case where, during the pe11 riod beginning on July 1, 2010, and end12 ing on December 31, 2011, it is not prac13 ticable to provide such discounted prices at 

14 the point-of-sale (as described in clause 

15 (ii)), the establishment of procedures to 

16 provide such discounted prices as soon as 

17 practicable after the point-of-sale; 

18 ‘‘(iv) the establishment of procedures 

19 to ensure that, not later than the applica20 ble number of calendar days after the dis21 pensing of an applicable drug by a phar22 macy or mail order service, the pharmacy 

23 or mail order service is reimbursed for an 

24 amount equal to the difference between— 


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1 ‘‘(I) the negotiated price of the 

2 applicable drug; and 

3 ‘‘(II) the discounted price of the 

4 applicable drug; 

5 ‘‘(v) the establishment of procedures 

6 to ensure that the discounted price for an 

7 applicable drug under this section is ap8 plied before any coverage or financial as9 sistance under other health benefit plans 

10 or programs that provide coverage or fi11 nancial assistance for the purchase or pro12 vision of prescription drug coverage on be13 half of applicable beneficiaries as the Sec14 retary may specify; and 

15 ‘‘(vi) the establishment of procedures 

16 to implement the special rule for supple17 mental benefits under paragraph (2). 

18 ‘‘(B) MONITORING COMPLIANCE.— 

19 ‘‘(i) IN GENERAL.—Monitoring com20 pliance by a manufacturer with the terms 

21 of an agreement under this section. 

22 ‘‘(ii) NOTIFICATION.—If a third party 

23 with a contract under subsection (d)(3) de24 termines that the manufacturer is not in 

25 compliance with such agreement, the third 


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1 party shall notify the Secretary of such 

2 noncompliance for appropriate enforcement 

3 under subsection (e). 

4 ‘‘(2) SPECIAL RULE FOR SUPPLEMENTAL BENE5 FITS.—For plan year 2010 and each subsequent 

6 plan year, in the case where an applicable bene7 ficiary has supplemental benefits with respect to ap8 plicable drugs under the prescription drug plan or 

9 MA–PD plan that the applicable beneficiary is en10 rolled in, the applicable beneficiary shall not be pro11 vided a discounted price for an applicable drug 

12 under this section until after such supplemental ben13 efits have been applied with respect to the applicable 

14 drug. 

15 ‘‘(d) ADMINISTRATION.— 

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

17 the Secretary shall provide for the implementation of 

18 this section, including the performance of the duties 

19 described in subsection (c)(1). 

20 ‘‘(2) LIMITATION.— 

21 ‘‘(A) IN GENERAL.—Subject to subpara22 graph (B), in providing for such implementa23 tion, the Secretary shall not receive or dis24 tribute any funds of a manufacturer under the 

25 program. 


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1 ‘‘(B) EXCEPTION.—The limitation under 

2 subparagraph (A) shall not apply to the Sec3 retary with respect to drugs dispensed during 

4 the period beginning on July 1, 2010, and end5 ing on December 31, 2010, but only if the Sec6 retary determines that the exception to such 

7 limitation under this subparagraph is necessary 

8 in order for the Secretary to begin implementa9 tion of this section and provide applicable bene10 ficiaries timely access to discounted prices dur11 ing such period. 

12 ‘‘(3) CONTRACT WITH THIRD PARTIES.—The 

13 Secretary shall enter into a contract with 1 or more 

14 third parties to administer the requirements estab15 lished by the Secretary in order to carry out this 

16 section. At a minimum, the contract with a third 

17 party under the preceding sentence shall require 

18 that the third party— 

19 ‘‘(A) receive and transmit information be20 tween the Secretary, manufacturers, and other 

21 individuals or entities the Secretary determines 

22 appropriate; and 

23 ‘‘(B) receive, distribute, or facilitate the 

24 distribution of funds of manufacturers to ap25 propriate individuals or entities in order to 


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1 meet the obligations of manufacturers under 

2 agreements under this section. 

3 ‘‘(4) PERFORMANCE REQUIREMENTS.—The 

4 Secretary shall establish performance requirements 

5 for a third party with a contract under paragraph 

6 (3). 

7 ‘‘(5) IMPLEMENTATION.—The Secretary may 

8 implement the program under this section by pro9 gram instruction or otherwise. 

10 ‘‘(6) ADMINISTRATION.—Chapter 35 of title 44, 

11 United States Code, shall not apply to the program 

12 under this section. 

13 ‘‘(e) ENFORCEMENT.— 

14 ‘‘(1) AUDITS.—Each manufacturer with an 

15 agreement in effect under this section shall be sub16 ject to periodic audit by the Secretary. 

17 ‘‘(2) CIVIL MONEY PENALTY.— 

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

19 impose a civil money penalty on a manufacturer 

20 that fails to provide applicable beneficiaries dis21 counts for applicable drugs of the manufacturer 

22 in accordance with such agreement for each 

23 such failure in an amount the Secretary deter24 mines is commensurate with the sum of— 


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1 ‘‘(i) the amount that the manufac2 turer would have paid with respect to such 

3 discounts under the agreement; and 

4 ‘‘(ii) 25 percent of such amount. 

5 ‘‘(B) APPLICATION.—The provisions of 

6 section 1128A (other than subsections (a) and 

7 (b)) shall apply to a civil money penalty under 

8 this paragraph in the same manner as such 

9 provisions apply to a penalty or proceeding 

10 under section 1128A(a). 

11 ‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF

12 OTHER COVERED PART D DRUGS.—Nothing in this sec13 tion shall prevent an applicable beneficiary from pur14 chasing a covered part D drug that is not an applicable 

15 drug (including a generic drug or a drug that is not on 

16 the formulary of the prescription drug plan or MA–PD 

17 plan that the applicable beneficiary is enrolled in). 

18 ‘‘(g) DEFINITIONS.—In this section: 

19 ‘‘(1) APPLICABLE BENEFICIARY.—The term 

20 ‘applicable beneficiary’ means an individual who— 

21 ‘‘(A) is enrolled in a prescription drug plan 

22 or an MA–PD plan; 

23 ‘‘(B) is not enrolled in a qualified retiree 

24 prescription drug plan; 


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1 ‘‘(C) is not entitled to an income-related 

2 subsidy under section 1860D–14(a); 

3 ‘‘(D) is not subject to a reduction in pre4 mium subsidy under section 1839(i) or an in5 crease in the base beneficiary premium under 

6 section 1860D–13(a)(7); and 

7 ‘‘(E) who— 

8 ‘‘(i) has reached or exceeded the ini9 tial coverage limit under section 1860D– 

10 2(b)(3) during the year; and 

11 ‘‘(ii) has not incurred costs for cov12 ered part D drugs in the year equal to the 

13 annual out-of-pocket threshold specified in 

14 section 1860D–2(b)(4)(B). 

15 ‘‘(2) APPLICABLE DRUG.—The term ‘applicable 

16 drug’ means, with respect to an applicable bene17 ficiary, a covered part D drug— 

18 ‘‘(A) approved under a new drug applica19 tion under section 505(b) of the Federal Food, 

20 Drug, and Cosmetic Act; and 

21 ‘‘(B)(i) if the PDP sponsor of the prescrip22 tion drug plan or the MA organization offering 

23 the MA–PD plan uses a formulary, which is on 

24 the formulary of the prescription drug plan or 


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1 MA–PD plan that the applicable beneficiary is 

2 enrolled in; 

3 ‘‘(ii) if the PDP sponsor of the prescrip4 tion drug plan or the MA organization offering 

5 the MA–PD plan does not use a formulary, for 

6 which benefits are available under the prescrip7 tion drug plan or MA–PD plan that the appli8 cable beneficiary is enrolled in; or 

9 ‘‘(iii) is provided through an exception or 

10 appeal. 

11 ‘‘(3) APPLICABLE NUMBER OF CALENDAR

12 DAYS.—The term ‘applicable number of calendar 

13 days’ means— 

14 ‘‘(A) with respect to claims for reimburse15 ment submitted electronically, 14 days; and 

16 ‘‘(B) with respect to claims for reimburse17 ment submitted otherwise, 30 days. 

18 ‘‘(4) DISCOUNTED PRICE.— 

19 ‘‘(A) IN GENERAL.—The term ‘discounted 

20 price’ means 50 percent of the negotiated price 

21 of the applicable drug of a manufacturer. 

22 ‘‘(B) CLARIFICATION.—Nothing in this 

23 section shall be construed as affecting the re24 sponsibility of an applicable beneficiary for pay25 ment of a dispensing fee for an applicable drug. 


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1 ‘‘(5) MANUFACTURER.—The term ‘manufac2 turer’ means any entity which is engaged in the pro3 duction, preparation, propagation, compounding, 

4 conversion, or processing of prescription drug prod5 ucts, either directly or indirectly by extraction from 

6 substances of natural origin, or independently by 

7 means of chemical synthesis, or by a combination of 

8 extraction and chemical synthesis. Such term does 

9 not include a wholesale distributor of drugs or a re10 tail pharmacy licensed under State law. 

11 ‘‘(6) NEGOTIATED PRICE.—The term ‘nego12 tiated price’ has the meaning given such term in sec13 tion 423.100 of title 42, Code of Federal Regula14 tions (as in effect on the date of enactment of this 

15 section), except that such negotiated price shall not 

16 include any dispensing fee for the applicable drug. 

17 ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG

18 PLAN.—The term ‘qualified retiree prescription drug 

19 plan’ has the meaning given such term in section 

20 1860D–22(a)(2).’’. 

21 (c) INCLUSION IN INCURRED COSTS.— 

22 (1) IN GENERAL.—Section 1860D–2(b)(4) of 

23 the Social Security Act (42 U.S.C. 1395w– 

24 102(b)(4)) is amended— 


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1 (A) in subparagraph (C), in the matter 

2 preceding clause (i), by striking ‘‘In applying’’ 

3 and inserting ‘‘Except as provided in subpara4 graph (E), in applying’’; and 

5 (B) by adding at the end the following new 

6 subparagraph: 

7 ‘‘(E) INCLUSION OF COSTS OF APPLICABLE

8 DRUGS UNDER MEDICARE PRESCRIPTION DRUG

9 DISCOUNT PROGRAM.—In applying subpara10 graph (A), incurred costs shall include the ne11 gotiated price (as defined in paragraph (6) of 

12 section 1860D–14A(g)) of an applicable drug 

13 (as defined in paragraph (2) of such section) of 

14 a manufacturer) that is furnished to an applica15 ble beneficiary (as defined in paragraph (1) of 

16 such section) under the Medicare prescription 

17 drug discount program under section 1860D– 

18 14A, regardless of whether part of such costs 

19 were paid by a manufacturer under such pro20 gram.’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by this section shall apply to costs incurred on or 

23 after July 1, 2010. 

24 (d) CONFORMING AMENDMENT PERMITTING PRE25 SCRIPTION DRUG DISCOUNTS.— 


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1 (1) IN GENERAL.—Section 1128B(b)(3) of the 

2 Social Security Act (42 U.S.C. 1320a–7b(b)(3)) is 

3 amended— 

4 (A) by striking ‘‘and’’ at the end of sub5 paragraph (G); 

6 (B) by striking ‘‘1853(a)(4).’’ at the end of 

7 the first subparagraph (H) and inserting 

8 ‘‘1853(a)(4);’’; 

9 (C) by redesignating the second subpara10 graph (H) as subparagraph (I) and by striking 

11 the period at the end and inserting ‘‘; and’’; 

12 and 

13 (D) by adding at the end the following new 

14 subparagraph: 

15 ‘‘(J) a discount in the price of an applica16 ble drug (as defined in paragraph (2) of section 

17 1860D–14A(g)) of a manufacturer) that is fur18 nished to an applicable beneficiary (as defined 

19 in paragraph (1) of such section) under the 

20 Medicare prescription drug discount program 

21 under section 1860D–14A.’’. 

22 (2) EFFECTIVE DATE.—The amendments made 

23 by this section shall apply to drugs dispensed on or 

24 after July 1, 2010. 


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1 SEC. 3302. IMPROVEMENT IN DETERMINATION OF MEDI2 CARE PART D LOW-INCOME BENCHMARK 

3 PREMIUM. 

4 (a) IN GENERAL.—Section 1860D–14(b)(2)(B)(iii) 

5 of the Social Security Act (42 U.S.C. 1395w– 

6 114(b)(2)(B)(iii)) is amended by inserting ‘‘, determined 

7 without regard to any reduction in such premium as a re8 sult of any beneficiary rebate under section 1854(b)(1)(C) 

9 or bonus payment under section 1853(n)’’ before the pe10 riod at the end. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 subsection (a) shall apply to premiums for months begin13 ning on or after January 1, 2011. 

14 SEC. 3303. VOLUNTARY DE MINIMUS POLICY FOR SUBSIDY 

15 ELIGIBLE INDIVIDUALS UNDER PRESCRIP16 TION DRUG PLANS AND MA–PD PLANS. 

17 (a) IN GENERAL.—Section 1860D–14(a) of the So18 cial Security Act (42 U.S.C. 1395w–114(a)) is amended 

19 by adding at the end the following new paragraph: 

20 ‘‘(5) WAIVER OF DE MINIMUS PREMIUMS.—The 

21 Secretary shall, under procedures established by the 

22 Secretary, permit a prescription drug plan or an 

23 MA–PD plan to waive the monthly beneficiary pre24 mium for a subsidy eligible individual if the amount 

25 of such premium is de minimus. If such premium is 

26 waived under the plan, the Secretary shall not reasVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01030 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 sign subsidy eligible individuals enrolled in the plan 

2 to other plans based on the fact that the monthly 

3 beneficiary premium under the plan was greater 

4 than the low-income benchmark premium amount.’’. 

5 (b) AUTHORIZING THE SECRETARY TO AUTO-EN6 ROLL SUBSIDY ELIGIBLE INDIVIDUALS IN PLANS THAT

7 WAIVE DE MINIMUS PREMIUMS.—Section 1860D–1(b)(1) 

8 of the Social Security Act (42 U.S.C. 1395w–101(b)(1)) 

9 is amended— 

10 (1) in subparagraph (C), by inserting ‘‘except 

11 as provided in subparagraph (D),’’ after ‘‘shall in12 clude,’’ 

13 (2) by adding at the end the following new sub14 paragraph: 

15 ‘‘(D) SPECIAL RULE FOR PLANS THAT

16 WAIVE DE MINIMUS PREMIUMS.—The process 

17 established under subparagraph (A) may in18 clude, in the case of a part D eligible individual 

19 who is a subsidy eligible individual (as defined 

20 in section 1860D–14(a)(3)) who has failed to 

21 enroll in a prescription drug plan or an MA–PD 

22 plan, for the enrollment in a prescription drug 

23 plan or MA–PD plan that has waived the 

24 monthly beneficiary premium for such subsidy 

25 eligible individual under section 1860D– 


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1 14(a)(5). If there is more than one such plan 

2 available, the Secretary shall enroll such an in3 dividual under the preceding sentence on a ran4 dom basis among all such plans in the PDP re5 gion. Nothing in the previous sentence shall 

6 prevent such an individual from declining or 

7 changing such enrollment.’’. 

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

9 this subsection shall apply to premiums for months, and 

10 enrollments for plan years, beginning on or after January 

11 1, 2011. 

12 SEC. 3304. SPECIAL RULE FOR WIDOWS AND WIDOWERS RE13 GARDING ELIGIBILITY FOR LOW-INCOME AS14 SISTANCE. 

15 (a) IN GENERAL.—Section 1860D–14(a)(3)(B) of 

16 the Social Security Act (42 U.S.C. 1395w–114(a)(3)(B)) 

17 is amended by adding at the end the following new clause: 

18 ‘‘(vi) SPECIAL RULE FOR WIDOWS

19 AND WIDOWERS.—Notwithstanding the 

20 preceding provisions of this subparagraph, 

21 in the case of an individual whose spouse 

22 dies during the effective period for a deter23 mination or redetermination that has been 

24 made under this subparagraph, such effec25 tive period shall be extended through the 


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1 date that is 1 year after the date on which 

2 the determination or redetermination 

3 would (but for the application of this 

4 clause) otherwise cease to be effective.’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 subsection (a) shall take effect on January 1, 2011. 

7 SEC. 3305. IMPROVED INFORMATION FOR SUBSIDY ELIGI8 BLE INDIVIDUALS REASSIGNED TO PRE9 SCRIPTION DRUG PLANS AND MA–PD PLANS. 

10 Section 1860D–14 of the Social Security Act (42 

11 U.S.C. 1395w–114) is amended— 

12 (1) by redesignating subsection (d) as sub13 section (e); and 

14 (2) by inserting after subsection (c) the fol15 lowing new subsection: 

16 ‘‘(d) FACILITATION OF REASSIGNMENTS.—Beginning 

17 not later than January 1, 2011, the Secretary shall, in 

18 the case of a subsidy eligible individual who is enrolled 

19 in one prescription drug plan and is subsequently reas20 signed by the Secretary to a new prescription drug plan, 

21 provide the individual, within 30 days of such reassign22 ment, with— 

23 ‘‘(1) information on formulary differences be24 tween the individual’s former plan and the plan to 


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1 which the individual is reassigned with respect to the 

2 individual’s drug regimens; and 

3 ‘‘(2) a description of the individual’s right to 

4 request a coverage determination, exception, or re5 consideration under section 1860D–4(g), bring an 

6 appeal under section 1860D–4(h), or resolve a griev7 ance under section 1860D–4(f).’’. 

8 SEC. 3306. FUNDING OUTREACH AND ASSISTANCE FOR 

9 LOW-INCOME PROGRAMS. 

10 (a) ADDITIONAL FUNDING FOR STATE HEALTH IN11 SURANCE PROGRAMS.—Subsection (a)(1)(B) of section 

12 119 of the Medicare Improvements for Patients and Pro13 viders Act of 2008 (42 U.S.C. 1395b–3 note) is amended 

14 by striking ‘‘(42 U.S.C. 1395w–23(f))’’ and all that fol15 lows through the period at the end and inserting ‘‘(42 

16 U.S.C. 1395w–23(f)), to the Centers for Medicare & Med17 icaid Services Program Management Account— 

18 ‘‘(i) for fiscal year 2009, of 

19 $7,500,000; and 

20 ‘‘(ii) for the period of fiscal years 

21 2010 through 2012, of $15,000,000. 

22 Amounts appropriated under this subparagraph 

23 shall remain available until expended.’’. 

24 (b) ADDITIONAL FUNDING FOR AREA AGENCIES ON

25 AGING.—Subsection (b)(1)(B) of such section 119 is 


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1 amended by striking ‘‘(42 U.S.C. 1395w–23(f))’’ and all 

2 that follows through the period at the end and inserting 

3 ‘‘(42 U.S.C. 1395w–23(f)), to the Administration on 

4 Aging— 

5 ‘‘(i) for fiscal year 2009, of 

6 $7,500,000; and 

7 ‘‘(ii) for the period of fiscal years 

8 2010 through 2012, of $15,000,000. 

9 Amounts appropriated under this subparagraph 

10 shall remain available until expended.’’. 

11 (c) ADDITIONAL FUNDING FOR AGING AND DIS12 ABILITY RESOURCE CENTERS.—Subsection (c)(1)(B) of 

13 such section 119 is amended by striking ‘‘(42 U.S.C. 

14 1395w–23(f))’’ and all that follows through the period at 

15 the end and inserting ‘‘(42 U.S.C. 1395w–23(f)), to the 

16 Administration on Aging— 

17 ‘‘(i) for fiscal year 2009, of 

18 $5,000,000; and 

19 ‘‘(ii) for the period of fiscal years 

20 2010 through 2012, of $10,000,000. 

21 Amounts appropriated under this subparagraph 

22 shall remain available until expended.’’. 

23 (d) ADDITIONAL FUNDING FOR CONTRACT WITH

24 THE NATIONAL CENTER FOR BENEFITS AND OUTREACH

25 ENROLLMENT.—Subsection (d)(2) of such section 119 is 


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1 amended by striking ‘‘(42 U.S.C. 1395w–23(f))’’ and all 

2 that follows through the period at the end and inserting 

3 ‘‘(42 U.S.C. 1395w–23(f)), to the Administration on 

4 Aging— 

5 ‘‘(i) for fiscal year 2009, of 

6 $5,000,000; and 

7 ‘‘(ii) for the period of fiscal years 

8 2010 through 2012, of $5,000,000. 

9 Amounts appropriated under this subparagraph 

10 shall remain available until expended.’’. 

11 (e) SECRETARIAL AUTHORITY TO ENLIST SUPPORT

12 IN CONDUCTING CERTAIN OUTREACH ACTIVITIES.—Such 

13 section 119 is amended by adding at the end the following 

14 new subsection: 

15 ‘‘(g) SECRETARIAL AUTHORITY TO ENLIST SUPPORT

16 IN CONDUCTING CERTAIN OUTREACH ACTIVITIES.—The 

17 Secretary may request that an entity awarded a grant 

18 under this section support the conduct of outreach activi19 ties aimed at preventing disease and promoting wellness. 

20 Notwithstanding any other provision of this section, an en21 tity may use a grant awarded under this subsection to sup22 port the conduct of activities described in the preceding 

23 sentence.’’. 


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1 SEC. 3307. IMPROVING FORMULARY REQUIREMENTS FOR 

2 PRESCRIPTION DRUG PLANS AND MA–PD 

3 PLANS WITH RESPECT TO CERTAIN CAT4 EGORIES OR CLASSES OF DRUGS. 

5 (a) IMPROVING FORMULARY REQUIREMENTS.—Sec6 tion 1860D–4(b)(3)(G) of the Social Security Act is 

7 amended to read as follows: 

8 ‘‘(G) REQUIRED INCLUSION OF DRUGS IN

9 CERTAIN CATEGORIES AND CLASSES.— 

10 ‘‘(i) FORMULARY REQUIREMENTS.— 

11 ‘‘(I) IN GENERAL.—Subject to 

12 subclause (II), a PDP sponsor offer13 ing a prescription drug plan shall be 

14 required to include all covered part D 

15 drugs in the categories and classes 

16 identified by the Secretary under 

17 clause (ii)(I) 

18 ‘‘(II) EXCEPTIONS.—The Sec19 retary may establish exceptions that 

20 permit a PDP sponsor offering a pre21 scription drug plan to exclude from its 

22 formulary a particular covered part D 

23 drug in a category or class that is 

24 otherwise required to be included in 

25 the formulary under subclause (I) (or 

26 to otherwise limit access to such a 


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1 drug, including through prior author2 ization or utilization management). 

3 ‘‘(ii) IDENTIFICATION OF DRUGS IN

4 CERTAIN CATEGORIES AND CLASSES.— 

5 ‘‘(I) IN GENERAL.—Subject to 

6 clause (iv), the Secretary shall iden7 tify, as appropriate, categories and 

8 classes of drugs for which the Sec9 retary determines are of clinical con10 cern. 

11 ‘‘(II) CRITERIA.—The Secretary 

12 shall use criteria established by the 

13 Secretary in making any determina14 tion under subclause (I). 

15 ‘‘(iii) IMPLEMENTATION.—The Sec16 retary shall establish the criteria under 

17 clause (ii)(II) and any exceptions under 

18 clause (i)(II) through the promulgation of 

19 a regulation which includes a public notice 

20 and comment period. 

21 ‘‘(iv) REQUIREMENT FOR CERTAIN

22 CATEGORIES AND CLASSES UNTIL CRI23 TERIA ESTABLISHED.—Until such time as 

24 the Secretary establishes the criteria under 

25 clause (ii)(II) the following categories and 


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1 classes of drugs shall be identified under 

2 clause (ii)(I): 

3 ‘‘(I) Anticonvulsants. 

4 ‘‘(II) Antidepressants. 

5 ‘‘(III) Antineoplastics. 

6 ‘‘(IV) Antipsychotics. 

7 ‘‘(V) Antiretrovirals. 

8 ‘‘(VI) Immunosuppressants for 

9 the treatment of transplant rejec10 tion.’’. 

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

12 this section shall apply to plan year 2011 and subsequent 

13 plan years. 

14 SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR 

15 HIGH-INCOME BENEFICIARIES. 

16 (a) INCOME-RELATED INCREASE IN PART D PRE17 MIUM.— 

18 (1) IN GENERAL.—Section 1860D–13(a) of the 

19 Social Security Act (42 U.S.C. 1395w–113(a)) is 

20 amended by adding at the end the following new 

21 paragraph: 

22 ‘‘(7) INCREASE IN BASE BENEFICIARY PREMIUM

23 BASED ON INCOME.— 

24 ‘‘(A) IN GENERAL.—In the case of an indi25 vidual whose modified adjusted gross income 


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1 exceeds the threshold amount applicable under 

2 paragraph (2) of section 1839(i) (including ap3 plication of paragraph (5) of such section) for 

4 the calendar year, the monthly amount of the 

5 beneficiary premium applicable under this sec6 tion for a month after December 2010 shall be 

7 increased by the monthly adjustment amount 

8 specified in subparagraph (B). 

9 ‘‘(B) MONTHLY ADJUSTMENT AMOUNT.— 

10 The monthly adjustment amount specified in 

11 this subparagraph for an individual for a month 

12 in a year is equal to the product of— 

13 ‘‘(i) the quotient obtained by divid14 ing— 

15 ‘‘(I) the applicable percentage de16 termined under paragraph (3)(C) of 

17 section 1839(i) (including application 

18 of paragraph (5) of such section) for 

19 the individual for the calendar year 

20 reduced by 25.5 percent; by 

21 ‘‘(II) 25.5 percent; and 

22 ‘‘(ii) the base beneficiary premium (as 

23 computed under paragraph (2)). 

24 ‘‘(C) MODIFIED ADJUSTED GROSS IN25 COME.—For purposes of this paragraph, the 


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1 term ‘modified adjusted gross income’ has the 

2 meaning given such term in subparagraph (A) 

3 of section 1839(i)(4), determined for the tax4 able year applicable under subparagraphs (B) 

5 and (C) of such section. 

6 ‘‘(D) DETERMINATION BY COMMISSIONER

7 OF SOCIAL SECURITY.—The Commissioner of 

8 Social Security shall make any determination 

9 necessary to carry out the income-related in10 crease in the base beneficiary premium under 

11 this paragraph. 

12 ‘‘(E) PROCEDURES TO ASSURE CORRECT

13 INCOME-RELATED INCREASE IN BASE BENE14 FICIARY PREMIUM.— 

15 ‘‘(i) DISCLOSURE OF BASE BENE16 FICIARY PREMIUM.—Not later than Sep17 tember 15 of each year beginning with 

18 2010, the Secretary shall disclose to the 

19 Commissioner of Social Security the 

20 amount of the base beneficiary premium 

21 (as computed under paragraph (2)) for the 

22 purpose of carrying out the income-related 

23 increase in the base beneficiary premium 

24 under this paragraph with respect to the 

25 following year. 


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1 ‘‘(ii) ADDITIONAL DISCLOSURE.—Not 

2 later than October 15 of each year begin3 ning with 2010, the Secretary shall dis4 close to the Commissioner of Social Secu5 rity the following information for the pur6 pose of carrying out the income-related in7 crease in the base beneficiary premium 

8 under this paragraph with respect to the 

9 following year: 

10 ‘‘(I) The modified adjusted gross 

11 income threshold applicable under 

12 paragraph (2) of section 1839(i) (in13 cluding application of paragraph (5) 

14 of such section). 

15 ‘‘(II) The applicable percentage 

16 determined under paragraph (3)(C) of 

17 section 1839(i) (including application 

18 of paragraph (5) of such section). 

19 ‘‘(III) The monthly adjustment 

20 amount specified in subparagraph 

21 (B). 

22 ‘‘(IV) Any other information the 

23 Commissioner of Social Security de24 termines necessary to carry out the 

25 income-related increase in the base 


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1 beneficiary premium under this para2 graph. 

3 ‘‘(F) RULE OF CONSTRUCTION.—The for4 mula used to determine the monthly adjustment 

5 amount specified under subparagraph (B) shall 

6 only be used for the purpose of determining 

7 such monthly adjustment amount under such 

8 subparagraph.’’. 

9 (2) COLLECTION OF MONTHLY ADJUSTMENT

10 AMOUNT.—Section 1860D–13(c) of the Social Secu11 rity Act (42 U.S.C. 1395w–113(c)) is amended— 

12 (A) in paragraph (1), by striking ‘‘(2) and 

13 (3)’’ and inserting ‘‘(2), (3), and (4)’’; and 

14 (B) by adding at the end the following new 

15 paragraph: 

16 ‘‘(4) COLLECTION OF MONTHLY ADJUSTMENT

17 AMOUNT.— 

18 ‘‘(A) IN GENERAL.—Notwithstanding any 

19 provision of this subsection or section 

20 1854(d)(2), subject to subparagraph (B), the 

21 amount of the income-related increase in the 

22 base beneficiary premium for an individual for 

23 a month (as determined under subsection 

24 (a)(7)) shall be paid through withholding from 


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1 benefit payments in the manner provided under 

2 section 1840. 

3 ‘‘(B) AGREEMENTS.—In the case where 

4 the monthly benefit payments of an individual 

5 that are withheld under subparagraph (A) are 

6 insufficient to pay the amount described in such 

7 subparagraph, the Commissioner of Social Se8 curity shall enter into agreements with the Sec9 retary, the Director of the Office of Personnel 

10 Management, and the Railroad Retirement 

11 Board as necessary in order to allow other 

12 agencies to collect the amount described in sub13 paragraph (A) that was not withheld under 

14 such subparagraph.’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) MEDICARE.—Section 1860D–13(a)(1) of 

17 the Social Security Act (42 U.S.C. 1395w– 

18 113(a)(1)) is amended— 

19 (A) by redesignating subparagraph (F) as 

20 subparagraph (G); 

21 (B) in subparagraph (G), as redesignated 

22 by subparagraph (A), by striking ‘‘(D) and 

23 (E)’’ and inserting ‘‘(D), (E), and (F)’’; and 

24 (C) by inserting after subparagraph (E) 

25 the following new subparagraph: 


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1 ‘‘(F) INCREASE BASED ON INCOME.—The 

2 monthly beneficiary premium shall be increased 

3 pursuant to paragraph (7).’’. 

4 (2) INTERNAL REVENUE CODE.—Section 

5 6103(l)(20) of the Internal Revenue Code of 1986 

6 (relating to disclosure of return information to carry 

7 out Medicare part B premium subsidy adjustment) 

8 is amended— 

9 (A) in the heading, by inserting ‘‘AND

10 PART D BASE BENEFICIARY PREMIUM IN11 CREASE’’ and inserting ‘‘PART B PREMIUM SUB12 SIDY ADJUSTMENT’’; 

13 (B) in subparagraph (A)— 

14 (i) in the matter preceding clause (i), 

15 by inserting ‘‘or increase under section 

16 1860D–13(a)(7)’’ after ‘‘1839(i)’’; and 

17 (ii) in clause (vii), by inserting after 

18 ‘‘subsection (i) of such section’’ the fol19 lowing: ‘‘or increase under section 1860D– 

20 13(a)(7) of such Act’’; and 

21 (C) in subparagraph (B)— 

22 (i) by striking ‘‘Return information’’ 

23 and inserting the following: 

24 ‘‘(i) IN GENERAL.—Return informa25 tion’’; 


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1 (ii) by inserting ‘‘or increase under 

2 such section 1860D–13(a)(7)’’ before the 

3 period at the end; 

4 (iii) as amended by clause (i), by in5 serting ‘‘or for the purpose of resolving 

6 taxpayer appeals with respect to any such 

7 premium adjustment or increase’’ before 

8 the period at the end; and 

9 (iv) by adding at the end the following 

10 new clause: 

11 ‘‘(ii) DISCLOSURE TO OTHER AGEN12 CIES.—Officers, employees, and contrac13 tors of the Social Security Administration 

14 may disclose— 

15 ‘‘(I) the taxpayer identity infor16 mation and the amount of the pre17 mium subsidy adjustment or premium 

18 increase with respect to a taxpayer de19 scribed in subparagraph (A) to offi20 cers, employees, and contractors of 

21 the Centers for Medicare and Med22 icaid Services, to the extent that such 

23 disclosure is necessary for the collec24 tion of the premium subsidy amount 

25 or the increased premium amount, 


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1 ‘‘(II) the taxpayer identity infor2 mation and the amount of the pre3 mium subsidy adjustment or the in4 creased premium amount with respect 

5 to a taxpayer described in subpara6 graph (A) to officers and employees of 

7 the Office of Personnel Management 

8 and the Railroad Retirement Board, 

9 to the extent that such disclosure is 

10 necessary for the collection of the pre11 mium subsidy amount or the in12 creased premium amount, 

13 ‘‘(III) return information with re14 spect to a taxpayer described in sub15 paragraph (A) to officers and employ16 ees of the Department of Health and 

17 Human Services to the extent nec18 essary to resolve administrative ap19 peals of such premium subsidy adjust20 ment or increased premium, and 

21 ‘‘(IV) return information with re22 spect to a taxpayer described in sub23 paragraph (A) to officers and employ24 ees of the Department of Justice for 

25 use in judicial proceedings to the exVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01047 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tent necessary to carry out the pur2 poses described in clause (i).’’. 

3 SEC. 3309. SIMPLIFICATION OF PLAN INFORMATION. 

4 (a) PRESCRIPTION DRUG PLANS.—Section 1860D– 

5 1(c) of the Social Security Act (42 U.S.C. 1395w–101(c)) 

6 is amended by adding at the end the following new para7 graph: 

8 ‘‘(5) CATEGORIZATION OF PLANS.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall 

10 do the following: 

11 ‘‘(i) Establish 2 or more categories of 

12 prescription drug plans offered by PDP 

13 sponsors and MA–PD plans offered by 

14 Medicare Advantage organizations based 

15 on the actuarial value or range of values of 

16 the prescription drug benefits, including 

17 supplemental prescription drug coverage, 

18 provided under the plans as of the date of 

19 enactment of this subsection. 

20 ‘‘(ii) Develop standardized nomen21 clature, definitions, and language to de22 scribe the prescription drug benefits pro23 vided under the plans in each such cat24 egory. 


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1 ‘‘(iii) Ensure that the Medicare Pre2 scription Drug Plan Finder on the Internet 

3 website of the Department of Health and 

4 Human Services includes the plan name 

5 under subparagraph (B). 

6 ‘‘(iv) In establishing categories of pre7 scription drug plans and MA–PD plans 

8 under clause (i), the Secretary shall ensure 

9 that there is a meaningful difference be10 tween the actuarial value of prescription 

11 drug benefits provided under the plans in 

12 different categories. 

13 ‘‘(B) REQUIRED INCLUSION OF CATEGORY

14 IN PLAN NAME AND MARKETING MATERIALS.— 

15 For plan years beginning on or after January 

16 1, 2011, a PDP sponsor shall ensure that the 

17 name of each prescription drug plan offered by 

18 the PDP sponsor and any marketing materials 

19 with respect to such plan include the category 

20 of the plan, as determined under subparagraph 

21 (A) (using standardized nomenclature, defini22 tions, and language developed by the Secretary 

23 under such subparagraph).’’. 


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1 (b) MA–PD PLANS.—Section 1856(f)(3) of the So2 cial Security Act (42 U.S.C. 1395w–26(f)(3)) is amended 

3 by adding at the end the following new subparagraph: 

4 ‘‘(D) REQUIRED INCLUSION OF CATEGORY

5 IN PLAN NAME AND MARKETING MATERIALS.— 

6 Section 1860D–1(c)(5)(B).’’. 

7 SEC. 3310. LIMITATION ON REMOVAL OR CHANGE OF COV8 ERAGE OF COVERED PART D DRUGS UNDER 

9 A FORMULARY UNDER A PRESCRIPTION 

10 DRUG PLAN OR AN MA–PD PLAN. 

11 (a) LIMITATION ON REMOVAL OR CHANGE.—Section 

12 1860D–4(b)(3)(E) of the Social Security Act (42 U.S.C. 

13 1395w–104(b)(3)(E)) is amended to read as follows: 

14 ‘‘(E) REMOVING OR CHANGING A DRUG ON

15 A FORMULARY.— 

16 ‘‘(i) LIMITATION.—Subject to clause 

17 (ii), with respect to plan years beginning 

18 on or after January 1, 2011, the PDP 

19 sponsor of a prescription drug plan may 

20 not remove a covered part D drug from the 

21 plan formulary, apply a cost or utilization 

22 management tool that imposes a restriction 

23 or limitation on the coverage of such a 

24 drug (such as through the application of a 

25 preferred status, usage restriction, step 


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1 therapy, prior authorization, or quantity 

2 limitation), or increase the cost-sharing of 

3 such a drug (such as through placement of 

4 a drug on a tier that would result in high5 er cost-sharing for a beneficiary) other 

6 than on a date specified by the Secretary 

7 (but not later than the date on which PDP 

8 sponsors begin marketing their plans with 

9 respect to the immediately succeeding plan 

10 year). 

11 ‘‘(ii) EXCEPTIONS TO LIMITATION ON

12 REMOVAL.—Subject to clause (iii), clause 

13 (i) shall not apply with respect to a cov14 ered part D drug that— 

15 ‘‘(I) is a brand name drug for 

16 which there is a generic drug ap17 proved under section 505(j) of the 

18 Food and Drug Cosmetic Act that is 

19 placed on the market during the pe20 riod in which there are limitations on 

21 removal or change in the formulary 

22 under clause (i); 

23 ‘‘(II) is a drug for which the 

24 Commissioner of Food and Drugs 

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1 pose a restriction on the drug or re2 quire a drug label warning during the 

3 plan year; 

4 ‘‘(III) is a drug that the Phar5 macy and Therapeutic Committee of 

6 the plan determines, based directly on 

7 evidence from peer-reviewed research, 

8 has a lower safety profile than is ap9 propriate or is ineffective; or 

10 ‘‘(IV) for which the Secretary es11 tablishes a specific exception through 

12 the promulgation of regulations relat13 ing to plan formularies. 

14 ‘‘(iii) LIMITED APPLICATION OF EX15 CEPTIONS TO DRUGS IN CERTAIN CAT16 EGORIES AND CLASSES.—Subclauses (I), 

17 (III), and (IV) of clause (ii) shall not apply 

18 to a drug in a category or class identified 

19 under subparagraph (G)(i). 

20 ‘‘(iv) NOTICE OF REMOVAL UNDER

21 APPLICATION OF EXCEPTION TO LIMITA22 TION.—The PDP sponsor of a prescription 

23 drug plan shall provide appropriate notice 

24 (such as under subsection (a)(3) and in25 cluding the annual notice under subsection 


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1 (a)(5)) of any removal or change under 

2 clause (ii) to the Secretary, affected enroll3 ees, physicians, pharmacies, and phar4 macists.’’. 

5 (b) NOTICE FOR CHANGE IN FORMULARY AND

6 OTHER RESTRICTIONS OR LIMITATIONS ON COVERAGE.— 

7 (1) IN GENERAL.—Section 1860D–4(a) of the 

8 Social Security Act (42 U.S.C. 1395w–104(a)) is 

9 amended by adding at the end the following new 

10 paragraph: 

11 ‘‘(5) ANNUAL NOTICE OF CHANGES IN FOR12 MULARY AND OTHER RESTRICTIONS OR LIMITATIONS

13 ON COVERAGE.—Each PDP sponsor of a prescrip14 tion drug plan shall furnish to each enrollee at the 

15 time of each annual coordinated election period (re16 ferred to in section 1860D–1(b)(1)(B)(iii)) for a 

17 plan year a notice of any changes in the formulary 

18 or other restrictions or limitations on coverage of 

19 any covered part D drug under the plan that will 

20 take effect for the plan year.’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by paragraph (1) shall apply to annual coordinated 

23 election periods beginning on or after January 1, 

24 2010. 


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1 SEC. 3311. ELIMINATION OF COST SHARING FOR CERTAIN 

2 DUAL ELIGIBLE INDIVIDUALS. 

3 Section 1860D–14(a)(1)(D)(i) of the Social Security 

4 Act (42 U.S.C. 1395w–114(a)(1)(D)(i)) is amended by in5 serting ‘‘or, effective on a date specified by the Secretary 

6 (but in no case earlier than January 1, 2012), who would 

7 be such an institutionalized individual or couple, if the 

8 full-benefit dual eligible individual were not receiving serv9 ices under a home and community-based waiver authorized 

10 for a State under section 1115 or subsection (c) or (d) 

11 of section 1915 or under a State plan amendment under 

12 subsection (i) of such section or services provided through 

13 enrollment in a medicaid managed care organization’’ 

14 after ‘‘1902(q)(1)(B))’’. 

15 SEC. 3312. REDUCING WASTEFUL DISPENSING OF OUT16 PATIENT PRESCRIPTION DRUGS IN LONG17 TERM CARE FACILITIES UNDER PRESCRIP18 TION DRUG PLANS AND MA–PD PLANS. 

19 (a) IN GENERAL.—Section 1860D–4(c) of the Social 

20 Security Act (42 U.S.C. 1395w–104(c)) is amended by 

21 adding at the end the following new paragraph: 

22 ‘‘(3) REDUCING WASTEFUL DISPENSING OF

23 OUTPATIENT PRESCRIPTION DRUGS IN LONG-TERM

24 CARE FACILITIES.—The Secretary shall require PDP 

25 sponsors of prescription drug plans to utilize specific 

26 drug dispensing techniques, as determined by the 


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1 Secretary, such as weekly, daily, or automated dose 

2 dispensing, when dispensing medications to enrollees 

3 who reside in a long-term care facility in order to re4 duce waste associated with 30-day fills.’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 subsection (a) shall apply to plan years beginning on or 

7 after January 1, 2012. 

8 SEC. 3313. IMPROVED MEDICARE PRESCRIPTION DRUG 

9 PLAN AND MA–PD PLAN COMPLAINT SYSTEM. 

10 (a) PLAN COMPLAINT SYSTEM.— 

11 (1) IN GENERAL.—The Secretary shall develop 

12 and maintain a compliant system to collect and 

13 maintain information on MA–PD plan and prescrip14 tion drug plan complaints that are received (includ15 ing by telephone, letter, e-mail, or any other means) 

16 by the Secretary (including by a regional office of 

17 the Department of Health and Human Services, the 

18 Medicare Beneficiary Ombudsman, a sub-contractor, 

19 a carrier, a fiscal intermediary, and a Medicare ad20 ministrative contractor under section 1874A of the 

21 Social Security Act (42 U.S.C. 1395kk)) through 

22 the date on which the compliant is resolved. 

23 (2) MODEL ELECTRONIC COMPLAINT FORM.— 

24 The Secretary shall develop a model electronic com25 plaint form to be used for reporting plan complaints 


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1 under the system. Such form shall be prominently 

2 displayed on the front page of the Medicare.gov 

3 Internet website and on the Internet website of the 

4 Medicare Beneficiary Ombudsman. 

5 (3) ANNUAL REPORTS BY THE SECRETARY.— 

6 The Secretary shall submit to Congress an annual 

7 report on the system. Such study shall include an 

8 analysis of the number and types of complaints re9 ported in the system, geographic variations in such 

10 complaints, the timeliness of agency or plan re11 sponses to such complaints, and the resolution of 

12 such complaints. 

13 (4) DEFINITIONS.—In this section: 

14 (A) MA–PD PLAN.—The term ‘‘MA–PD 

15 plan’’ has the meaning given such term in sec16 tion 1860D–41(a)(9) of such Act (42 U.S.C. 

17 1395w–151(a)(9)). 

18 (B) PRESCRIPTION DRUG PLAN.—The 

19 term ‘‘prescription drug plan’’ has the meaning 

20 given such term in section 1860D–41(a)(14) of 

21 such Act (42 U.S.C. 1395w–151(a)(14)). 

22 (C) SECRETARY.—The term ‘‘Secretary’’ 

23 means the Secretary of Health and Human 

24 Services. 


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1 (D) SYSTEM.—The term ‘‘system’’ means 

2 the plan complaint system developed and main3 tained under paragraph (1). 

4 (b) FUNDING.—There are authorized to be appro5 priated such sums as may be necessary for the costs of 

6 carrying out this section. 

7 SEC. 3314. UNIFORM EXCEPTIONS AND APPEALS PROCESS 

8 FOR PRESCRIPTION DRUG PLANS AND MA–PD 

9 PLANS. 

10 (a) IN GENERAL.—Section 1860D–4(b)(3) of the So11 cial Security Act (42 U.S.C. 1395w–104(b)(3)) is amend12 ed by adding at the end the following new subparagraph: 

13 ‘‘(H) USE OF SINGLE, UNIFORM EXCEP14 TIONS AND APPEALS PROCESS.—Notwith15 standing any other provision of this part, each 

16 PDP sponsor of a prescription drug plan shall, 

17 to the extent the Secretary determines fea18 sible— 

19 ‘‘(i) use a single, uniform exceptions 

20 and appeals process (including a single, 

21 uniform model form for use under such 

22 process) with respect to the determination 

23 of prescription drug coverage for an en24 rollee under the plan; and 


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1 ‘‘(ii) provide instant access to such 

2 process by enrollees through a toll-free 

3 telephone number and an Internet 

4 website.’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 subsection (a) shall apply to exceptions and appeals on 

7 or after January 1, 2012. 

8 SEC. 3315. OFFICE OF THE INSPECTOR GENERAL STUDIES 

9 AND REPORTS. 

10 (a) STUDY AND ANNUAL REPORT ON PART D 

11 FORMULARIES’ INCLUSION OF DRUGS COMMONLY USED

12 BY DUAL ELIGIBLES.— 

13 (1) STUDY.—The Inspector General of the De14 partment of Health and Human Services shall con15 duct a study of the extent to which formularies used 

16 by prescription drug plans and MA–PD plans under 

17 part D include drugs commonly used by full-benefit 

18 dual eligible individuals (as defined in section 

19 1935(c)(6) of the Social Security Act (42 U.S.C. 

20 1396u–5(c)(6))). 

21 (2) ANNUAL REPORTS.—Not later than July 1 

22 of each year (beginning with 2011), the Inspector 

23 General shall submit to Congress a report on the 

24 study conducted under paragraph (1), together with 


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1 such recommendations as the Inspector General de2 termines appropriate. 

3 (b) STUDY AND REPORT ON PRESCRIPTION DRUG

4 PRICES UNDER MEDICARE PART D AND MEDICAID.— 

5 (1) STUDY.— 

6 (A) IN GENERAL.—The Inspector General 

7 of the Department of Health and Human Serv8 ices shall conduct a study on prices for covered 

9 part D drugs under the Medicare prescription 

10 drug program under part D of title XVIII of 

11 the Social Security Act and for covered out12 patient drugs under title XIX. Such study shall 

13 include the following: 

14 (i) A comparison, with respect to the 

15 200 most frequently dispensed covered 

16 part D drugs under such program and cov17 ered outpatient drugs under such title (as 

18 determined by the Inspector General based 

19 on volume and expenditures), of— 

20 (I) the prices paid for covered 

21 part D drugs by PDP sponsors of 

22 prescription drug plans and Medicare 

23 Advantage organizations offering MA– 

24 PD plans; and 


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1 (II) the prices paid for covered 

2 outpatient drugs by a State plan 

3 under title XIX. 

4 (ii) An assessment of— 

5 (I) the financial impact of any 

6 discrepancies in such prices on the 

7 Federal government; and 

8 (II) the financial impact of any 

9 such discrepancies on enrollees under 

10 part D or individuals eligible for med11 ical assistance under a State plan 

12 under title XIX. 

13 (B) PRICE.—For purposes of subpara14 graph (A), the price of a covered part D drug 

15 or a covered outpatient drug shall include any 

16 rebate or discount under such program or such 

17 title, respectively, including any negotiated price 

18 concession described in section 1860D– 

19 2(d)(1)(B) of the Social Security Act (42 

20 U.S.C. 1395w–102(d)(1)(B)) or rebate under 

21 an agreement under section 1927 of the Social 

22 Security Act (42 U.S.C. 1396r–8). 

23 (C) AUTHORITY TO COLLECT ANY NEC24 ESSARY INFORMATION.—Notwithstanding any 

25 other provision of law, the Inspector General of 


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1 the Department of Health and Human Services 

2 shall be able to collect any information related 

3 to the prices of covered part D drugs under 

4 such program and covered outpatient drugs 

5 under such title XIX necessary to carry out the 

6 comparison under subparagraph (A). 

7 (2) REPORT.— 

8 (A) IN GENERAL.—Not later than October 

9 1, 2011, subject to subparagraph (B), the In10 spector General shall submit to Congress a re11 port containing the results of the study con12 ducted under paragraph (1), together with rec13 ommendations for such legislation and adminis14 trative action as the Inspector General deter15 mines appropriate. 

16 (B) LIMITATION ON INFORMATION CON17 TAINED IN REPORT.—The report submitted 

18 under subparagraph (A) shall not include any 

19 information that the Inspector General deter20 mines is proprietary or is likely to negatively 

21 impact the ability of a PDP sponsor or a State 

22 plan under title XIX to negotiate prices for cov23 ered part D drugs or covered outpatient drugs, 

24 respectively. 

25 (3) DEFINITIONS.—In this section: 


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1 (A) COVERED PART D DRUG.—The term 

2 ‘‘covered part D drug’’ has the meaning given 

3 such term in section 1860D–2(e) of the Social 

4 Security Act (42 U.S.C. 1395w–102(e)). 

5 (B) COVERED OUTPATIENT DRUG.—The 

6 term ‘‘covered outpatient drug’’ has the mean7 ing given such term in section 1927(k) of such 

8 Act (42 U.S.C. 1396r(k)). 

9 (C) MA–PD PLAN.—The term ‘‘MA–PD 

10 plan’’ has the meaning given such term in sec11 tion 1860D–41(a)(9) of such Act (42 U.S.C. 

12 1395w–151(a)(9)). 

13 (D) MEDICARE ADVANTAGE ORGANIZA14 TION.—The term ‘‘Medicare Advantage organi15 zation’’ has the meaning given such term in 

16 section 1859(a)(1) of such Act (42 U.S.C. 

17 1395w–28)(a)(1)). 

18 (E) PDP SPONSOR.—The term ‘‘PDP 

19 sponsor’’ has the meaning given such term in 

20 section 1860D–41(a)(13) of such Act (42 

21 U.S.C. 1395w–151(a)(13)). 

22 (F) PRESCRIPTION DRUG PLAN.—The 

23 term ‘‘prescription drug plan’’ has the meaning 

24 given such term in section 1860D–41(a)(14) of 

25 such Act (42 U.S.C. 1395w–151(a)(14)). 


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1 SEC. 3316. HHS STUDY AND ANNUAL REPORTS ON COV2 ERAGE FOR DUAL ELIGIBLES. 

3 (a) STUDY.— 

4 (1) IN GENERAL.—The Secretary of Health and 

5 Human Services (in this section referred to as the 

6 ‘‘Secretary’’) shall conduct a study to track— 

7 (A) how many of the new full benefit dual 

8 eligible individuals (as defined in section 

9 1935(c)(6) of the Social Security Act (42 

10 U.S.C. 1395u–5(c)(6))) enroll in a plan under 

11 part D of title XVIII of such Act and receive 

12 retroactive prescription drug coverage under the 

13 plan; and 

14 (B) if such retroactive coverage is provided 

15 to such individuals— 

16 (i) the number of months of coverage 

17 provided; and 

18 (ii) the amount of reimbursements to 

19 individuals and to individuals that made 

20 payments for prescription drugs on their 

21 behalf for costs incurred during retroactive 

22 coverage periods. 

23 (2) DATA TO USE.—In conducting the study 

24 with respect to the requirements under paragraph 

25 (1)(B), the Secretary shall examine prescription 

26 drug utilization data reported by prescription drug 


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1 plans under part D of title XVIII of the Social Secu2 rity Act (42 U.S.C. 1395w–101 et seq.). 

3 (b) ANNUAL REPORTS ON ONGOING STUDY.—Not 

4 later than January 1 of each year (beginning with 2012), 

5 the Secretary shall submit a report to Congress containing 

6 the results of the study conducted under subsection (a), 

7 together with recommendations for such legislation and 

8 administrative action as the Secretary determines appro9 priate. 

10 (c) ANNUAL REPORTS ON SPENDING AND OUT11 COMES.—Not later than January 1 of each year (begin12 ning with 2013), the Secretary shall collect data and sub13 mit a report to Congress that includes the following infor14 mation: 

15 (1) Annual total expenditures (disaggregated by 

16 Federal and State expenditures) for dually eligible 

17 beneficiaries under title XVIII and under State 

18 plans and waivers under title XIX. 

19 (2) An analysis of health outcomes for dually 

20 eligible beneficiaries, disaggregated by subtypes of 

21 beneficiaries (as determined by the Secretary). 

22 (3) An analysis of the extent to which dually el23 igible beneficiaries are able to access benefits under 

24 title XVIII and under State plans and waivers under 

25 title XIX. 


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1 SEC. 3317. INCLUDING COSTS INCURRED BY AIDS DRUG AS2 SISTANCE PROGRAMS AND INDIAN HEALTH 

3 SERVICE IN PROVIDING PRESCRIPTION 

4 DRUGS TOWARD THE ANNUAL OUT-OF-POCK5 ET THRESHOLD UNDER PART D. 

6 (a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the 

7 Social Security Act (42 U.S.C. 1395w–102(b)(4)(C)) is 

8 amended— 

9 (1) in clause (i), by striking ‘‘and’’ at the end; 

10 (2) in clause (ii)— 

11 (A) by striking ‘‘such costs shall be treated 

12 as incurred only if’’ and inserting ‘‘subject to 

13 clause (iii), such costs shall be treated as in14 curred only if’’; 

15 (B) by striking ‘‘, under section 1860D– 

16 14, or under a State Pharmaceutical Assistance 

17 Program’’; and 

18 (C) by striking the period at the end and 

19 inserting ‘‘; and’’; and 

20 (3) by inserting after clause (ii) the following 

21 new clause: 

22 ‘‘(iii) such costs shall be treated as in23 curred and shall not be considered to be 

24 reimbursed under clause (ii) if such costs 

25 are borne or paid— 

26 ‘‘(I) under section 1860D–14; 


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1 ‘‘(II) under a State Pharma2 ceutical Assistance Program; 

3 ‘‘(III) by the Indian Health Serv4 ice, an Indian tribe or tribal organiza5 tion, or an urban Indian organization 

6 (as defined in section 4 of the Indian 

7 Health Care Improvement Act); or 

8 ‘‘(IV) under an AIDS Drug As9 sistance Program under part B of 

10 title XXVI of the Public Health Serv11 ice Act.’’. 

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

13 subsection (a) shall apply to costs incurred on or after 

14 January 1, 2011. 

15 Subtitle E—Ensuring Medicare 

16 Sustainability 

17 SEC. 3401. REVISION OF CERTAIN MARKET BASKET UP18 DATES AND INCORPORATION OF PRODUC19 TIVITY IMPROVEMENTS INTO MARKET BAS20 KET UPDATES THAT DO NOT ALREADY IN21 CORPORATE SUCH IMPROVEMENTS. 

22 (a) INPATIENT ACUTE HOSPITALS.—Section 

23 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 

24 1395ww(b)(3)(B)) is amended— 

25 (1) in clause (i)— 


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1 (A) in subclause (XIX), by striking ‘‘and’’ 

2 at the end; 

3 (B) in subclause (XX)— 

4 (i) by striking ‘‘for each subsequent 

5 fiscal year’’ and inserting ‘‘for each of fis6 cal years 2007 through 2009’’; and 

7 (ii) by striking the period at the end 

8 and inserting a semicolon; and 

9 (iii) by adding at the end the fol10 lowing new subclauses: 

11 ‘‘(XXI) for each of fiscal years 

12 2010 through 2019, subject to clause 

13 (viii), the market basket percentage 

14 increase for hospitals in all areas 

15 minus the additional adjustment fac16 tor described in clause (x); and 

17 ‘‘(XXII) for each subsequent fis18 cal year, subject to clause (viii), the 

19 market basket percentage increase for 

20 hospitals in all areas.’’; 

21 (2) in clause (iii)— 

22 (A) by striking ‘‘(iii) For purposes of this 

23 subparagraph,’’ and inserting ‘‘(iii)(I) For pur24 poses of this subparagraph,’’; 


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1 (B) in subclause (I), as added by subpara2 graph (A), by adding at the end the following 

3 new sentences: ‘‘For 2012 and each subsequent 

4 fiscal year, such increase shall be reduced by 

5 the productivity adjustment described in sub6 clause (II). Except as otherwise provided, any 

7 reference to the increase described in this 

8 clause shall be a reference to the percentage in9 crease described in this subclause minus the 

10 percentage change described subclause (II).’’ 

11 (C) by adding at the end the following new 

12 subclause: 

13 ‘‘(II) The productivity adjustment described in this 

14 subclause, with respect to an increase or change for a fis15 cal year or year or cost reporting period, or other annual 

16 period, is a productivity adjustment equal to the 10-year 

17 moving average of changes in annual economy-wide pri18 vate nonfarm business multi-factor productivity (as pro19 jected by the Secretary for the applicable fiscal year, year, 

20 cost reporting period, or other annual period).’’; and 

21 (D) by adding at the end the following new 

22 clauses: 

23 ‘‘(x) For purposes of clause (i)(XXI), the additional 

24 adjustment factor described in this clause is— 


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1 ‘‘(I) for each of fiscal years 2010 and 2011, 

2 0.25 percent; and 

3 ‘‘(II) subject to clause (xi), for each of fiscal 

4 years 2012 through 2019, 0.2 percent. 

5 ‘‘(xi) If, for each of fiscal years 2014 through 2019, 

6 the total percentage of the non-elderly insured population 

7 for the preceding fiscal year is greater than 5 percentage 

8 points below the projection of the total percentage of the 

9 non-elderly insured population for such preceding fiscal 

10 year (as of the date of enactment of the America’s Healthy 

11 Future Act of 2009), as estimated by the Secretary, the 

12 additional adjustment factor described in clause (x) for the 

13 fiscal year shall be 0.0 percent.’’. 

14 (b) SKILLED NURSING FACILITIES.—Section 

15 1888(e)(5)(B) of the Social Security Act (42 U.S.C. 

16 1395yy(e)(4)) is amended by adding at the end the fol17 lowing new sentence: ‘‘For fiscal year 2012 and each sub18 sequent fiscal year, the percentage described in the pre19 ceding sentence shall be reduced by the productivity ad20 justment described in section 1886(b)(3)(B)(iii)(II).’’. 

21 (c) LONG-TERM CARE HOSPITALS.—Section 1886(m) 

22 of the Social Security Act (42 U.S.C. 1395ww(m)) is 

23 amended by adding at the end the following new para24 graphs: 


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1 ‘‘(3) IMPLEMENTATION FOR RATE YEAR 2010

2 AND SUBSEQUENT YEARS.—In implementing the 

3 system described in paragraph (1) for rate year 

4 2010 and each subsequent rate year, to the extent 

5 that an annual percentage increase factor applies to 

6 a standard Federal rate for discharges for the hos7 pital during the rate year, the following shall apply: 

8 ‘‘(A) UPDATE FOR RATE YEARS 2010

9 THROUGH 2019.—For discharges occurring dur10 ing each of rate years 2010 through 2019, the 

11 standard Federal rate for such discharges for 

12 the hospital shall be increased by the annual 

13 percentage increase factor minus the additional 

14 adjustment factor described in paragraph (4). 

15 ‘‘(B) PRODUCTIVITY ADJUSTMENT.—For 

16 discharges occurring during rate year 2012 and 

17 each subsequent rate year, such annual percent18 age increase factor shall be reduced by the pro19 ductivity adjustment described in section 

20 1886(b)(3)(B)(iii)(II). 

21 ‘‘(4) ADDITIONAL ADJUSTMENT FACTOR DE22 SCRIBED.— 

23 ‘‘(A) IN GENERAL.—For purposes of para24 graph (3)(A), the additional adjustment factor 

25 described in this paragraph is— 


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1 ‘‘(i) for each of rate years 2010 and 

2 2011, 0.25 percent; and 

3 ‘‘(ii) subject to subparagraph (B), for 

4 each of rate years 2012 through 2019, 0.2 

5 percent. 

6 ‘‘(B) REDUCTION OF ADJUSTMENT FAC7 TOR FOR CERTAIN HOSPITALS.—If, for each of 

8 rate years 2014 through 2019, the total per9 centage of the non-elderly insured population 

10 for the preceding rate year is greater than 5 

11 percentage points below the projection of the 

12 total percentage of the non-elderly insured pop13 ulation for such preceding rate year (as of the 

14 date of enactment of the America’s Healthy Fu15 ture Act of 2009), as estimated by the Sec16 retary, the additional adjustment factor de17 scribed in subparagraph (A) for the rate year 

18 shall be 0.0 percent.’’. 

19 (d) INPATIENT REHABILITATION FACILITIES.—Sec20 tion 1886(j)(3) of the Social Security Act (42 U.S.C. 

21 1395ww(j)(3)(C)) is amended— 

22 (1) in subparagraph (A)(i), by inserting ‘‘(for 

23 fiscal years before 2010 and for fiscal year 2020 and 

24 subsequent fiscal years)’’ after ‘‘2000 and’’; 


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1 (2) in subparagraph (C), by adding at the end 

2 the following new sentence: ‘‘For fiscal year 2012 

3 and each subsequent fiscal year, the appropriate per4 centage increase described in the preceding sentence 

5 shall be reduced by the productivity adjustment de6 scribed in section 1886(b)(3)(B)(iii)(II)).’’; and 

7 (3) by adding at the end the following new sub8 paragraph: 

9 ‘‘(D) UPDATE FOR FISCAL YEARS 2010

10 THROUGH 2019.— 

11 ‘‘(i) IN GENERAL.—For purposes of 

12 this subsection for payment units in each 

13 of fiscal years 2010 through 2019, the 

14 payment rate determined under this para15 graph shall be increased by the increase 

16 factor described in subparagraph (C) 

17 minus the additional adjustment factor de18 scribed in clause (ii). 

19 ‘‘(ii) ADDITIONAL ADJUSTMENT FAC20 TOR DESCRIBED.—For purposes of clause 

21 (i), the additional adjustment factor de22 scribed in this clause is— 

23 ‘‘(I) for each of fiscal years 2010 

24 and 2011, 0.25 percent; and 


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1 ‘‘(II) subject to clause (iii), for 

2 each of fiscal years 2012 through 

3 2019, 0.2 percent. 

4 ‘‘(iii) REDUCTION OF ADJUSTMENT

5 FACTOR FOR CERTAIN REHABILITATION

6 FACILITIES.—If, for each of fiscal years 

7 2014 through 2019, the total percentage of 

8 the non-elderly insured population for the 

9 preceding fiscal year is greater than 5 per10 centage points below the projection of the 

11 total percentage of the non-elderly insured 

12 population for such preceding fiscal year 

13 (as of the date of enactment of the Amer14 ica’s Healthy Future Act of 2009), as esti15 mated by the Secretary, the additional ad16 justment factor described in clause (ii) for 

17 the fiscal year shall be 0.0 percent.’’. 

18 (e) HOME HEALTH AGENCIES.—Section 1895(b)(3) 

19 of the Social Security Act (42 U.S.C. 1395fff(b)(3)) is 

20 amended— 

21 (1) in subparagraph (B)— 

22 (A) in clause (ii)— 

23 (i) in subclause (IV), by striking 

24 ‘‘and’’; 

25 (ii) in subclause (V)— 


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1 (I) by striking ‘‘any subsequent 

2 year’’ and inserting ‘‘each of 2007, 

3 2008, 2009, and 2010’’; and 

4 (II) by striking the period at the 

5 end and inserting a semicolon; and 

6 (iii) by adding at the end the fol7 lowing subclauses: 

8 ‘‘(VI) each of 2011 and 2012, 

9 subject to clause (v), the home health 

10 market basket percentage increase 

11 minus the additional adjustment fac12 tor described in subparagraph (D); 

13 and 

14 ‘‘(VII) any subsequent year, sub15 ject to clause (v), the home health 

16 market basket percentage increase.’’; 

17 and 

18 (B) in clause (iii), by inserting ‘‘(including, 

19 for 2015 and each subsequent year, being re20 duced by the productivity adjustment described 

21 in section 1886(b)(3)(B)(iii)(II))’’ after ‘‘in the 

22 same manner’’; and 

23 (2) by adding at the end the following new sub24 paragraph: 


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1 ‘‘(D) ADDITIONAL ADJUSTMENT FACTOR

2 DESCRIBED.—For purposes of subparagraph 

3 (B)(ii)(VI), the additional adjustment factor de4 scribed in this subparagraph is 1.0 percent.’’. 

5 (f) PSYCHIATRIC HOSPITALS.—Section 1886 of the 

6 Social Security Act, as amended by sections 3001, 3008, 

7 3025, 3133, is amended by adding at the end the following 

8 new subsection: 

9 ‘‘(s) PROSPECTIVE PAYMENT FOR PSYCHIATRIC

10 HOSPITALS.— 

11 ‘‘(1) REFERENCE TO ESTABLISHMENT AND IM12 PLEMENTATION OF SYSTEM.—For provisions related 

13 to the establishment and implementation of a pro14 spective payment system for payments under this 

15 title for inpatient hospital services furnished by psy16 chiatric hospitals (as described in clause (i) of sub17 section (d)(1)(B) and psychiatric units (as described 

18 in the matter following clause (v) of such sub19 section), see section 124 of the Medicare, Medicaid, 

20 and SCHIP Balanced Budget Refinement Act of 

21 1999. 

22 ‘‘(2) IMPLEMENTATION FOR RATE YEAR BEGIN23 NING IN 2010 AND SUBSEQUENT RATE YEARS.—In 

24 implementing the system described in paragraph (1) 

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1 quent rate year, to the extent that an annual per2 centage increase factor applies to a base rate for 

3 days during the rate year for a psychiatric hospital 

4 or unit, respectively, the following shall apply: 

5 ‘‘(A) UPDATE FOR RATE YEARS BEGIN6 NING IN 2010 THROUGH 2019.—For days occur7 ring during each of the rate years beginning in 

8 2010 through 2019, the base rate for such days 

9 for the hospital or unit shall be increased by the 

10 annual percentage increase factor minus the ad11 ditional adjustment factor described in para12 graph (3). 

13 ‘‘(B) PRODUCTIVITY ADJUSTMENT.—For 

14 days occurring during the rate year beginning 

15 in 2012 and any subsequent rate year, such 

16 factor shall be reduced by the productivity ad17 justment described in section 

18 1886(b)(3)(B)(iii)(II). 

19 ‘‘(3) ADDITIONAL ADJUSTMENT FACTOR DE20 SCRIBED.— 

21 ‘‘(A) IN GENERAL.—For purposes of para22 graph (2)(A), the additional adjustment factor 

23 described in this paragraph is— 

24 ‘‘(i) for each of the rate years begin25 ning in 2010 and 2011, 0.25 percent; and 


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1 ‘‘(ii) subject to subparagraph (B), for 

2 each of the rate years beginning in 2012 

3 through 2019, 0.2 percent. 

4 ‘‘(B) REDUCTION OF ADJUSTMENT FAC5 TOR FOR CERTAIN PSYCHIATRIC HOSPITALS

6 AND UNITS.—If, for each of the rate years be7 ginning in 2014 through 2019, the total per8 centage of the non-elderly insured population 

9 for the rate year beginning in the preceding 

10 year is greater than 5 percentage points below 

11 the projection of the total percentage of the 

12 non-elderly insured population for the rate year 

13 beginning in such preceding year (as of the date 

14 of enactment of the America’s Healthy Future 

15 Act of 2009), as estimated by the Secretary, 

16 the additional adjustment factor described in 

17 subparagraph (A) for the rate year shall be 0.0 

18 percent.’’. 

19 (g) HOSPICE CARE.—Section 1814(i)(1)(C) of the 

20 Social Security Act (42 U.S.C. 1395f(i)(1)(C)), as amend21 ed by section 3132, is amended— 

22 (1) in clause (ii)— 

23 (A) in subclause (VI), by striking ‘‘and’’ at 

24 the end; and 

25 (B) in subclause (VII)— 


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1 (i) by striking ‘‘for a subsequent fiscal 

2 year (before fiscal year 2014)’’ and insert3 ing ‘‘for each of fiscal years 2003 through 

4 2012’’; 

5 (ii) by striking the period at the end 

6 and inserting ‘‘; and’’; and 

7 (iii) by adding at the end the fol8 lowing new subclause: 

9 ‘‘(VIII) for fiscal year 2013, the market basket 

10 percentage increase for the fiscal year (which is re11 duced by the productivity adjustment described in 

12 section 1886(b)(3)(B)(iii)(II)) minus the additional 

13 adjustment factor described in clause (iv).’’; 

14 (2) in clause (iii)— 

15 (A) in subclause (I)— 

16 (i) by inserting ‘‘(which is reduced by 

17 the productivity adjustment described in 

18 section 1886(b)(3)(B)(iii)(II)) minus the 

19 additional adjustment factor described in 

20 clause (iv)’’ before the semicolon at the 

21 end; and 

22 (ii) by striking ‘‘and’’ at the end; 

23 (B) in subclause (II)— 

24 (i) by striking ‘‘for a subsequent fiscal 

25 year’’ and inserting ‘‘for each of fiscal 


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1 years 2015 through 2019, subject to clause 

2 (v),’’; 

3 (ii) by inserting ‘‘(which is reduced by 

4 the productivity adjustment described in 

5 section 1886(b)(3)(B)(iii)(II)) minus the 

6 additional adjustment factor described in 

7 clause (iv)’’ after ‘‘for the fiscal year’’; and 

8 (iii) by striking the period at the end 

9 and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following new 

11 subclause: 

12 ‘‘(III) for a subsequent fiscal year, the payment 

13 rates in effect under this clause during the previous 

14 fiscal year increased by the market basket percent15 age increase for the fiscal year (which is reduced by 

16 the productivity adjustment described in section 

17 1886(b)(3)(B)(iii)(II)).’’; and 

18 (3) by adding at the end the following new 

19 clauses: 

20 ‘‘(iv) For purposes of clause (ii)(VIII) and clause 

21 (iii)(II), the additional adjustment factor described in this 

22 clause is 0.5 percent. 

23 ‘‘(v) If, for each of fiscal years 2014 through 2019, 

24 the total percentage of the non-elderly insured population 

25 for the preceding fiscal year is greater than 5 percentage 


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1 points below the projection of the total percentage of the 

2 non-elderly insured population for such preceding fiscal 

3 year (as of the date of enactment of the America’s Healthy 

4 Future Act of 2009), as estimated by the Secretary, the 

5 additional adjustment factor described in clause (iv) for 

6 the fiscal year shall be 0.0 percent’’. 

7 (h) DIALYSIS.—Section 1881(b)(14)(F) of the Social 

8 Security Act (42 U.S.C. 1395rr(b)(14)(F)) is amended by 

9 striking ‘‘minus 1.0 percentage points’’ and inserting ‘‘re10 duced by the productivity adjustment described in section 

11 1886(b)(3)(B)(iii)(II)’’ each place it appears in clauses (i) 

12 and (ii)(II). 

13 (i) OUTPATIENT HOSPITALS.—Section 1833(t)(3) of 

14 the Social Security Act (42 U.S.C. 1395l(t)(3)) is amend15 ed— 

16 (1) in subparagraph (C)(iv)— 

17 (A) in the first sentence, by inserting 

18 (which, for fiscal year 2012 and each subse19 quent fiscal year, is reduced by the productivity 

20 adjustment described in section 

21 1886(b)(3)(B)(iii)(II)) after 

22 ‘‘1886(b)(3)(B)(iii)’’; and 

23 (B) in the second sentence, by inserting ‘‘, 

24 and which, for 2012 and each subsequent year, 

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1 scribed in section 1886(b)(3)(iii)(II)’’ before the 

2 period at the end; and 

3 (2) by adding at the end the following new sub4 paragraph: 

5 ‘‘(F) UPDATE FOR 2010 THROUGH 2019.— 

6 ‘‘(i) IN GENERAL.—With respect to 

7 covered OPD services furnished in each of 

8 2010 through 2019, the amount of pay9 ment under the prospective payment sys10 tem established under this subsection shall 

11 be increased by the increase factor de12 scribed in subparagraph (C) minus the ad13 ditional adjustment factor described in 

14 clause (ii). 

15 ‘‘(ii) ADDITIONAL ADJUSTMENT FAC16 TOR DESCRIBED.—For purposes of clause 

17 (i), the additional adjustment factor de18 scribed in this clause is— 

19 ‘‘(I) for each of 2010 and 2011, 

20 0.25 percent; and 

21 ‘‘(II) subject to clause (iii), for 

22 each of 2012 through 2019, 0.2 per23 cent. 

24 ‘‘(iii) REDUCTION OF ADJUSTMENT

25 FACTOR FOR CERTAIN HOSPITALS.—If, for 


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1 each of 2014 through 2019, the total per2 centage of the non-elderly insured popu3 lation for the preceding year is greater 

4 than 5 percentage points below the projec5 tion of the total percentage of the non-el6 derly insured population for such preceding 

7 year (as of the date of enactment of the 

8 America’s Healthy Future Act of 2009), as 

9 estimated by the Secretary, the additional 

10 adjustment factor described in clause (ii) 

11 for the year shall be 0.0 percent.’’. 

12 (j) AMBULANCE SERVICES.—Section 1834(l)(3)(B) 

13 of the Social Security Act (42 U.S.C. 1395m(l)(3)(B)) is 

14 amended by inserting before the period at the end the fol15 lowing: ‘‘and, in the case of 2011 and each subsequent 

16 year, reduced by the productivity adjustment described in 

17 section 1886(b)(3)(B)(iii)(II)’’. 

18 (k) AMBULATORY SURGICAL CENTER SERVICES.— 

19 Section 1833(i)(2)(D) of the Social Security Act (42 

20 U.S.C. 1395l(i)(2)(D)) is amended— 

21 (1) by redesignating clause (v) as clause (vi); 

22 and 

23 (2) by inserting after clause (iv) the following 

24 new clause: 


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1 ‘‘(v) In implementing the system de2 scribed in clause (i), for services furnished 

3 during 2011 and each subsequent year, to 

4 the extent that an annual percentage 

5 change factor applies, such factor shall be 

6 reduced by the productivity adjustment de7 scribed in section 1886(b)(3)(B)(iii)(II).’’. 

8 (l) LABORATORY SERVICES.—Section 1833(h)(2)(A) 

9 of the Social Security Act (42 U.S.C. 1395l(h)(2)(A)) is 

10 amended— 

11 (1) in clause (i), by striking ‘‘minus, for each 

12 of the years 2009 through 2013, 0.5 percentage 

13 points’’ and inserting ‘‘reduced, for 2011 and each 

14 subsequent year, by the productivity adjustment de15 scribed in section 1886(b)(3)(B)(iii)(II), except that 

16 the application of such productivity adjustment shall 

17 not result in the annual adjustment under this 

18 clause being less than 0.0’’; and 

19 (2) in clause (ii)— 

20 (A) by striking ‘‘and’’ at the end of sub21 clause (III); 

22 (B) by striking the period at the end of 

23 subclause (IV) and inserting a comma; and 

24 (C) by adding at the end the following new 

25 subclauses: 


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1 ‘‘(V) the annual adjustment in 

2 the fee schedules, as determined 

3 under clause (i), for each of 2009 and 

4 2010 shall be reduced by 0.5 percent5 age points, 

6 ‘‘(VI) the annual adjustment in 

7 the fee schedules, as determined 

8 under clause (i), for each of the years 

9 2011 through 2014 shall be reduced 

10 by 1.75 percentage points (which may 

11 include a reduction below zero), and 

12 ‘‘(VII) the annual adjustment in 

13 the fee schedules, as determined 

14 under clause (i), for 2015 shall be re15 duced by 1.95 percentage points 

16 (which may include a reduction below 

17 zero).’’. 

18 (m) CERTAIN DURABLE MEDICAL EQUIPMENT.— 

19 Section 1834(a)(14) of the Social Security Act (42 U.S.C. 

20 1395m(a)(14)) is amended— 

21 (1) by redesignating subparagraphs (L) and 

22 (M) as subparagraphs (M) and (N), respectively; 

23 (2) in subparagraph (K), by striking ‘‘2011, 

24 2012, and 2013,’’; 


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1 (3) by inserting after subparagraph (K), the 

2 following new subparagraph: 

3 ‘‘(L) for 2011, 2012, and 2013, the per4 centage increase in the consumer price index for 

5 all urban consumers (U.S. urban average) for 

6 the 12-month period ending with June of the 

7 previous year, reduced by the productivity ad8 justment described in section 

9 1886(b)(3)(B)(iii)(II);’’. 

10 (4) in subparagraph (M), as redesignated by 

11 paragraph (1)— 

12 (A) in clause (i), by striking ‘‘, plus 2.0 

13 percentage points’’; and 

14 (B) in each of clauses (i) and (ii), by in15 serting ‘‘reduced by the productivity adjustment 

16 described in section 1886(b)(3)(B)(iii)(II),’’ 

17 after ‘‘June 2013,’’; and 

18 (5) in subparagraph (N), as redesignated by 

19 paragraph (1), by inserting ‘‘, reduced by the pro20 ductivity adjustment described in section 

21 1886(b)(3)(B)(iii)(II)’’ before the period at the end. 

22 (n) PROSTHETIC DEVICES, ORTHOTICS, AND PROS23 THETICS.—Section 1834(h)(4)(A)(x) of the Social Secu24 rity Act (42 U.S.C. 1395m(h)(4)(A)(x)) is amended by in25 serting ‘‘and, in the case of 2011 and each subsequent 


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1 year, reduced by the productivity adjustment described in 

2 section 1886(b)(3)(B)(iii)(II)’’ before the semicolon at the 

3 end. 

4 (o) OTHER ITEMS.—The second sentence of section 

5 1842(s)(1) of the Social Security Act (42 U.S.C. 

6 1395u(s)(1)), in the matter preceding subparagraph (A), 

7 is amended by inserting ‘‘and, in the case of 2011 and 

8 each subsequent year, reduced by the productivity adjust9 ment described in section 1886(b)(3)(B)(iii)(II)’’ after 

10 ‘‘preceding year’’. 

11 (p) NO APPLICATION PRIOR TO JANUARY 1, 2010.— 

12 Notwithstanding the preceding provisions of this section— 

13 (1) the amendments made by subsections (a), 

14 (c), and (d) shall not apply to discharges occurring 

15 before January 1, 2010; and 

16 (2) the amendments made by subsection (f) 

17 shall not apply to days occurring before January 1, 

18 2010. 

19 SEC. 3402. TEMPORARY ADJUSTMENT TO THE CALCULA20 TION OF PART B PREMIUMS. 

21 Section 1839(i) of the Social Security Act (42 U.S.C. 

22 1395r(i)) is amended— 

23 (1) in paragraph (2), in the matter preceding 

24 subparagraph (A), by inserting ‘‘subject to para25 graph (6),’’ after ‘‘subsection,’’; 


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1 (2) in paragraph (3)(A)(i), by striking ‘‘The ap2 plicable’’ and inserting ‘‘Subject to paragraph (6), 

3 the applicable’’; 

4 (3) by redesignating paragraph (6) as para5 graph (7); and 

6 (4) by inserting after paragraph (5) the fol7 lowing new paragraph: 

8 ‘‘(6) TEMPORARY ADJUSTMENT TO INCOME

9 THRESHOLDS.—Notwithstanding any other provision 

10 of this subsection, during the period beginning on 

11 January 1, 2011, and ending on December 31, 

12 2019— 

13 ‘‘(A) the threshold amount otherwise appli14 cable under paragraph (2) shall be equal to 

15 such amount for 2010; and 

16 ‘‘(B) the dollar amounts otherwise applica17 ble under paragraph (3)(C)(i) shall be equal to 

18 such dollar amounts for 2010.’’. 

19 SEC. 3403. MEDICARE COMMISSION. 

20 (a) COMMISSION.— 

21 (1) IN GENERAL.—Title XVIII of the Social Se22 curity Act (42 U.S.C. 1395 et seq.), as amended by 

23 section 3022, is amended by adding at the end the 

24 following new section: 


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1 ‘‘MEDICARE COMMISSION

2 ‘‘SEC. 1899A. (a) ESTABLISHMENT.—There is estab3 lished an independent commission to be known as the 

4 ‘Medicare Commission’ 

5 ‘‘(b) PURPOSE.—It is the purpose of this section to, 

6 in accordance with the following provisions of this section, 

7 reduce the per capita rate of growth in Medicare spend8 ing— 

9 ‘‘(1) by requiring the Chief Actuary of the Cen10 ters for Medicare & Medicaid Services to determine 

11 in each year to which this section applies (in this 

12 section referred to as ‘a determination year ’) the 

13 projected per capita growth rate under Medicare for 

14 the second year following the determination year (in 

15 this section referred to as ‘an implementation year’); 

16 ‘‘(2) if the projection for the implementation 

17 year exceeds the target growth rate for that year, by 

18 requiring the Commission to develop and submit 

19 during the first year following the determination 

20 year (in this section referred to as ‘a proposal year 

21 ’) a proposal to reduce the Medicare per capita 

22 growth rate to the extent required by this section; 

23 and 


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1 ‘‘(3) by requiring the Secretary to implement 

2 such proposals unless Congress enacts legislation 

3 pursuant to this section. 

4 ‘‘(c) COMMISSION PROPOSALS.— 

5 ‘‘(1) DEVELOPMENT AND SUBMISSION.— 

6 ‘‘(A) IN GENERAL.—The Commission shall 

7 develop and submit detailed and specific pro8 posals to Congress in accordance with the suc9 ceeding provisions of this section. 

10 ‘‘(B) ADVISORY REPORTS.—Beginning 

11 January 1, 2014, the Commission may submit 

12 to Congress advisory reports on matters related 

13 to the Medicare program, regardless of whether 

14 or not the Commission submitted a proposal for 

15 such year. Such a report may, for years prior 

16 to 2020, include recommendations regarding 

17 improvements to payment systems for providers 

18 of services and suppliers who are not otherwise 

19 subject to the scope of the Commission’s rec20 ommendations in a proposal under this section. 

21 Any advisory report submitted under this sub22 paragraph shall not be subject to the rules for 

23 congressional consideration under subsection 

24 (d). 

25 ‘‘(2) SCOPE OF PROPOSALS.— 


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1 ‘‘(A) REQUIREMENTS.—Each proposal 

2 submitted under this section in a proposal year 

3 shall meet each of the following requirements: 

4 ‘‘(i) If the Chief Actuary of the Cen5 ters for Medicare & Medicaid Services has 

6 made a determination under paragraph 

7 (5)(A) in the determination year, the pro8 posal shall include recommendations so 

9 that the proposal as a whole (after taking 

10 into account recommendations under 

11 clause (v)) will result in a net reduction in 

12 total Medicare program spending in the 

13 implementation year equal to the applica14 ble savings target established under para15 graph (5)(B) for such implementation 

16 year. In determining whether a proposal 

17 meets the requirement of the preceding 

18 sentence, reductions in Medicare program 

19 spending during the 3-month period imme20 diately preceding the implementation year 

21 shall be counted to the extent that such re22 ductions are a result of the implementation 

23 of recommendations contained in the pro24 posal for a change in the payment rate for 

25 an item or service that was effective during 


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1 such period pursuant to subsection 

2 (e)(2)(A). 

3 ‘‘(ii) The proposal shall not include 

4 any recommendation to ration health care, 

5 raise revenues or Medicare beneficiary pre6 miums under section 1818, 1818A, or 

7 1839, increase Medicare beneficiary cost8 sharing (including deductibles, coinsur9 ance, and copayments), or otherwise re10 strict benefits or modify eligibility criteria. 

11 ‘‘(iii) In the case of proposals sub12 mitted prior to December 31, 2018, the 

13 proposal shall not include any rec14 ommendation that would impact, prior to 

15 December 31, 2019, providers of services 

16 (as defined in section 1861(u)) and sup17 pliers (as defined in section 1861(d)) 

18 scheduled to receive a reduction to the in19 flationary payment updates of such pro20 viders of services and suppliers in excess of 

21 a reduction due to productivity in a year in 

22 which such recommendations would take 

23 effect. 

24 ‘‘(iv) As appropriate, the proposal 

25 shall include recommendations to reduce 


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1 Medicare payments under parts C and D, 

2 such as reductions under such parts in the 

3 Federal premium subsidies to Medicare 

4 Advantage and prescription drug plans and 

5 the performance bonuses. 

6 ‘‘(v) The proposal shall include rec7 ommendations with respect to administra8 tive funding for the Secretary to carry out 

9 the recommendations contained in the pro10 posal. 

11 ‘‘(B) ADDITIONAL CONSIDERATIONS.—In 

12 developing and submitting each proposal under 

13 this section in a proposal year, the Commission 

14 shall, to the extent feasible— 

15 ‘‘(i) include recommendations that 

16 target reductions in Medicare program 

17 spending to sources of excess cost growth; 

18 ‘‘(ii) include recommendations that— 

19 ‘‘(I) improve the health care de20 livery system and health outcomes, in21 cluding by promoting integrated care, 

22 care coordination, prevention and 

23 wellness, and quality and efficiency 

24 improvement; and 


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1 ‘‘(II) protect and improve Medi2 care beneficiaries’ access to necessary 

3 and evidence-based items and services, 

4 including in rural and frontier areas; 

5 ‘‘(iii) give priority to recommendations 

6 that extend Medicare solvency; 

7 ‘‘(iv) consider the effects on Medicare 

8 beneficiaries of changes in payments to 

9 providers of services (as defined in section 

10 1861(u)) and suppliers (as defined in sec11 tion 1861(d)); 

12 ‘‘(v) consider the effects of the rec13 ommendations on providers of services and 

14 suppliers with actual or projected negative 

15 cost margins or payment updates; and 

16 ‘‘(vi) consider the unique needs of 

17 Medicare beneficiaries who are dually eligi18 ble for Medicare and the Medicaid program 

19 under title XIX. 

20 ‘‘(C) NO INCREASE IN TOTAL MEDICARE

21 PROGRAM SPENDING.—Each proposal submitted 

22 under this section shall be designed in such a 

23 manner that implementation of the rec24 ommendations contained in the proposal would 

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1 riod starting with the implementation year, in 

2 any increase in the total amount of net Medi3 care program spending relative to the total 

4 amount of net Medicare program spending that 

5 would have occurred absent such implementa6 tion. 

7 ‘‘(D) CONSULTATION WITH MEDPAC.—The 

8 Commission shall submit a draft copy of each 

9 proposal to be submitted to Congress under this 

10 section to the Medicare Payment Advisory Com11 mission established under section 1805 for its 

12 review. The commission shall submit such draft 

13 copy by not later than September 1 of the year 

14 preceding the year for which the proposal is to 

15 be submitted. Not later than February 1 of the 

16 succeeding year, the Medicare Payment Advi17 sory Commission shall submit a report to Con18 gress on the results of such review. 

19 ‘‘(E) REVIEW AND COMMENT BY THE SEC20 RETARY.—The Commission shall submit a draft 

21 copy of each proposal to be submitted to Con22 gress under this section to the Secretary for the 

23 Secretary’s review and comment. The Commis24 sion shall submit such draft copy by not later 

25 than September 1 of the year preceding the 


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1 year for which the proposal is to be submitted. 

2 Not later than February 1 of the succeeding 

3 year, the Secretary shall submit a report to 

4 Congress on the results of such review, unless 

5 the Secretary submits a proposal under para6 graph (3)(C) in that year. 

7 ‘‘(F) CONSULTATIONS.—In carrying out 

8 its duties under this section, the Commission 

9 shall engage in regular consultations with the 

10 Medicaid and CHIP Payment and Access Com11 mission under section 1900. 

12 ‘‘(3) SUBMISSION.— 

13 ‘‘(A) REQUIRED INFORMATION.—Each 

14 proposal submitted by the Commission to Con15 gress under this section shall include— 

16 ‘‘(i) an explanation of each rec17 ommendation contained in the proposal 

18 and the reasons for including such rec19 ommendation; and 

20 ‘‘(ii) an actuarial opinion by the Chief 

21 Actuary of the Centers for Medicare & 

22 Medicaid Services certifying that the pro23 posal meets the requirements of subpara24 graphs (A)(i) and (C) of paragraph (2). 

25 ‘‘(B) DATES FOR SUBMISSION.— 


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1 ‘‘(i) IN GENERAL.—Except as pro2 vided in clause (ii) and subsection 

3 (f)(3)(B), the Commission shall submit a 

4 proposal to Congress on January 1, 2014, 

5 and annually thereafter. 

6 ‘‘(ii) EXCEPTION.—The Commission 

7 shall not submit a proposal to Congress 

8 under this section in a proposal year if the 

9 year is— 

10 ‘‘(I) a year for which the Chief 

11 Actuary of the Centers for Medicare & 

12 Medicaid Services make a determina13 tion in the determination year under 

14 paragraph (4)(A) that the growth rate 

15 described in clause (i) of such para16 graph does not exceed the growth rate 

17 described in clause (ii) of such para18 graph; or 

19 ‘‘(II) a year in which the percent20 age increase (if any) for the medical 

21 care expenditure category of the Con22 sumer Price Index for All Urban Con23 sumers (United States city average) 

24 for the implementation year is less 

25 than the percentage increase (if any) 


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1 in the Consumer Price Index for All 

2 Urban Consumers (all items; United 

3 States city average) for such imple4 mentation year; 

5 ‘‘(III) the year referred to in sub6 section (f)(1)(A). 

7 ‘‘(iii) START-UP PERIOD.—The Com8 mission may not submit a proposal to Con9 gress prior to January 1, 2014. 

10 ‘‘(C) CONTINGENT SECRETARIAL SUBMIS11 SION.—If, with respect to a proposal year, the 

12 Commission is required to but fails to submit a 

13 proposal by the deadline applicable under sub14 paragraph (B)(i), the Secretary shall submit a 

15 detailed and specific proposal to Congress that 

16 satisfies the requirements of subparagraph (A) 

17 and subparagraphs (A), (B), and (C) of para18 graph (2) not later than January 5 of the year. 

19 The Secretary shall transmit a copy of the pro20 posal to the Medicare Payment Advisory Com21 mission for its review. The Medicare Payment 

22 Advisory Commission shall submit a report to 

23 Congress on the results of such review by Feb24 ruary 1 of the year. 


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1 ‘‘(4) PER CAPITA GROWTH RATE PROJECTIONS

2 BY CHIEF ACTUARY.— 

3 ‘‘(A) IN GENERAL.—Subject to subsection 

4 (f)(3)(A), not later than April 30, 2013, and 

5 annually thereafter, the Chief Actuary of the 

6 Centers for Medicare & Medicaid Services shall 

7 determine in each such year whether— 

8 ‘‘(i) the projected Medicare per capita 

9 growth rate for the implementation year 

10 (as determined under subparagraph (B)); 

11 exceeds 

12 ‘‘(ii) the projected Medicare per capita 

13 target growth rate for the implementation 

14 year (as determined under subparagraph 

15 (C)). 

16 ‘‘(B) MEDICARE PER CAPITA GROWTH

17 RATE.— 

18 ‘‘(i) IN GENERAL.—For purposes of 

19 this section, the Medicare per capita 

20 growth rate for an implementation year 

21 shall be calculated as the projected 5-year 

22 average (ending with such year) of the 

23 growth in Medicare program spending per 

24 unduplicated enrollee. 


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1 ‘‘(ii) REQUIREMENT.—The projection 

2 under clause (i) shall— 

3 ‘‘(I) to the extent that there is 

4 projected to be a negative update to 

5 the single conversion factor applicable 

6 to payments for physicians’ services 

7 under section 1848(d) furnished in 

8 the proposal year or the implementa9 tion year, assume that such update 

10 for such services is 0 percent rather 

11 than the negative percent that would 

12 otherwise apply; and 

13 ‘‘(II) take into account any deliv14 ery system reforms or other payment 

15 changes that have been enacted or 

16 published in final rules but not yet 

17 implemented as of the making of such 

18 calculation. 

19 ‘‘(C) MEDICARE PER CAPITA TARGET

20 GROWTH RATE.—For purposes of this section, 

21 the Medicare per capita target growth rate for 

22 an implementation year shall be calculated as 

23 the projected 5-year average (ending with such 

24 year) percentage increase in— 


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1 ‘‘(i) in the case of a determination 

2 year that is prior to 2018, the average of 

3 the projected percentage increase (if any) 

4 in— 

5 ‘‘(I) the Consumer Price Index 

6 for All Urban Consumers (all items; 

7 United States city average); and 

8 ‘‘(II) the medical care expendi9 ture category of the Consumer Price 

10 Index for All Urban Consumers 

11 (United States city average); and 

12 ‘‘(ii) in the case of a determination 

13 year that is after 2017, the nominal gross 

14 domestic product per capita plus 1.0 per15 centage point. 

16 ‘‘(5) SAVINGS REQUIREMENT.— 

17 ‘‘(A) IN GENERAL.—If, with respect to a 

18 determination year, the Chief Actuary of the 

19 Centers for Medicare & Medicaid Services 

20 makes a determination under paragraph (4)(A) 

21 that the growth rate described in clause (i) of 

22 such paragraph exceeds the growth rate de23 scribed in clause (ii) of such paragraph, the 

24 Chief Actuary shall establish an applicable sav25 ings target for the implementation year. 


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1 ‘‘(B) APPLICABLE SAVINGS TARGET.—For 

2 purposes of this section, the applicable savings 

3 target for an implementation year shall be an 

4 amount equal to the product of— 

5 ‘‘(i) the total amount of projected 

6 Medicare program spending for the pro7 posal year; and 

8 ‘‘(ii) the applicable percent for the im9 plementation year. 

10 ‘‘(C) APPLICABLE PERCENT.—For pur11 poses of subparagraph (B), the applicable per12 cent for a projection is the lesser of— 

13 ‘‘(i) in the case of— 

14 ‘‘(I) implementation year 2015, 

15 0.5 percent; 

16 ‘‘(II) implementation year 2016, 

17 1.0 percent; 

18 ‘‘(III) implementation year 2017, 

19 1.25 percent; and 

20 ‘‘(IV) implementation year 2018 

21 or any subsequent implementation 

22 year, 1.5 percent; and 

23 ‘‘(ii) the projected excess for the im24 plementation year (expressed as a percent) 

25 determined under subparagraph (A). 


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1 ‘‘(d) CONGRESSIONAL CONSIDERATION.— 

2 ‘‘(1) COMMITTEE CONSIDERATION OF PRO3 POSAL; DISCHARGE; CONTINGENCY FOR INTRODUC4 TION.—Not later than April 1 of any proposal year 

5 in which a Commission proposal or Secretarial pro6 posal is submitted to Congress under this section, 

7 the appropriate committees of Congress shall report 

8 legislation implementing the recommendations con9 tained in the proposal or legislation that satisfies the 

10 requirements of subparagraphs (A), (B), and (C) of 

11 subsection (c)(2). If, with respect to the House in12 volved, any such committee has not reported such 

13 legislation by such date, such committees shall be 

14 deemed to be discharged from further consideration 

15 of the proposal and any member of the House of 

16 Representatives or the Senate, respectively, may in17 troduce legislation implementing the recommenda18 tions contained in the proposal and such legislation 

19 shall be placed on the appropriate calendar of the 

20 House involved. 

21 ‘‘(2) EXPEDITED PROCEDURE.— 

22 ‘‘(A) CONSIDERATION.—If legislation is re23 ported out of committee or legislation is intro24 duced under paragraph (1), not later than 15 

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1 mittee has been or could have been discharged 

2 from consideration of such legislation or such 

3 legislation is introduced, the Speaker of the 

4 House of Representatives, or the Speaker’s des5 ignee, or the majority leader of the Senate, or 

6 the leader’s designee, shall move to proceed to 

7 the consideration of the legislation. It shall also 

8 be in order for any member of the Senate or 

9 the House of Representatives, respectively, to 

10 move to proceed to the consideration of the leg11 islation at any time after the conclusion of such 

12 15-day period. All points of order against the 

13 legislation (and against consideration of the leg14 islation) with the exception of points of order 

15 under the Congressional Budget Act of 1974 

16 and points of order to strike any matters extra17 neous to Medicare are waived. A motion to pro18 ceed to the consideration of the legislation is 

19 privileged in the Senate and highly privileged in 

20 the House of Representatives and is not debat21 able. The motion is not subject to amendment, 

22 to a motion to postpone consideration of the 

23 legislation, or to a motion to proceed to the 

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1 ceed is agreed to or not agreed to shall not be 

2 in order. If the motion to proceed is agreed to, 

3 the Senate or the House of Representatives, as 

4 the case may be, shall immediately proceed to 

5 consideration of the legislation in accordance 

6 with the Standing Rules of the Senate or the 

7 House of Representatives, as the case may be, 

8 without intervening motion, order, or other 

9 business, and the resolution shall remain the 

10 unfinished business of the Senate or the House 

11 of Representatives, as the case may be, until 

12 disposed of. 

13 ‘‘(B) CONSIDERATION BY OTHER

14 HOUSE.—If, before the passage by one House 

15 of the legislation that was introduced in such 

16 House, such House receives from the other 

17 House legislation as passed by such other 

18 House— 

19 ‘‘(i) the legislation of the other House 

20 shall not be referred to a committee and 

21 shall immediately displace the legislation 

22 that was reported or introduced in the 

23 House in receipt of the legislation of the 

24 other House; and 


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1 ‘‘(ii) the legislation of the other House 

2 shall immediately be considered by the re3 ceiving House under the same procedures 

4 applicable to legislation reported by or dis5 charged from a committee or introduced 

6 under paragraph (1). 

7 Upon disposition of legislation that is received 

8 by one House from the other House, it shall no 

9 longer be in order to consider the legislation 

10 that was reported or introduced in the receiving 

11 House. 

12 ‘‘(C) SENATE LIMITS ON DEBATE.—In the 

13 Senate, consideration of the legislation and on 

14 all debatable motions and appeals in connection 

15 therewith shall not exceed a total of 30 hours, 

16 which shall be divided equally between those fa17 voring and those opposing the legislation. A mo18 tion further to limit debate on the legislation is 

19 in order and is not debatable. Any debatable 

20 motion or appeal is debatable for not to exceed 

21 1 hour, to be divided equally between those fa22 voring and those opposing the motion or appeal. 

23 All time used for consideration of the legisla24 tion, including time used for quorum calls and 


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1 voting, shall be counted against the total 30 

2 hours of consideration. 

3 ‘‘(D) CONSIDERATION IN CONFERENCE.— 

4 Immediately upon a final passage of the legisla5 tion that results in a disagreement between the 

6 two Houses of Congress with respect to the leg7 islation, conferees shall be appointed and a con8 ference convened. Not later than 15 days after 

9 the date on which conferees are appointed (ex10 cluding periods in which one or both Houses 

11 are in recess), the conferees shall file a report 

12 with the Senate and the House of Representa13 tives resolving the differences between the 

14 Houses on the legislation. Notwithstanding any 

15 other rule of the Senate or the House of Rep16 resentatives, it shall be in order to immediately 

17 consider a report of a committee of conference 

18 on the legislation filed in accordance with this 

19 subsection. Debate in the Senate and the House 

20 of Representatives on the conference report 

21 shall be limited to 10 hours, equally divided and 

22 controlled by the majority and minority leaders 

23 of the Senate or their designees and the Speak24 er of the House of Representatives and the mi25 nority leader of the House of Representatives or 


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1 their designees. A vote on final passage of the 

2 conference report shall occur immediately at the 

3 conclusion or yielding back of all time for de4 bate on the conference report. 

5 ‘‘(3) RULES OF THE SENATE AND HOUSE OF

6 REPRESENTATIVES.—This subsection and subsection 

7 (f)(2) are enacted by Congress— 

8 ‘‘(A) as an exercise of the rulemaking 

9 power of the Senate and House of Representa10 tives, respectively, and is deemed to be part of 

11 the rules of each House, respectively, but appli12 cable only with respect to the procedure to be 

13 followed in that House in the case of legislation 

14 under this section, and it supersedes other rules 

15 only to the extent that it is inconsistent with 

16 such rules; and 

17 ‘‘(B) with full recognition of the constitu18 tional right of either House to change the rules 

19 (so far as they relate to the procedure of that 

20 House) at any time, in the same manner, and 

21 to the same extent as in the case of any other 

22 rule of that House. 

23 ‘‘(e) IMPLEMENTATION OF PROPOSAL.— 

24 ‘‘(1) IN GENERAL.—Notwithstanding any other 

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1 vided in paragraph (3), implement the recommenda2 tions contained in a proposal submitted by the Com3 mission or the Secretary to Congress under this sec4 tion on August 15 of the year in which the proposal 

5 is so submitted. 

6 ‘‘(2) APPLICATION.— 

7 ‘‘(A) IN GENERAL.—A recommendation de8 scribed in paragraph (1) shall apply as follows: 

9 ‘‘(i) In the case of a recommendation 

10 that is a change in the payment rate for 

11 an item or service under Medicare in which 

12 payment rates change on a fiscal year 

13 basis (or a cost reporting period basis that 

14 relates to a fiscal year), on a calendar year 

15 basis (or a cost reporting period basis that 

16 relates to a calendar year), or on a rate 

17 year basis (or a cost reporting period basis 

18 that relates to a rate year), such rec19 ommendation shall apply to items and 

20 services furnished on the first day of the 

21 first fiscal year, calendar year, or rate year 

22 (as the case may be) that begins after such 

23 August 15. 

24 ‘‘(ii) In the case of a recommendation 

25 relating to payments to plans under parts 


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1 C and D, such recommendation shall apply 

2 to plan years beginning on the first day of 

3 the first calendar year that begins after 

4 such August 15. 

5 ‘‘(iii) In the case of any other rec6 ommendation, such recommendation shall 

7 be addressed in the regular regulatory 

8 process timeframe and shall apply as soon 

9 as practicable. 

10 ‘‘(B) INTERIM FINAL RULEMAKING.—The 

11 Secretary may use interim final rulemaking to 

12 implement any recommendation described in 

13 paragraph (1). 

14 ‘‘(3) EXCEPTION.—The Secretary shall not be 

15 required to implement the recommendations con16 tained in a proposal submitted in a proposal year by 

17 the Commission or the Secretary to Congress under 

18 this section if— 

19 ‘‘(A) prior to August 15 of the proposal 

20 year, Federal legislation is enacted that satis21 fies the requirements of subparagraphs (A), 

22 (B), and (C) of subsection (c)(2), and which 

23 may implement all, some, or none of the rec24 ommendations contained in the proposal; or 


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1 ‘‘(B) in the case of implementation year 

2 2020 and subsequent implementation years, a 

3 joint resolution described in subsection (f)(1) is 

4 enacted not later than August 15, 2017. 

5 ‘‘(4) NO AFFECT ON AUTHORITY TO IMPLE6 MENT CERTAIN PROVISIONS.—Nothing in paragraph 

7 (3) shall be construed to affect the authority of the 

8 Secretary to implement any recommendation con9 tained in a proposal or advisory report under this 

10 section to the extent that the Secretary otherwise 

11 has the authority to implement such recommenda12 tion administratively. 

13 ‘‘(5) LIMITATION ON REVIEW.—There shall be 

14 no administrative or judicial review under section 

15 1869, section 1878, or otherwise of the implementa16 tion by the Secretary under this subsection of the 

17 recommendations contained in a proposal. 

18 ‘‘(f) JOINT RESOLUTION REQUIRED TO DIS19 CONTINUE AUTOMATIC IMPLEMENTATION OF REC20 OMMENDATIONS IN PROPOSALS.— 

21 ‘‘(1) IN GENERAL.—For purposes of subsection 

22 (e)(3)(B), a joint resolution described in this para23 graph means only a joint resolution— 

24 ‘‘(A) that is introduced in 2017 by not 

25 later than February 1 of such year; 


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1 ‘‘(B) which does not have a preamble; 

2 ‘‘(C) the title of which is as follows: ‘Joint 

3 resolution approving the discontinuation of the 

4 process for consideration and automatic imple5 mentation of the biennial proposal of the Medi6 care Commission under section 1899A of the 

7 Social Security Act’; and 

8 ‘‘(D) the matter after the resolving clause 

9 of which is as follows: ‘That Congress approves 

10 the discontinuation of the process for consider11 ation and automatic implementation of the bi12 ennial proposal of the Medicare Commission 

13 under section 1899A of the Social Security 

14 Act.’. 

15 ‘‘(2) PROCEDURE.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), the procedures described in sub18 sections (b)(1), (c), (d), and (f) of section 802 

19 of title 5, United States Code, shall apply to the 

20 consideration of a joint resolution described in 

21 paragraph (1). 

22 ‘‘(B) TERMS AND EXCEPTIONS.—For pur23 poses of this subsection— 

24 ‘‘(i) the references to ‘subsection (a)’ 

25 in subsections (b)(1)(A), (c), (d), and (f) of 


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1 section 802 of that title shall be considered 

2 to refer to paragraph (1) of this sub3 section; and 

4 ‘‘(ii) the 20 calendar day period de5 scribed in section 802(c) shall be consid6 ered to refer to the period ending on the 

7 20th calendar day occurring after the date 

8 on which a resolution described in para9 graph (1) is introduced. 

10 ‘‘(C) EXCLUDED DAYS.—For purposes of 

11 determining the period specified in subpara12 graph (B), there shall be excluded any days ei13 ther House of Congress is adjourned for more 

14 than 3 days during a session of Congress. 

15 ‘‘(3) TERMINATION.—If a joint resolution de16 scribed in paragraph (1) is enacted not later than 

17 August 15, 2017— 

18 ‘‘(A) the Chief Actuary of the Medicare & 

19 Medicaid Services shall not make any deter20 minations under paragraph (4) after the date of 

21 the enactment of such joint resolution; 

22 ‘‘(B) the Commission shall not submit any 

23 proposals or advisory reports to Congress under 

24 this section after the date of the enactment of 

25 such joint resolution; and 


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1 ‘‘(C) the Commission and the consumer 

2 advisory council under subsection (k) shall ter3 minate 60 days after the date of the enactment 

4 of such joint resolution. 

5 ‘‘(g) COMMISSION MEMBERSHIP; TERMS OF OFFICE; 

6 CHAIRPERSON; REMOVAL.— 

7 ‘‘(1) MEMBERSHIP.— 

8 ‘‘(A) IN GENERAL.—The Commission shall 

9 be composed of— 

10 ‘‘(i) 15 members appointed by the 

11 President, by and with the advice and con12 sent of the Senate; and 

13 ‘‘(ii) the Secretary, the Administrator 

14 of the Center for Medicare & Medicaid 

15 Services, and the Administrator of the 

16 Health Resources and Services Administra17 tion, all of whom shall serve ex officio as 

18 nonvoting members of the Commission. 

19 ‘‘(B) QUALIFICATIONS.— 

20 ‘‘(i) IN GENERAL.—The appointed 

21 membership of the Commission shall in22 clude individuals with national recognition 

23 for their expertise in health finance and ec24 onomics, actuarial science, health facility 

25 management, health plans and integrated 


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1 delivery systems, reimbursement of health 

2 facilities, allopathic and osteopathic physi3 cians, and other providers of health serv4 ices, and other related fields, who provide 

5 a mix of different professionals, broad geo6 graphic representation, and a balance be7 tween urban and rural representatives. 

8 ‘‘(ii) INCLUSION.—The appointed 

9 membership of the Commission shall in10 clude (but not be limited to) physicians 

11 and other health professionals, experts in 

12 the area of pharmaco-economics or pre13 scription drug benefit programs, employ14 ers, third-party payers, individuals skilled 

15 in the conduct and interpretation of bio16 medical, health services, and health eco17 nomics research and expertise in outcomes 

18 and effectiveness research and technology 

19 assessment. Such membership shall also 

20 include representatives of consumers and 

21 the elderly. 

22 ‘‘(iii) MAJORITY NONPROVIDERS.—In23 dividuals who are directly involved in the 

24 provision or management of the delivery of 

25 items and services covered under this title 


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1 shall not constitute a majority of the ap2 pointed membership of the Commission. 

3 ‘‘(C) ETHICAL DISCLOSURE.—The Presi4 dent shall establish a system for public disclo5 sure by appointed members of the Commission 

6 of financial and other potential conflicts of in7 terest relating to such members. Appointed 

8 members of the Commission shall be treated as 

9 officers in the executive branch for purposes of 

10 applying title I of the Ethics in Government Act 

11 of 1978 (Public Law 95–521). 

12 ‘‘(D) CONFLICTS OF INTEREST.—No indi13 vidual may serve as an appointed member if 

14 that individual engages in any other business, 

15 vocation, or employment. 

16 ‘‘(E) CONSULTATION WITH CONGRESS.—In 

17 selecting individuals for nominations for ap18 pointments to the Commission, the President 

19 shall consult with— 

20 ‘‘(i) the majority leader of the Senate 

21 concerning the appointment of 3 members; 

22 ‘‘(ii) the Speaker of the House of 

23 Representatives concerning the appoint24 ment of 3 members; 


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1 ‘‘(iii) the minority leader of the Sen2 ate concerning the appointment of 3 mem3 bers; and 

4 ‘‘(iv) the minority leader of the House 

5 of Representatives concerning the appoint6 ment of 3 members. 

7 ‘‘(2) TERM OF OFFICE.—Each appointed mem8 ber shall hold office for a term of 6 years except 

9 that— 

10 ‘‘(A) a member appointed to fill a vacancy 

11 occurring prior to the expiration of the term for 

12 which that member’s predecessor was appointed 

13 shall be appointed for the remainder of such 

14 term; 

15 ‘‘(B) a member may continue to serve after 

16 the expiration of the member’s term until a suc17 cessor has taken office; and 

18 ‘‘(C) of the members first appointed under 

19 this section, 5 shall be appointed for a term of 

20 1 year, 5 shall be appointed for a term of 3 

21 years, and 5 shall be appointed for a term of 

22 6 years, the term of each to be designated by 

23 the President at the time of nomination. 

24 ‘‘(3) CHAIRPERSON.— 


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1 ‘‘(A) IN GENERAL.—The Chairperson shall 

2 be appointed by the President, by and with the 

3 advice and consent of the Senate, from among 

4 the members of the Commission. 

5 ‘‘(B) DUTIES.—The Chairperson shall be 

6 the principal executive officer of the Commis7 sion, and shall exercise all of the executive and 

8 administrative functions of the Commission, in9 cluding functions of the Commission with re10 spect to— 

11 ‘‘(i) the appointment and supervision 

12 of personnel employed by the Commission; 

13 ‘‘(ii) the distribution of business 

14 among personnel appointed and supervised 

15 by the Chairperson and among administra16 tive units of the Commission; and 

17 ‘‘(iii) the use and expenditure of 

18 funds. 

19 ‘‘(C) GOVERNANCE.—In carrying out any 

20 of the functions under subparagraph (B), the 

21 Chairperson shall be governed by the general 

22 policies established by the Commission and by 

23 the decisions, findings, and determinations the 

24 Commission shall by law be authorized to make. 


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1 ‘‘(D) REQUESTS FOR APPROPRIATIONS.— 

2 Requests or estimates for regular, supple3 mental, or deficiency appropriations on behalf 

4 of the Commission may not be submitted by the 

5 Chairperson without the prior approval of a ma6 jority vote of the Commission. 

7 ‘‘(4) REMOVAL.—Any appointed member may 

8 be removed by the President for neglect of duty or 

9 malfeasance in office, but for no other cause. 

10 ‘‘(h) VACANCIES; QUORUM; SEAL; VICE CHAIR11 PERSON; VOTING ON REPORTS.— 

12 ‘‘(1) VACANCIES.—No vacancy on the Commis13 sion shall impair the right of the remaining members 

14 to exercise all the powers of the Commission. 

15 ‘‘(2) QUORUM.—A majority of the appointed 

16 members of the Commission shall constitute a 

17 quorum for the transaction of business, but a lesser 

18 number of members may hold hearings. 

19 ‘‘(3) SEAL.—The Commission shall have an of20 ficial seal, of which judicial notice shall be taken. 

21 ‘‘(4) VICE CHAIRPERSON.—The Commission 

22 shall annually elect a Vice Chairperson to act in the 

23 absence or disability of the Chairperson or in case 

24 of a vacancy in the office of the Chairperson. 


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1 ‘‘(5) VOTING ON PROPOSALS.—Any proposal of 

2 the Commission must be approved by the majority 

3 of appointed members present. 

4 ‘‘(i) POWERS OF THE COMMISSION.— 

5 ‘‘(1) HEARINGS.—The Commission may hold 

6 such hearings, sit and act at such times and places, 

7 take such testimony, and receive such evidence as 

8 the Commission considers advisable to carry out this 

9 section. 

10 ‘‘(2) AUTHORITY TO INFORM RESEARCH PRIOR11 ITIES FOR DATA COLLECTION.—The Commission 

12 may advise the Secretary on priorities for health 

13 services research, particularly as such priorities per14 tain to necessary changes and issues regarding pay15 ment reforms under Medicare. 

16 ‘‘(3) OBTAINING OFFICIAL DATA.—The Com17 mission may secure directly from any department or 

18 agency of the United States information necessary 

19 to enable it to carry out this section. Upon request 

20 of the Chairperson, the head of that department or 

21 agency shall furnish that information to the Com22 mission on an agreed upon schedule. 

23 ‘‘(4) POSTAL SERVICES.—The Commission may 

24 use the United States mails in the same manner and 


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1 under the same conditions as other departments and 

2 agencies of the Federal Government. 

3 ‘‘(5) GIFTS.—The Commission may accept, use, 

4 and dispose of gifts or donations of services or prop5 erty. 

6 ‘‘(6) OFFICES.—The Commission shall main7 tain a principal office and such field offices as it de8 termines necessary, and may meet and exercise any 

9 of its powers at any other place. 

10 ‘‘(j) PERSONNEL MATTERS.— 

11 ‘‘(1) COMPENSATION OF MEMBERS AND CHAIR12 PERSON.—Each appointed member, other than the 

13 Chairperson, shall be compensated at a rate equal to 

14 the annual rate of basic pay prescribed for level III 

15 of the Executive Schedule under section 5315 of title 

16 5, United States Code. The Chairperson shall be 

17 compensated at a rate equal to the daily equivalent 

18 of the annual rate of basic pay prescribed for level 

19 II of the Executive Schedule under section 5315 of 

20 title 5, United States Code. 

21 ‘‘(2) TRAVEL EXPENSES.—The appointed mem22 bers shall be allowed travel expenses, including per 

23 diem in lieu of subsistence, at rates authorized for 

24 employees of agencies under subchapter I of chapter 

25 57 of title 5, United States Code, while away from 


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1 their homes or regular places of business in the per2 formance of services for the Commission. 

3 ‘‘(3) STAFF.— 

4 ‘‘(A) IN GENERAL.—The Chairperson may, 

5 without regard to the civil service laws and reg6 ulations, appoint and terminate an executive di7 rector and such other additional personnel as 

8 may be necessary to enable the Commission to 

9 perform its duties. The employment of an exec10 utive director shall be subject to confirmation 

11 by the Commission. 

12 ‘‘(B) COMPENSATION.—The Chairperson 

13 may fix the compensation of the executive direc14 tor and other personnel without regard to chap15 ter 51 and subchapter III of chapter 53 of title 

16 5, United States Code, relating to classification 

17 of positions and General Schedule pay rates, ex18 cept that the rate of pay for the executive direc19 tor and other personnel may not exceed the rate 

20 payable for level V of the Executive Schedule 

21 under section 5316 of such title. 

22 ‘‘(4) DETAIL OF GOVERNMENT EMPLOYEES.— 

23 Any Federal Government employee may be detailed 

24 to the Commission without reimbursement, and such 


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1 detail shall be without interruption or loss of civil 

2 service status or privilege. 

3 ‘‘(5) PROCUREMENT OF TEMPORARY AND

4 INTERMITTENT SERVICES.—The Chairperson may 

5 procure temporary and intermittent services under 

6 section 3109(b) of title 5, United States Code, at 

7 rates for individuals which do not exceed the daily 

8 equivalent of the annual rate of basic pay prescribed 

9 for level V of the Executive Schedule under section 

10 5316 of such title. 

11 ‘‘(k) CONSUMER ADVISORY COUNCIL.— 

12 ‘‘(1) IN GENERAL.—There is established a con13 sumer advisory council to advise the Commission on 

14 the impact of payment policies under this title on 

15 consumers. 

16 ‘‘(2) MEMBERSHIP.— 

17 ‘‘(A) NUMBER AND APPOINTMENT.—The 

18 consumer advisory council shall be composed of 

19 10 consumer representatives appointed by the 

20 Comptroller General of the United States, 1 

21 from among each of the 10 regions established 

22 by the Secretary as of the date of enactment of 

23 this section. 


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1 ‘‘(B) QUALIFICATIONS.—The membership 

2 of the council shall represent the interests of 

3 consumers and particular communities. 

4 ‘‘(3) DUTIES.—The consumer advisory council 

5 shall, subject to the call of the Commission, meet 

6 not less frequently than 2 times each year in the 

7 District of Columbia. 

8 ‘‘(4) OPEN MEETINGS.—Meetings of the con9 sumer advisory council shall be open to the public. 

10 ‘‘(5) ELECTION OF OFFICERS.—Members of the 

11 consumer advisory council shall elect their own offi12 cers. 

13 ‘‘(6) APPLICATION OF FACA.—The Federal Ad14 visory Committee Act (5 U.S.C. App.) shall apply to 

15 the consumer advisory council except that section 14 

16 of such Act shall not apply. 

17 ‘‘(l) DEFINITIONS.—In this section: 

18 ‘‘(1) APPROPRIATE COMMITTEES OF CON19 GRESS.—The term ‘appropriate committees of Con20 gress’ means the Committee on Ways and Means 

21 and the Committee on Energy and Commerce of the 

22 House of Representatives and the Committee on Fi23 nance of the Senate. 

24 ‘‘(2) COMMISSION; CHAIRPERSON; MEMBER.— 

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1 ber’ mean the Medicare Commission established 

2 under subsection (a) and the Chairperson and any 

3 Member thereof, respectively. 

4 ‘‘(3) MEDICARE.—The term ‘Medicare’ means 

5 the program established under this title, including 

6 parts A, B, C, and D. 

7 ‘‘(4) MEDICARE BENEFICIARY.—The term 

8 ‘Medicare beneficiary’ means an individual who is 

9 entitled to, or enrolled for, benefits under part A or 

10 enrolled for benefits under part B. 

11 ‘‘(5) MEDICARE PROGRAM SPENDING.—The 

12 term ‘Medicare program spending’ means program 

13 spending under parts A, B, and D net of premiums. 

14 ‘‘(m) FUNDING.— 

15 ‘‘(1) IN GENERAL.—There are appropriated to 

16 the Commission to carry out its duties and func17 tions— 

18 ‘‘(A) for fiscal year 2012, $15,000,000; 

19 and 

20 ‘‘(B) for each subsequent fiscal year, the 

21 amount appropriated under this paragraph for 

22 the previous fiscal year increased by the annual 

23 percentage increase in the Consumer Price 

24 Index for All Urban Consumers (all items; 


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1 United States city average) as of June of the 

2 previous fiscal year. 

3 ‘‘(2) FROM TRUST FUNDS.—Sixty percent of 

4 amounts appropriated under paragraph (1) shall be 

5 derived by transfer from the Federal Hospital Insur6 ance Trust Fund under section 1817 and 40 percent 

7 of amounts appropriated under such paragraph shall 

8 be derived by transfer from the Federal Supple9 mentary Medical Insurance Trust Fund under sec10 tion 1841.’’. 

11 (2) LOBBYING COOLING-OFF PERIOD FOR MEM12 BERS OF THE MEDICARE COMMISSION.—Section 

13 207(c) of title 18, United States Code, is amended 

14 by inserting at the end the following: 

15 ‘‘(3) MEMBERS OF THE MEDICARE COMMIS16 SION.— 

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

18 apply to a member of the Medicare Commission 

19 under section 1899A. 

20 ‘‘(B) AGENCIES AND CONGRESS.—For pur21 poses of paragraph (1), the agency in which the 

22 individual described in subparagraph (A) served 

23 shall be considered to be the Medicare Commis24 sion, the Department of Health and Human 

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1 diction of Congress, including the Committee on 

2 Ways and Means and the Committee on Energy 

3 and Commerce of the House of Representatives 

4 and the Committee on Finance of the Senate.’’. 

5 (b) GAO STUDY AND REPORT ON DETERMINATION

6 AND IMPLEMENTATION OF PAYMENT AND COVERAGE

7 POLICIES UNDER THE MEDICARE PROGRAM.— 

8 (1) INITIAL STUDY AND REPORT.— 

9 (A) STUDY.—The Comptroller General of 

10 the United States (in this section referred to as 

11 the ‘‘Comptroller General’’) shall conduct a 

12 study on changes to payment policies, meth13 odologies, and rates and coverage policies and 

14 methodologies under the Medicare program 

15 under title XVIII of the Social Security Act as 

16 a result of the recommendations contained in 

17 the proposals made by the Medicare Commis18 sion under section 1899A of such Act (as added 

19 by subsection (a)), including an analysis of the 

20 effect of such recommendations on— 

21 (i) Medicare beneficiary access to pro22 viders and items and services; 

23 (ii) the affordability of Medicare pre24 miums and cost-sharing (including 

25 deductibles, coinsurance, and copayments); 


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1 (iii) the potential impact of changes 

2 on other government or private-sector pur3 chasers and payers of care; and 

4 (iv) quality of patient care, including 

5 patient experience, outcomes, and other 

6 measures of care. 

7 (B) REPORT.—Not later than July 1, 

8 2015, the Comptroller General shall submit to 

9 Congress a report containing the results of the 

10 study conducted under subparagraph (A), to11 gether with recommendations for such legisla12 tion and administrative action as the Comp13 troller General determines appropriate. 

14 (2) SUBSEQUENT STUDIES AND REPORTS.—The 

15 Comptroller General shall periodically conduct such 

16 additional studies and submit reports to Congress on 

17 changes to Medicare payments policies, methodolo18 gies, and rates and coverage policies and methodolo19 gies as the Comptroller General determines appro20 priate, in consultation with the appropriate commit21 tees of jurisdiction of Congress. 

22 (c) CONFORMING AMENDMENTS.—Section 1805(b) 

23 of the Social Security Act (42 U.S.C. 1395b–6(b)) is 

24 amended— 


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1 (1) by redesignating paragraphs (4) through 

2 (8) as paragraphs (5) through (9), respectively; and 

3 (2) by inserting after paragraph (3) the fol4 lowing: 

5 ‘‘(4) REVIEW AND COMMENT ON MEDICARE

6 COMMISSION OR SECRETARIAL PROPOSAL.—If the 

7 Medicare Commission (as established under sub8 section (a) of section 1899A) or the Secretary sub9 mits a proposal to the Commission under such sec10 tion in a year, the Commission shall review the pro11 posal and, not later than February 1 of that year, 

12 submit to the appropriate committees of Congress 

13 written comments on such proposal. Such comments 

14 may include such recommendations as the Commis15 sion deems appropriate.’’. 

16 SEC. 3404. ENSURING MEDICARE SAVINGS ARE KEPT IN 

17 THE MEDICARE PROGRAM. 

18 No reduction in outlays under the Medicare program 

19 under title XVIII of the Social Security Act under the pro20 visions of and amendments made by this Act may be uti21 lized to offset any outlays under any other program or 

22 activity of the Federal government. 


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1 Subtitle F—Comparative 

2 Effectiveness Research 

3 SEC. 3501. COMPARATIVE EFFECTIVENESS RESEARCH. 

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

5 (42 U.S.C. 1301 et seq.) is amended by adding at the end 

6 the following new part: 

7 ‘‘PART D—COMPARATIVE EFFECTIVENESS RESEARCH

8 ‘‘COMPARATIVE EFFECTIVENESS RESEARCH

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

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

11 Board of Governors established under subsection (f). 

12 ‘‘(2) COMPARATIVE CLINICAL EFFECTIVENESS

13 RESEARCH.— 

14 ‘‘(A) IN GENERAL.—The term ‘compara15 tive clinical effectiveness research’ means re16 search evaluating and comparing the clinical ef17 fectiveness, risks, and benefits of 2 or more 

18 medical treatments, services, and items de19 scribed in subparagraph (B). 

20 ‘‘(B) MEDICAL TREATMENTS, SERVICES, 

21 AND ITEMS DESCRIBED.—The medical treat22 ments, services, and items described in this sub23 paragraph are health care interventions, proto24 cols for treatment, care management, and deliv25 ery, procedures, medical devices, diagnostic 


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1 tools, pharmaceuticals (including drugs and 

2 biologicals), and any other strategies or items 

3 being used in the treatment, management, and 

4 diagnosis of, or prevention of illness or injury 

5 in, patients. 

6 ‘‘(3) COMPARATIVE EFFECTIVENESS RE7 SEARCH.—The term ‘comparative effectiveness re8 search’ means research evaluating and comparing 

9 the implications and outcomes of 2 or more health 

10 care strategies to address a particular medical condi11 tion for specific patient populations. 

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

13 ‘conflicts of interest’ means associations, including 

14 financial and personal, that may be reasonably as15 sumed to have the potential to bias an individual’s 

16 decisions in matters related to the Institute or the 

17 conduct of activities under this section. 

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

19 the ‘Patient-Centered Outcomes Research Institute’ 

20 established under subsection (b)(1). 

21 ‘‘(b) PATIENT-CENTERED OUTCOMES RESEARCH IN22 STITUTE.— 

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

24 be established a nonprofit corporation, to be known 

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1 tute’ which is neither an agency nor establishment 

2 of the United States Government. 

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

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

6 District of Columbia Nonprofit Corporation Act. 

7 ‘‘(3) FUNDING OF COMPARATIVE EFFECTIVE8 NESS RESEARCH.—For fiscal year 2010 and each 

9 subsequent fiscal year, amounts in the Patient-Cen10 tered Outcomes Research Trust Fund (referred to in 

11 this section as the ‘PCORTF’) under section 9511 

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

14 to carry out this section. 

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

16 assist patients, clinicians, purchasers, and policy-makers 

17 in making informed health decisions by advancing the 

18 quality and relevance of evidence concerning the manner 

19 in which diseases, disorders, and other health conditions 

20 can effectively and appropriately be prevented, diagnosed, 

21 treated, monitored, and managed through research and 

22 evidence synthesis that considers variations in patient sub23 populations, and the dissemination of research findings 

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1 tiveness, and appropriateness of the medical treatments, 

2 services, and items described in subsection (a)(2)(B). 

3 ‘‘(d) DUTIES.— 

4 ‘‘(1) IDENTIFYING RESEARCH PRIORITIES AND

5 ESTABLISHING RESEARCH PROJECT AGENDA.— 

6 ‘‘(A) IDENTIFYING RESEARCH PRIOR7 ITIES.—The Institute shall identify national 

8 priorities for comparative clinical effectiveness 

9 research, taking into account factors, includ10 ing— 

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

12 burden in the United States; 

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

14 outcomes; 

15 ‘‘(iii) practice variations, including 

16 variations in delivery and outcomes by ge17 ography, treatment site, provider type, and 

18 patient subgroup; 

19 ‘‘(iv) the potential for new evidence 

20 concerning certain categories of health care 

21 services or treatments to improve patient 

22 health and well-being and the quality of 

23 care; 

24 ‘‘(v) the effect or potential for an ef25 fect on health expenditures associated with 


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1 a health condition or the use of a par2 ticular medical treatment, service, or item; 

3 ‘‘(vi) the effect or potential for an ef4 fect on patient needs, outcomes, and pref5 erences, including quality of life; and 

6 ‘‘(vii) the relevance to assisting pa7 tients and clinicians in making informed 

8 health decisions. 

9 ‘‘(B) ESTABLISHING RESEARCH PROJECT

10 AGENDA.— 

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

12 establish and update a research project 

13 agenda for comparative clinical effective14 ness research to address the priorities 

15 identified under subparagraph (A), taking 

16 into consideration the types of such re17 search that might address each priority 

18 and the relative value (determined based 

19 on the cost of conducting such research 

20 compared to the potential usefulness of the 

21 information produced by such research) as22 sociated with the different types of re23 search, and such other factors as the Insti24 tute determines appropriate. 


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1 ‘‘(ii) CONSIDERATION OF NEED TO

2 CONDUCT A SYSTEMATIC REVIEW.—In es3 tablishing and updating the research 

4 project agenda under clause (i), the Insti5 tute shall consider the need to conduct a 

6 systematic review of existing research be7 fore providing for the conduct of new re8 search under paragraph (2)(A). 

9 ‘‘(2) CARRYING OUT RESEARCH PROJECT AGEN10 DA.— 

11 ‘‘(A) COMPARATIVE CLINICAL EFFECTIVE12 NESS RESEARCH.—In carrying out the research 

13 project agenda established under paragraph 

14 (1)(B), the Institute shall provide for the con15 duct of appropriate research and the synthesis 

16 of evidence, in accordance with the methodo17 logical standards adopted under paragraph 

18 (10), using methods, including the following: 

19 ‘‘(i) Systematic reviews and assess20 ments of existing research and evidence. 

21 ‘‘(ii) Primary research, such as ran22 domized clinical trials, molecularly in23 formed trials, and observational studies. 

24 ‘‘(iii) Any other methodologies rec25 ommended by the methodology committee 


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1 established under paragraph (7) that are 

2 adopted by the Board under paragraph 

3 (10). 

4 ‘‘(B) CONTRACTS FOR THE MANAGEMENT

5 AND CONDUCT OF RESEARCH.— 

6 ‘‘(i) IN GENERAL.—The Institute may 

7 enter into contracts for the management 

8 and conduct of research in accordance with 

9 the research project agenda established 

10 under paragraph (1)(B) with the following: 

11 ‘‘(I) Agencies and instrumental12 ities of the Federal Government that 

13 have experience in conducting com14 parative clinical effectiveness research, 

15 such as the Agency for Healthcare 

16 Research and Quality, to the extent 

17 that such contracts are authorized 

18 under the governing statutes of such 

19 agencies and instrumentalities. 

20 ‘‘(II) Appropriate private sector 

21 research or study-conducting entities 

22 that have demonstrated the experience 

23 and capacity to achieve the goals of 

24 comparative effectiveness research. 


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1 ‘‘(ii) CONDITIONS FOR CONTRACTS.— 

2 A contract entered into under this sub3 paragraph shall require that the agency, 

4 instrumentality, or other entity— 

5 ‘‘(I) abide by the transparency 

6 and conflicts of interest requirements 

7 that apply to the Institute with re8 spect to the research managed or con9 ducted under such contract; 

10 ‘‘(II) comply with the methodo11 logical standards adopted under para12 graph (10) with respect to such re13 search; 

14 ‘‘(III) take into consideration 

15 public comments on the study design 

16 that are transmitted by the Institute 

17 to the agency, instrumentality, or 

18 other entity under subsection 

19 (i)(1)(B) during the finalization of the 

20 study design and transmit responses 

21 to such comments to the Institute, 

22 which will publish such comments, re23 sponses, and finalized study design in 

24 accordance with subsection 


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1 (i)(3)(A)(iii) prior to the conduct of 

2 such research; 

3 ‘‘(IV) in the case where the agen4 cy, instrumentality, or other entity is 

5 managing or conducting a compara6 tive effectiveness research study for a 

7 rare disease, consult with the expert 

8 advisory panel for rare disease ap9 pointed under paragraph (5)(A)(iii) 

10 with respect to such research study; 

11 and 

12 ‘‘(V) subject to clause (iv), per13 mit a researcher who conducts origi14 nal research under the contract for 

15 the agency, instrumentality, or other 

16 entity to have such research published 

17 in a peer-reviewed journal or other 

18 publication. 

19 ‘‘(iii) COVERAGE OF COPAYMENTS OR

20 COINSURANCE.—A contract entered into 

21 under this subparagraph may allow for the 

22 coverage of copayments or coinsurance, or 

23 allow for other appropriate measures, to 

24 the extent that such coverage or other 

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1 lidity of a research project, such as in the 

2 case where the research project must be 

3 blinded. 

4 ‘‘(iv) REQUIREMENTS FOR PUBLICA5 TION OF RESEARCH.— 

6 ‘‘(I) IN GENERAL.—Any research 

7 published under clause (ii)(V) shall be 

8 within the bounds of and entirely con9 sistent with the evidence and findings 

10 produced under the contract with the 

11 Institute under this subparagraph and 

12 disseminated by the Institute under 

13 paragraph (9). 

14 ‘‘(II) LIMITATION ON CON15 TRACTING WITH CERTAIN AGENCIES, 

16 INSTRUMENTALITIES, AND ENTI17 TIES.—In the case where the Institute 

18 determines that such published re19 search does not meet the requirements 

20 under subclause (I), the Institute 

21 shall not enter into another contract 

22 with the agency, instrumentality, or 

23 entity which managed or conducted 

24 such research under a contract under 

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1 mined appropriate by the Institute 

2 (but not less than 5 years). 

3 ‘‘(C) REVIEW AND UPDATE OF EVI4 DENCE.—The Institute shall review and update 

5 evidence on a periodic basis, in order to take 

6 into account new research, evolving evidence, 

7 advances in medical technology, and changes in 

8 the standard of care as they become available, 

9 as appropriate. 

10 ‘‘(D) TAKING INTO ACCOUNT POTENTIAL

11 DIFFERENCES.—Research shall— 

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

13 take into account the potential for dif14 ferences in the effectiveness of health care 

15 treatments, services, and items as used 

16 with various subpopulations, such as racial 

17 and ethnic minorities, women, age, and 

18 groups of individuals with different 

19 comorbidities, genetic and molecular sub20 types, or quality of life preferences; and 

21 ‘‘(ii) include members of such sub22 populations as subjects in the research as 

23 feasible and appropriate. 

24 ‘‘(E) DIFFERENCES IN TREATMENT MO25 DALITIES.—Research shall be designed, as apVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01139 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 propriate, to take into account different charac2 teristics of treatment modalities that may affect 

3 research outcomes, such as the phase of the 

4 treatment modality in the innovation cycle and 

5 the impact of the skill of the operator of the 

6 treatment modality. 

7 ‘‘(3) STUDY AND REPORT ON FEASIBILITY OF

8 CONDUCTING RESEARCH IN-HOUSE.— 

9 ‘‘(A) STUDY.—The Institute shall conduct 

10 a study on the feasibility of conducting research 

11 in-house. 

12 ‘‘(B) REPORT.—Not later than 5 years 

13 after the date of enactment of this section, the 

14 Institute shall submit a report to Congress con15 taining the results of the study conducted under 

16 subparagraph (A). 

17 ‘‘(4) DATA COLLECTION.— 

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

19 with appropriate safeguards for privacy, make 

20 available to the Institute such data collected by 

21 the Centers for Medicare & Medicaid Services 

22 under the programs under titles XVIII, XIX, 

23 and XXI as the Institute may require to carry 

24 out this section. The Institute may also request 

25 and, if such request is granted, obtain data 


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1 from Federal, State, or private entities, includ2 ing data from clinical databases and registries. 

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

4 only use data provided to the Institute under 

5 subparagraph (A) in accordance with laws and 

6 regulations governing the release and use of 

7 such data, including applicable confidentiality 

8 and privacy standards. 

9 ‘‘(5) APPOINTING EXPERT ADVISORY PANELS.— 

10 ‘‘(A) APPOINTMENT.— 

11 ‘‘(i) IN GENERAL.—The Institute 

12 shall, as appropriate, appoint expert advi13 sory panels to assist in identifying research 

14 priorities and establishing the research 

15 project agenda under paragraph (1). Pan16 els shall advise the Institute in matters 

17 such as identifying gaps in and updating 

18 medical evidence in order to ensure that 

19 the information produced from such re20 search is clinically relevant to decisions 

21 made by clinicians and patients at the 

22 point of care. 

23 ‘‘(ii) EXPERT ADVISORY PANELS FOR

24 PRIMARY RESEARCH.—The Institute shall 

25 appoint expert advisory panels in carrying 


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1 out the research project agenda under 

2 paragraph (2)(A)(ii). Such expert advisory 

3 panels shall, upon request, advise the Insti4 tute and the agency, instrumentality, or 

5 entity conducting the research on the re6 search question involved and the research 

7 design or protocol, including the appro8 priate comparator technologies, important 

9 patient subgroups, and other parameters of 

10 the research, as necessary. Upon the re11 quest of such agency, instrumentality, or 

12 entity, such panels shall be available as a 

13 resource for technical questions that may 

14 arise during the conduct of such research. 

15 ‘‘(iii) EXPERT ADVISORY PANEL FOR

16 RARE DISEASE.—In the case of a compara17 tive effectiveness research study for rare 

18 disease, the Institute shall appoint an ex19 pert advisory panel for purposes of assist20 ing in the design of such research study 

21 and determining the relative value and fea22 sibility of conducting such research study. 

23 ‘‘(B) COMPOSITION.— 

24 ‘‘(i) IN GENERAL.—An expert advi25 sory panel appointed under subparagraph 


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1 (A) shall include individuals who have ex2 perience in the relevant topic, project, or 

3 category for which the panel is established, 

4 including— 

5 ‘‘(I) practicing and research clini6 cians (including relevant specialists 

7 and subspecialists), patients, and rep8 resentatives of patients; and 

9 ‘‘(II) experts in scientific and 

10 health services research, health serv11 ices delivery, and evidence-based medi12 cine. 

13 ‘‘(ii) INCLUSION OF REPRESENTA14 TIVES OF MANUFACTURERS OF MEDICAL

15 TECHNOLOGY.—An expert advisory panel 

16 appointed under subparagraph (A) may in17 clude a representative of each manufac18 turer of each medical technology that is in19 cluded under the relevant topic, project, or 

20 category for which the panel is established. 

21 ‘‘(6) SUPPORTING PATIENT AND CONSUMER

22 REPRESENTATIVES.—The Institute shall provide 

23 support and resources to help patient and consumer 

24 representatives on the Board and expert advisory 

25 panels appointed by the Institute under paragraph 


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1 (5) to effectively participate in technical discussions 

2 regarding complex research topics. Such support 

3 shall include initial and continuing education to fa4 cilitate effective engagement in activities undertaken 

5 by the Institute and may include regular and ongo6 ing opportunities for patient and consumer rep7 resentatives to interact with each other and to ex8 change information and support regarding their in9 volvement in the Institute’s activities. The Institute 

10 shall provide per diem and other appropriate com11 pensation to patient and consumer representatives 

12 for their time spent participating in the activities of 

13 the Institute under this paragraph. 

14 ‘‘(7) ESTABLISHING METHODOLOGY COM15 MITTEE.— 

16 ‘‘(A) IN GENERAL.—The Institute shall es17 tablish a standing methodology committee to 

18 carry out the functions described in subpara19 graph (C). 

20 ‘‘(B) APPOINTMENT AND COMPOSITION.— 

21 The methodology committee established under 

22 subparagraph (A) shall be composed of not 

23 more than 17 members appointed by the Comp24 troller General of the United States. Members 

25 appointed to the methodology committee shall 


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1 be experts in their scientific field, such as 

2 health services research, clinical research, com3 parative effectiveness research, biostatistics, 

4 genomics, and research methodologies. Stake5 holders with such expertise may be appointed to 

6 the methodology committee. 

7 ‘‘(C) FUNCTIONS.—Subject to subpara8 graph (D), the methodology committee shall 

9 work to develop and improve the science and 

10 methods of comparative effectiveness research 

11 by undertaking, directly or through subcontract, 

12 the following activities: 

13 ‘‘(i) Not later than 2 years after the 

14 date on which the members of the method15 ology committee are appointed under sub16 paragraph (B), developing and periodically 

17 updating the following: 

18 ‘‘(I) Establish and maintain 

19 methodological standards for com20 parative clinical effectiveness research 

21 on major categories of interventions to 

22 prevent, diagnose, or treat a clinical 

23 condition or improve the delivery of 

24 care. Such methodological standards 

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1 nal validity, generalizability, feasi2 bility, and timeliness of such research 

3 and for clinical outcomes measures, 

4 risk adjustment, and other relevant 

5 aspects of research and assessment 

6 with respect to the design of such re7 search. Any methodological standards 

8 developed and updated under this sub9 clause shall be scientifically based and 

10 include methods by which new infor11 mation, data, or advances in tech12 nology are considered and incor13 porated into ongoing research projects 

14 by the Institute, as appropriate. The 

15 process for developing and updating 

16 such standards shall include input 

17 from relevant experts, stakeholders, 

18 and decisionmakers, and shall provide 

19 opportunities for public comment. 

20 Such standards shall also include 

21 methods by which patient subpopula22 tions can be accounted for and evalu23 ated in different types of research. As 

24 appropriate, such standards shall 

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1 logical standards for defined cat2 egories of health interventions and for 

3 each of the major categories of com4 parative effectiveness research meth5 ods (determined as of the date of en6 actment of the America’s Healthy Fu7 ture Act of 2009). 

8 ‘‘(II) A translation table that is 

9 designed to provide guidance and act 

10 as a reference for the Board to deter11 mine research methods that are most 

12 likely to address each specific com13 parative clinical effectiveness research 

14 question. 

15 ‘‘(ii) Not later than 3 years after such 

16 date, examining the following: 

17 ‘‘(I) Methods by which various 

18 aspects of the health care delivery sys19 tem (such as benefit design and per20 formance, and health services organi21 zation, management, information com22 munication, and delivery) could be as23 sessed and compared for their relative 

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1 tages, and disadvantages in a scientif2 ically valid and standardized way. 

3 ‘‘(II) Methods by which efficiency 

4 and value (including the full range of 

5 harms and benefits, such as quality of 

6 life) could be assessed in a scientif7 ically valid and standardized way. 

8 ‘‘(D) CONSULTATION AND CONDUCT OF

9 EXAMINATIONS.— 

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

11 (iii), in undertaking the activities described 

12 in subparagraph (C), the methodology 

13 committee shall— 

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

15 more of the entities described in 

16 clause (ii); and 

17 ‘‘(II) consult with stakeholders 

18 and other entities knowledgeable in 

19 relevant fields, as appropriate. 

20 ‘‘(ii) ENTITIES DESCRIBED.—The fol21 lowing entities are described in this clause: 

22 ‘‘(I) The Institute of Medicine of 

23 the National Academies. 

24 ‘‘(II) The Agency for Healthcare 

25 Research and Quality. 


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1 ‘‘(III) The National Institutes of 

2 Health. 

3 ‘‘(IV) Academic, non-profit, or 

4 other private entities with relevant ex5 pertise. 

6 ‘‘(iii) CONDUCT OF EXAMINATIONS.— 

7 The methodology committee shall contract 

8 with the Institute of Medicine of the Na9 tional Academies for the conduct of the ex10 aminations described in subclauses (I) and 

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

12 ‘‘(E) REPORTS.—The methodology com13 mittee shall submit reports to the Board on the 

14 committee’s performance of the functions de15 scribed in subparagraph (C). Reports submitted 

16 under the preceding sentence with respect to 

17 the functions described in clause (i) of such 

18 subparagraph shall contain recommendations— 

19 ‘‘(i) for the Institute to adopt meth20 odological standards developed and up21 dated by the methodology committee under 

22 such subparagraph; and 

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

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1 essary to comply with such methodological 

2 standards. 

3 ‘‘(8) PROVIDING FOR A PEER-REVIEW PROCESS

4 FOR PRIMARY RESEARCH.— 

5 ‘‘(A) IN GENERAL.—The Institute shall en6 sure that there is a process for peer review of 

7 the research conducted under paragraph 

8 (2)(A)(ii). Under such process— 

9 ‘‘(i) evidence from research conducted 

10 under such paragraph shall be reviewed to 

11 assess scientific integrity and adherence to 

12 methodological standards adopted under 

13 paragraph (10); and 

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

15 contributing to any peer-review process 

16 during the preceding year or years shall be 

17 made public and included in annual reports 

18 in accordance with paragraph (12)(D). 

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

20 process shall be designed in a manner so as to 

21 avoid bias and conflicts of interest on the part 

22 of the reviewers and shall be composed of ex23 perts in the scientific field relevant to the re24 search under review. 

25 ‘‘(C) USE OF EXISTING PROCESSES.— 


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1 ‘‘(i) PROCESSES OF ANOTHER ENTI2 TY.—In the case where the Institute enters 

3 into a contract or other agreement with 

4 another entity for the conduct or manage5 ment of research under this section, the 

6 Institute may utilize the peer-review proc7 ess of such entity if such process meets the 

8 requirements under subparagraphs (A) and 

9 (B). 

10 ‘‘(ii) PROCESSES OF APPROPRIATE

11 MEDICAL JOURNALS.—The Institute may 

12 utilize the peer-review process of appro13 priate medical journals if such process 

14 meets the requirements under subpara15 graphs (A) and (B). 

16 ‘‘(9) DISSEMINATION OF RESEARCH FIND17 INGS.— 

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

19 disseminate research findings to clinicians, pa20 tients, and the general public in accordance 

21 with the dissemination protocols and strategies 

22 adopted under paragraph (10). Research find23 ings disseminated— 

24 ‘‘(i) shall convey findings of research 

25 so that they are comprehensible and useful 


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1 to patients and providers in making health 

2 care decisions; 

3 ‘‘(ii) shall discuss findings and other 

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

6 comorbidities, as appropriate; 

7 ‘‘(iii) shall include considerations such 

8 as limitations of research and what further 

9 research may be needed, as appropriate; 

10 ‘‘(iv) shall not include practice guide11 lines, coverage recommendations, or policy 

12 recommendations; and 

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

14 dissemination of which would violate the 

15 privacy of research participants or violate 

16 any confidentiality agreements made with 

17 respect to the use of data under this sec18 tion. 

19 ‘‘(B) DISSEMINATION PROTOCOLS AND

20 STRATEGIES.—The Institute shall develop pro21 tocols and strategies for the appropriate dis22 semination of research findings in order to en23 sure effective communication of such findings 

24 and the use and incorporation of such findings 

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1 forming higher quality and more effective and 

2 timely decisions regarding medical treatments, 

3 services, and items. In developing and adopting 

4 such protocols and strategies, the Institute shall 

5 consult with stakeholders, including practicing 

6 clinicians and patients, concerning the types of 

7 dissemination that will be most useful to the 

8 end users of the information and may provide 

9 for the utilization of multiple formats for con10 veying findings to different audiences. 

11 ‘‘(C) DEFINITION OF RESEARCH FIND12 INGS.—In this paragraph, the term ‘research 

13 findings’ means the results of a study or assess14 ment. 

15 ‘‘(10) ADOPTION.—Subject to subsection 

16 (i)(1)(A)(i), the Institute shall adopt the national 

17 priorities identified under paragraph (1)(A), the re18 search project agenda established under paragraph 

19 (1)(B), the methodological standards developed and 

20 updated by the methodology committee under para21 graph (7)(C)(i), any peer-review process provided 

22 under paragraph (8), and dissemination protocols 

23 and strategies developed under paragraph (9)(B) by 

24 majority vote. In the case where the Institute does 

25 not adopt such national priorities, research project 


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1 agenda, methodological standards, peer-review proc2 ess, or dissemination protocols and strategies in ac3 cordance with the preceding sentence, the national 

4 priorities, research project agenda, methodological 

5 standards, peer-review process, or dissemination pro6 tocols and strategies shall be referred to the appro7 priate staff or entity within the Institute (or, in the 

8 case of the methodological standards, the method9 ology committee) for further review. 

10 ‘‘(11) COORDINATION OF RESEARCH AND RE11 SOURCES AND BUILDING CAPACITY FOR RE12 SEARCH.— 

13 ‘‘(A) COORDINATION OF RESEARCH AND

14 RESOURCES.—The Institute shall coordinate re15 search conducted, commissioned, or otherwise 

16 funded under this section with comparative clin17 ical effectiveness and other relevant research 

18 and related efforts conducted by public and pri19 vate agencies and organizations in order to en20 sure the most efficient use of the Institute’s re21 sources and that research is not duplicated un22 necessarily. 

23 ‘‘(B) BUILDING CAPACITY FOR RE24 SEARCH.—The Institute may build capacity for 

25 comparative clinical effectiveness research and 


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1 methodologies, including research training and 

2 development of data resources (such as clinical 

3 registries), through appropriate activities, in4 cluding using up to 20 percent of the amounts 

5 appropriated or credited to the PCORTF under 

6 section 9511(b) of the Internal Revenue Code 

7 of 1986 with respect to a fiscal year to fund ex8 tramural efforts of organizations such as the 

9 Cochrane Collaboration (or a successor organi10 zation) and other organizations (including pub11 lic-private partnerships) in order to develop and 

12 maintain a comprehensive, interoperable data 

13 network to collect, link, and analyze data on 

14 outcomes and effectiveness from multiple 

15 sources, including electronic health records. 

16 ‘‘(C) INCLUSION IN ANNUAL REPORTS.— 

17 The Institute shall report on any coordination 

18 and capacity building conducted under this 

19 paragraph in annual reports in accordance with 

20 paragraph (12)(E). 

21 ‘‘(12) ANNUAL REPORTS.—The Institute shall 

22 submit an annual report to Congress and the Presi23 dent, and shall make the annual report available to 

24 the public. Such report shall contain— 


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1 ‘‘(A) a description of the activities con2 ducted under this section during the preceding 

3 year, including the use of amounts appropriated 

4 or credited to the PCORTF under section 

5 9511(b) of the Internal Revenue Code of 1986 

6 to carry out this section, research projects com7 pleted and underway, and a summary of the 

8 findings of such projects; 

9 ‘‘(B) the research project agenda and 

10 budget of the Institute for the following year; 

11 ‘‘(C) a description of research priorities 

12 identified under paragraph (1)(A), dissemina13 tion protocols and strategies developed by the 

14 Institute under paragraph (9)(B), and meth15 odological standards developed and updated by 

16 the methodology committee under paragraph 

17 (7)(C)(i) that are adopted under paragraph 

18 (10) during the preceding year; 

19 ‘‘(D) the names of individuals contributing 

20 to any peer-review process provided under para21 graph (8) during the preceding year or years, in 

22 a manner such that those individuals cannot be 

23 identified with a particular research project; 

24 ‘‘(E) a description of efforts by the Insti25 tute under paragraph (11) to— 


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1 ‘‘(i) coordinate the research con2 ducted, commissioned, or otherwise funded 

3 under this section and the resources of the 

4 Institute with research and related efforts 

5 conducted by other private and public enti6 ties; and 

7 ‘‘(ii) build capacity for comparative 

8 clinical effectiveness research and other 

9 relevant research and related efforts 

10 through appropriate activities; and 

11 ‘‘(F) any other relevant information (in12 cluding information on the membership of the 

13 Board, expert advisory panels appointed under 

14 paragraph (5), the methodology committee es15 tablished under paragraph (7), and the execu16 tive staff of the Institute, any conflicts of inter17 est with respect to the members of such Board, 

18 expert advisory panels, and methodology com19 mittee, or with respect to any individuals se20 lected for employment as executive staff of the 

21 Institute, and any bylaws adopted by the Board 

22 during the preceding year). 

23 ‘‘(e) ADMINISTRATION.— 

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

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


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

2 described in subsections (d)(1) and (d)(10) are non3 delegable. 

4 ‘‘(f) BOARD OF GOVERNORS.— 

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

6 Board of Governors, which shall consist of 15 mem7 bers appointed by the Comptroller General of the 

8 United States not later than 6 months after the date 

9 of enactment of this section, as follows: 

10 ‘‘(A) 3 members representing patients and 

11 health care consumers. 

12 ‘‘(B) 3 members representing practicing 

13 physicians, including surgeons. 

14 ‘‘(C) 3 members representing private pay15 ers, of whom at least 1 member shall represent 

16 health insurance issuers and at least 1 member 

17 shall represent employers who self-insure em18 ployee benefits. 

19 ‘‘(D) 3 members representing pharma20 ceutical, device, and diagnostic manufacturers 

21 or developers. 

22 ‘‘(E) 1 member representing nonprofit or23 ganizations involved in health services research. 


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1 ‘‘(F) 1 member representing organizations 

2 that focus on quality measurement and im3 provement or decision support. 

4 ‘‘(G) 1 member representing independent 

5 health services researchers. 

6 ‘‘(2) QUALIFICATIONS.— 

7 ‘‘(A) DIVERSE REPRESENTATION OF PER8 SPECTIVES.—The Board shall represent a broad 

9 range of perspectives and collectively have sci10 entific expertise in clinical health sciences re11 search, including epidemiology, decisions 

12 sciences, health economics, and statistics. 

13 ‘‘(B) CONFLICTS OF INTEREST.— 

14 ‘‘(i) IN GENERAL.—In appointing 

15 members of the Board, the Comptroller 

16 General of the United States shall take 

17 into consideration any conflicts of interest 

18 of potential appointees. Any conflicts of in19 terest of members appointed to the Board 

20 shall be disclosed in accordance with sub21 section (i)(4)(B). 

22 ‘‘(ii) RECUSAL.—A member of the 

23 Board shall be recused from participating 

24 with respect to a particular research 

25 project or other matter considered by the 


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1 Board in carrying out its research project 

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

3 where the member (or an immediate family 

4 member of such member) has a financial 

5 or personal interest directly related to the 

6 research project or the matter that could 

7 affect or be affected by such participation. 

8 ‘‘(3) TERMS.— 

9 ‘‘(A) IN GENERAL.—A member of the 

10 Board shall be appointed for a term of 6 years, 

11 except with respect to the members first ap12 pointed— 

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

14 6 years; 

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

16 of 4 years; and 

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

18 of 2 years. 

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

20 appointed to the Board for more than 2 terms. 

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

22 of the Board whose term has expired may serve 

23 until such member’s successor has taken office, 

24 or until the end of the calendar year in which 


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1 such member’s term has expired, whichever is 

2 earlier. 

3 ‘‘(D) VACANCIES.— 

4 ‘‘(i) IN GENERAL.—Any member ap5 pointed to fill a vacancy prior to the expi6 ration of the term for which such mem7 ber’s predecessor was appointed shall be 

8 appointed for the remainder of such term. 

9 ‘‘(ii) VACANCIES NOT TO AFFECT

10 POWER OF BOARD.—A vacancy on the 

11 Board shall not affect its powers, but shall 

12 be filled in the same manner as the origi13 nal appointment was made. 

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

15 ‘‘(A) IN GENERAL.—The Comptroller Gen16 eral of the United States shall designate a 

17 Chairperson and Vice-Chairperson of the Board 

18 from among the members of the Board. 

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

20 shall serve as Chairperson and Vice-Chair21 person of the Board for a period of 3 years. 

22 ‘‘(5) COMPENSATION.— 

23 ‘‘(A) IN GENERAL.—A member of the 

24 Board shall be entitled to compensation at the 

25 per diem equivalent of the rate provided for 


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1 level IV of the Executive Schedule under section 

2 5315 of title 5, United States Code. 

3 ‘‘(B) TRAVEL EXPENSES.—While away 

4 from home or regular place of business in the 

5 performance of duties for the Board, each mem6 ber of the Board may receive reasonable travel, 

7 subsistence, and other necessary expenses. 

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

9 CONSULTANTS.—The Board may— 

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

11 an executive director and such other personnel 

12 as may be necessary to carry out the duties of 

13 the Institute; 

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

15 may be required in the performance of the du16 ties of the Institute from appropriate depart17 ments and agencies of the Federal Government; 

18 ‘‘(C) enter into contracts or make other ar19 rangements and make such payments as may 

20 be necessary for performance of the duties of 

21 the Institute; 

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

23 diem compensation for individuals performing 

24 the duties of the Institute, including members 

25 of any expert advisory panel appointed under 


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1 subsection (d)(5), members of the methodology 

2 committee established under subsection (d)(7), 

3 and individuals selected to contribute to any 

4 peer-review process under subsection (d)(8); 

5 and 

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

7 bylaws as the Board determines necessary with 

8 respect to the internal organization and oper9 ation of the Institute. 

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

11 shall meet and hold hearings at the call of the 

12 Chairperson or a majority of its members. In the 

13 case where the Board is meeting on matters not re14 lated to personnel, Board meetings shall be open to 

15 the public and advertised through public notice at 

16 least 7 days prior to the meeting. 

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

18 the Board shall constitute a quorum for purposes of 

19 conducting the duties of the Institute, but a lesser 

20 number of members may meet and hold hearings. 

21 ‘‘(g) FINANCIAL OVERSIGHT.— 

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

23 shall provide for the conduct of financial audits of 

24 the Institute on an annual basis by a private entity 

25 with expertise in conducting financial audits. 


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1 ‘‘(2) REVIEW OF AUDIT AND REPORT TO CON2 GRESS.—The Comptroller General of the United 

3 States shall— 

4 ‘‘(A) review the results of the audits con5 ducted under paragraph (1); and 

6 ‘‘(B) submit a report to Congress con7 taining the results of such audits and review. 

8 ‘‘(h) GOVERNMENTAL OVERSIGHT.— 

9 ‘‘(1) REVIEW AND REPORTS.— 

10 ‘‘(A) IN GENERAL.—The Comptroller Gen11 eral of the United States shall review the fol12 lowing: 

13 ‘‘(i) Processes established by the In14 stitute, including those with respect to the 

15 identification of research priorities under 

16 subsection (d)(1)(A) and the conduct of re17 search projects under this section. Such re18 view shall determine whether information 

19 produced by such research projects— 

20 ‘‘(I) is objective and credible; 

21 ‘‘(II) is produced in a manner 

22 consistent with the requirements 

23 under this section; and 

24 ‘‘(III) is developed through a 

25 transparent process. 


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

2 and the effectiveness of activities con3 ducted under this section, including an as4 sessment of— 

5 ‘‘(I) the utilization of the find6 ings of research conducted under this 

7 section by health care decisionmakers; 

8 and 

9 ‘‘(II) the effect of the Institute 

10 and such activities on innovation and 

11 on the health economy of the United 

12 States. 

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

14 after the date of enactment of this section, and 

15 not less frequently than every 5 years there16 after, the Comptroller General of the United 

17 States shall submit a report to Congress con18 taining the results of the review conducted 

19 under subparagraph (A), together with rec20 ommendations for such legislation and adminis21 trative action as the Comptroller General deter22 mines appropriate. 

23 ‘‘(2) FUNDING ASSESSMENT.— 

24 ‘‘(A) IN GENERAL.—The Comptroller Gen25 eral of the United States shall assess the adeVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01165 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 quacy and use of funding for the Institute and 

2 activities conducted under this section under 

3 the PCORTF under section 9511 of the Inter4 nal Revenue Code of 1986. Such assessment 

5 shall include a determination as to whether, 

6 based on the utilization of findings by public 

7 and private payers, each of the following are 

8 appropriate sources of funding for the Institute, 

9 including a determination of whether such 

10 sources of funding should be continued or ad11 justed, or whether other sources of funding not 

12 described in clauses (i) through (iii) would be 

13 appropriate: 

14 ‘‘(i) The transfer of funds from the 

15 Federal Hospital Insurance Trust Fund 

16 under section 1817 and the Federal Sup17 plementary Medical Insurance Trust Fund 

18 under section 1841 to the PCORTF under 

19 section 1183. 

20 ‘‘(ii) The amounts appropriated under 

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

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

23 9511. 


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1 ‘‘(iii) Private sector contributions 

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

3 such subsection (b)(1). 

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

5 after the date of enactment of this section, the 

6 Comptroller General of the United States shall 

7 submit a report to Congress containing the re8 sults of the assessment conducted under sub9 paragraph (A), together with recommendations 

10 for such legislation and administrative action as 

11 the Comptroller General determines appro12 priate. 

13 ‘‘(i) ENSURING TRANSPARENCY, CREDIBILITY, AND

14 ACCESS.—The Institute shall establish procedures to en15 sure that the following requirements for ensuring trans16 parency, credibility, and access are met: 

17 ‘‘(1) PUBLIC COMMENT PERIODS.— 

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

19 provide for a public comment period of not less 

20 than 45 and not more than 60 days at the fol21 lowing times: 

22 ‘‘(i) Prior to the adoption of the na23 tional priorities identified under subsection 

24 (d)(1)(A), the research project agenda es25 tablished under subsection (d)(1)(B), the 


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1 methodological standards developed and 

2 updated by the methodology committee 

3 under subsection (d)(7)(C)(i), the peer-re4 view process generally provided under sub5 section (d)(8), and dissemination protocols 

6 and strategies developed by the Institute 

7 under subsection (d)(9)(B) in accordance 

8 with subsection (d)(10). 

9 ‘‘(ii) Prior to the finalization of indi10 vidual study designs. 

11 ‘‘(iii) After the release of draft find12 ings with respect to a systematic review 

13 and assessment of existing research and 

14 evidence under subsection (d)(2)(A)(i). 

15 ‘‘(B) TRANSMISSION OF PUBLIC COM16 MENTS ON STUDY DESIGN.—The Institute shall 

17 transmit public comments submitted during the 

18 public comment period described in subpara19 graph (A)(ii) to the entity conducting research 

20 with respect to which the individual study de21 sign is being finalized. 

22 ‘‘(2) ADDITIONAL FORUMS.—The Institute 

23 shall, in addition to the public comment periods de24 scribed in paragraph (1)(A), support forums to in25 crease public awareness and obtain and incorporate 


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1 public input and feedback through media (such as 

2 an Internet website) on the following: 

3 ‘‘(A) The identification of research prior4 ities, including research topics, and the estab5 lishment of the research project agenda under 

6 subparagraphs (A) and (B), respectively, of 

7 subsection (d)(1). 

8 ‘‘(B) Research findings. 

9 ‘‘(C) Any other duties, activities, or proc10 esses the Institute determines appropriate. 

11 ‘‘(3) PUBLIC AVAILABILITY.—The Institute 

12 shall make available to the public and disclose 

13 through the official public Internet website of the In14 stitute, and through other forums and media the In15 stitute determines appropriate, the following: 

16 ‘‘(A) The process and methods for the con17 duct of research under this section, including— 

18 ‘‘(i) the identity of the entity con19 ducting such research; 

20 ‘‘(ii) any links the entity has to indus21 try (including such links that are not di22 rectly tied to the particular research being 

23 conducted under this section); 

24 ‘‘(iii) draft study designs (including 

25 research questions and the finalized study 


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1 design, together with public comments on 

2 such study design and responses to such 

3 comments); 

4 ‘‘(iv) research protocols (including 

5 measures taken, methods of research, 

6 methods of analysis, research results, and 

7 such other information as the Institute de8 termines appropriate) with respect to each 

9 medical treatment, service, and item de10 scribed in subsection (a)(2)(B); 

11 ‘‘(v) any key decisions made by the 

12 Institute and any appropriate committees 

13 of the Institute; 

14 ‘‘(vi) the identity of investigators con15 ducting such research and any conflicts of 

16 interest of such investigators; and 

17 ‘‘(vii) any progress reports the Insti18 tute determines appropriate. 

19 ‘‘(B) Notice of each of the public comment 

20 periods under paragraph (1)(A), including 

21 deadlines for public comments for such periods. 

22 ‘‘(C) Public comments submitted during 

23 each of the public comment periods under para24 graph (1)(A), including such public comments 


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1 submitted on draft findings under clause (iii) of 

2 such paragraph. 

3 ‘‘(D) Bylaws, processes, and proceedings of 

4 the Institute, to the extent practicable and as 

5 the Institute determines appropriate. 

6 ‘‘(E) Not later than 90 days after receipt 

7 by the Institute of a relevant report or research 

8 findings, appropriate information contained in 

9 such report or findings. 

10 ‘‘(4) CONFLICTS OF INTEREST.—The Institute 

11 shall— 

12 ‘‘(A) in appointing members to an expert 

13 advisory panel under subsection (d)(5) and the 

14 methodology committee under subsection (d)(7), 

15 and in selecting individuals to contribute to any 

16 peer-review process under subsection (d)(8) and 

17 for employment as executive staff of the Insti18 tute, take into consideration any conflicts of in19 terest of potential appointees, participants, and 

20 staff; and 

21 ‘‘(B) include a description of any such con22 flicts of interest and conflicts of interest of 

23 Board members in the annual report under sub24 section (d)(12), except that, in the case of indi25 viduals contributing to any such peer review 


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1 process, such description shall be in a manner 

2 such that those individuals cannot be identified 

3 with a particular research project. 

4 ‘‘(j) RULES.— 

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

6 staff of the Institute acting on behalf of the Insti7 tute, may not accept gifts, bequeaths, or donations 

8 of services or property. 

9 ‘‘(2) ESTABLISHMENT AND PROHIBITION ON

10 ACCEPTING OUTSIDE FUNDING OR CONTRIBU11 TIONS.—The Institute may not— 

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

13 provided under this section; or 

14 ‘‘(B) accept any funds or contributions 

15 other than as provided under this part. 

16 ‘‘(k) RULES OF CONSTRUCTION.— 

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

18 be construed— 

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

20 coverage, reimbursement, or other policies for 

21 any public or private payer; or 

22 ‘‘(B) as preventing the Secretary from cov23 ering the routine costs of clinical care received 

24 by an individual entitled to, or enrolled for, ben25 efits under title XVIII, XIX, or XXI in the case 


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1 where such individual is participating in a clin2 ical trial and such costs would otherwise be cov3 ered under such title with respect to the bene4 ficiary. 

5 ‘‘(2) REPORTS AND FINDINGS.—None of the re6 ports submitted under this section or research find7 ings disseminated by the Institute shall be construed 

8 as mandates, guidelines, or recommendations for 

9 payment, coverage, or treatment. 

10 ‘‘LIMITATIONS ON CERTAIN USES OF COMPARATIVE

11 EFFECTIVENESS RESEARCH

12 ‘‘SEC. 1182. (a) The Secretary may only use evidence 

13 and findings from comparative effectiveness research con14 ducted under section 1181 to make a determination re15 garding coverage under title XVIII if such use is through 

16 an iterative and transparent process which meets the fol17 lowing requirements: 

18 ‘‘(1) Stakeholders and other individuals have 

19 the opportunity to provide informed and relevant in20 formation with respect to the determination. 

21 ‘‘(2) Stakeholders and other individuals have 

22 the opportunity to review draft proposals of the de23 termination and submit public comments with re24 spect to such draft proposals. 

25 ‘‘(3) In making the determination, the Sec26 retary considers— 


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1 ‘‘(A) other relevant evidence, studies, and 

2 research in addition to such comparative effec3 tiveness research; and 

4 ‘‘(B) evidence and research that dem5 onstrates or suggests a benefit of coverage with 

6 respect to a specific subpopulation of individ7 uals, even if the evidence and findings from the 

8 comparative effectiveness research demonstrates 

9 or suggests that, on average, with respect to the 

10 general population the benefits of coverage do 

11 not exceed the harm. 

12 ‘‘(b) Nothing in this section shall be construed as— 

13 ‘‘(1) superceding or modifying the coverage of 

14 items or services under title XVIII that the Sec15 retary determines are reasonable and necessary 

16 under section 1862(l)(1); or 

17 ‘‘(2) authorizing the Secretary to deny coverage 

18 of items or services under such title solely on the 

19 basis of comparative effectiveness research. 

20 ‘‘(c)(1) The Secretary shall not use evidence or find21 ings from comparative effectiveness research conducted 

22 under section 1181 in determining coverage, reimburse23 ment, or incentive programs under title XVIII in a manner 

24 that treats extending the life of an elderly, disabled, or 

25 terminally ill individual as of lower value than extending 


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1 the life of an individual who is younger, nondisabled, or 

2 not terminally ill. 

3 ‘‘(2) Paragraph (1) shall not be construed as pre4 venting the Secretary from using evidence or findings from 

5 such comparative effectiveness research in determining 

6 coverage, reimbursement, or incentive programs under 

7 title XVIII based upon a comparison of the difference in 

8 the effectiveness of alternative treatments in extending an 

9 individual’s life due to the individual’s age, disability, or 

10 terminal illness. 

11 ‘‘(d)(1) The Secretary shall not use evidence or find12 ings from comparative effectiveness research conducted 

13 under section 1181 in determining coverage, reimburse14 ment, or incentive programs under title XVIII in a manner 

15 that precludes, or with an intent to discourage, an indi16 vidual from choosing a health care treatment based on 

17 how the individual values the tradeoff between extending 

18 the length of their life and the risk of disability. 

19 ‘‘(2)(A) Paragraph (1) shall not be construed to— 

20 ‘‘(i) limit the application of differential copay21 ments under title XVIII based on factors such as 

22 cost or type of service; or 

23 ‘‘(ii) prevent the Secretary from using evidence 

24 or findings from such comparative effectiveness re25 search in determining coverage, reimbursement, or 


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1 incentive programs under such title based upon a 

2 comparison of the difference in the effectiveness of 

3 alternative health care treatments in extending an 

4 individual’s life due to that individual’s age, dis5 ability, or terminal illness. 

6 ‘‘(3) Nothing in the provisions of, or amendments 

7 made by the America’s Healthy Future Act of 2009, shall 

8 be construed to limit comparative effectiveness research 

9 or any other research, evaluation, or dissemination of in10 formation concerning the likelihood that a health care 

11 treatment will result in disability. 

12 ‘‘(e)(1) The Patient-Centered Outcomes Research In13 stitute established under section 1181(b)(1) shall not de14 velop or employ a dollars-per-quality adjusted life year (or 

15 similar measure that discounts the value of a life because 

16 of an individual’s disability) as a threshold to establish 

17 what type of health care is cost effective or recommended. 

18 ‘‘(2) The Secretary shall not utilize such an adjusted 

19 life year (or such a similar measure) as a threshold to 

20 determine coverage, reimbursement, or incentive programs 

21 under title XVIII. 

22 ‘‘TRUST FUND TRANSFERS TO PATIENT-CENTERED

23 OUTCOMES RESEARCH TRUST FUND

24 ‘‘SEC. 1183. (a) IN GENERAL.—The Secretary shall 

25 provide for the transfer, from the Federal Hospital Insur26 ance Trust Fund under section 1817 and the Federal SupVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01176 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 plementary Medical Insurance Trust Fund under section 

2 1841, in proportion (as estimated by the Secretary) to the 

3 total expenditures during such fiscal year that are made 

4 under title XVIII from the respective trust fund, to the 

5 Patient-Centered Outcomes Research Trust Fund (re6 ferred to in this section as the ‘PCORTF’) under section 

7 9511 of the Internal Revenue Code of 1986, the following: 

8 ‘‘(1) For fiscal year 2013, an amount equal to 

9 $1 multiplied by the average number of individuals 

10 entitled to benefits under part A, or enrolled under 

11 part B, of title XVIII during such fiscal year. 

12 ‘‘(2) For each of fiscal years 2014, 2015, 2016, 

13 2017, 2018, and 2019, an amount equal to $2 mul14 tiplied by the average number of individuals entitled 

15 to benefits under part A, or enrolled under part B, 

16 of title XVIII during such fiscal year. 

17 ‘‘(b) ADJUSTMENTS FOR INCREASES IN HEALTH

18 CARE SPENDING.—In the case of any fiscal year begin19 ning after September 30, 2014, the dollar amount in effect 

20 under subsection (a)(2) for such fiscal year shall be equal 

21 to the sum of such dollar amount for the previous fiscal 

22 year (determined after the application of this subsection), 

23 plus an amount equal to the product of— 

24 ‘‘(1) such dollar amount for the previous fiscal 

25 year, multiplied by 


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

2 per capita amount of National Health Expenditures 

3 from the calendar year in which the previous fiscal 

4 year ends to the calendar year in which the fiscal 

5 year involved ends, as most recently published by the 

6 Secretary before the beginning of the fiscal year.’’. 

7 (b) COORDINATION WITH PROVIDER EDUCATION

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

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

10 inserting ‘‘and to enhance the understanding of and utili11 zation by providers of services and suppliers of research 

12 findings disseminated by the Patient-Centered Outcomes 

13 Research Institute established under section 1181’’ before 

14 the period at the end. 

15 (c) PATIENT-CENTERED OUTCOMES RESEARCH

16 TRUST FUND; FINANCING FOR TRUST FUND.— 

17 (1) ESTABLISHMENT OF TRUST FUND.— 

18 (A) IN GENERAL.—Subchapter A of chap19 ter 98 of the Internal Revenue Code of 1986 

20 (relating to establishment of trust funds) is 

21 amended by adding at the end the following 

22 new section: 


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1 ‘‘SEC. 9511. PATIENT-CENTERED OUTCOMES RESEARCH 

2 TRUST FUND. 

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

5 to be known as the ‘Patient-Centered Outcomes Research 

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

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

9 section and section 9602(b). 

10 ‘‘(b) TRANSFERS TO FUND.— 

11 ‘‘(1) APPROPRIATION.—There are hereby ap12 propriated to the Trust Fund the following: 

13 ‘‘(A) For fiscal year 2010, $10,000,000. 

14 ‘‘(B) For fiscal year 2011, $50,000,000. 

15 ‘‘(C) For fiscal year 2012, $150,000,000. 

16 ‘‘(D) For fiscal year 2013— 

17 ‘‘(i) an amount equivalent to the net 

18 revenues received in the Treasury from the 

19 fees imposed under subchapter B of chap20 ter 34 (relating to fees on health insurance 

21 and self-insured plans) for such fiscal year; 

22 and 

23 ‘‘(ii) $150,000,000. 

24 ‘‘(E) For each of fiscal years 2014, 2015, 

25 2016, 2017, 2018, and 2019— 


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1 ‘‘(i) an amount equivalent to the net 

2 revenues received in the Treasury from the 

3 fees imposed under subchapter B of chap4 ter 34 (relating to fees on health insurance 

5 and self-insured plans) for such fiscal year; 

6 and 

7 ‘‘(ii) $150,000,000. 

8 The amounts appropriated under subparagraphs 

9 (A), (B), (C), (D)(ii), and (E)(ii) shall be trans10 ferred from the general fund of the Treasury, from 

11 funds not otherwise appropriated. 

12 ‘‘(2) TRUST FUND TRANSFERS.—In addition to 

13 the amounts appropriated under paragraph (1), 

14 there shall be credited to the PCORTF the amounts 

15 transferred under section 1183 of the Social Secu16 rity Act. 

17 ‘‘(3) AMERICAN RECOVERY AND REINVESTMENT

18 FUNDS.—In addition to the amounts appropriated 

19 under paragraph (1) and the amounts credited 

20 under paragraph (2), of amounts appropriated for 

21 comparative effectiveness research to be allocated at 

22 the discretion of the Secretary of Health and 

23 Human Services under the heading Agency for 

24 Healthcare Research and Quality under the heading 

25 Department of Health and Human Services under 


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1 title VIII of Division A of the American Recovery 

2 and Reinvestment Act of 2009 (Public Law 111–5), 

3 $10,000,000 shall be transferred to the Trust Fund. 

4 ‘‘(4) LIMITATION ON TRANSFERS TO PCORTF.— 

5 No amount may be appropriated or transferred to 

6 the PCORTF on and after the date of any expendi7 ture from the PCORTF which is not an expenditure 

8 permitted under this section. The determination of 

9 whether an expenditure is so permitted shall be 

10 made without regard to— 

11 ‘‘(A) any provision of law which is not con12 tained or referenced in this chapter or in a rev13 enue Act, and 

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

15 subsequently enacted provision or directly or in16 directly seeks to waive the application of this 

17 paragraph. 

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

19 Human Services shall be a trustee of the PCORTF. 

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

21 PCORTF are available, without further appropriation, to 

22 the Patient-Centered Outcomes Research Institute estab23 lished by section 3501(a) of the America’s Healthy Future 

24 Act of 2009 for carrying out part D of title XI of the 


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1 Social Security Act (as in effect on the date of enactment 

2 of such Act). 

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

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

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

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

7 subchapter B of chapter 34, over 

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

9 1 resulting from the fees imposed by such sub10 chapter. 

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

12 for expenditure from the PCORTF after September 30, 

13 2019, and any amounts in such Trust Fund after such 

14 date shall be transferred to the general fund of the Treas15 ury.’’. 

16 (B) CLERICAL AMENDMENT.—The table of 

17 sections for subchapter A of chapter 98 of such 

18 Code is amended by adding at the end the fol19 lowing new item: 

‘‘Sec. 9511. Patient-Centered Outcomes Research Trust Fund.’’. 

20 (2) FINANCING FOR FUND FROM FEES ON IN21 SURED AND SELF-INSURED HEALTH PLANS.— 

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

23 Internal Revenue Code of 1986 is amended by 

24 adding at the end the following new subchapter: 


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1 ‘‘Subchapter B—Insured and Self-Insured 

2 Health Plans 

‘‘Sec. 4375. Health insurance. 

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

‘‘Sec. 4377. Definitions and special rules. 

3 ‘‘SEC. 4375. HEALTH INSURANCE. 

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

5 on each specified health insurance policy for each policy 

6 year ending after September 30, 2012, a fee equal to the 

7 product of $2 ($1 in the case of policy years ending during 

8 fiscal year 2013) multiplied by the average number of lives 

9 covered under the policy. 

10 ‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub11 section (a) shall be paid by the issuer of the policy. 

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

13 purposes of this section: 

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in this section, the term ‘specified health in16 surance policy’ means any accident or health insur17 ance policy (including a policy under a group health 

18 plan) issued with respect to individuals residing in 

19 the United States. 

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

21 term ‘specified health insurance policy’ does not in22 clude any insurance if substantially all of its cov23 erage is of excepted benefits described in section 

24 9832(c). 


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1 ‘‘(3) TREATMENT OF PREPAID HEALTH COV2 ERAGE ARRANGEMENTS.— 

3 ‘‘(A) IN GENERAL.—In the case of any ar4 rangement described in subparagraph (B)— 

5 ‘‘(i) such arrangement shall be treated 

6 as a specified health insurance policy, and 

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

8 subparagraph shall be treated as the 

9 issuer. 

10 ‘‘(B) DESCRIPTION OF ARRANGEMENTS.— 

11 An arrangement is described in this subpara12 graph if under such arrangement fixed pay13 ments or premiums are received as consider14 ation for any person’s agreement to provide or 

15 arrange for the provision of accident or health 

16 coverage to residents of the United States, re17 gardless of how such coverage is provided or ar18 ranged to be provided. 

19 ‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH

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

21 in any fiscal year beginning after September 30, 2014, the 

22 dollar amount in effect under subsection (a) for such pol23 icy year shall be equal to the sum of such dollar amount 

24 for policy years ending in the previous fiscal year (deterVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01184 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 mined after the application of this subsection), plus an 

2 amount equal to the product of— 

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

4 in the previous fiscal year, multiplied by 

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

6 per capita amount of National Health Expenditures 

7 from the calendar year in which the previous fiscal 

8 year ends to the calendar year in which the fiscal 

9 year involved ends, as most recently published by the 

10 Secretary of Health and Human Services before the 

11 beginning of the fiscal year. 

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

13 policy years ending after September 30, 2019. 

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

15 ‘‘(a) IMPOSITION OF FEE.—In the case of any appli16 cable self-insured health plan for each plan year ending 

17 after September 30, 2012, there is hereby imposed a fee 

18 equal to $2 ($1 in the case of plan years ending during 

19 fiscal year 2013) multiplied by the average number of lives 

20 covered under the plan. 

21 ‘‘(b) LIABILITY FOR FEE.— 

22 ‘‘(1) IN GENERAL.—The fee imposed by sub23 section (a) shall be paid by the plan sponsor. 

24 ‘‘(2) PLAN SPONSOR.—For purposes of para25 graph (1) the term ‘plan sponsor’ means— 


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1 ‘‘(A) the employer in the case of a plan es2 tablished or maintained by a single employer, 

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

4 of a plan established or maintained by an em5 ployee organization, 

6 ‘‘(C) in the case of— 

7 ‘‘(i) a plan established or maintained 

8 by 2 or more employers or jointly by 1 or 

9 more employers and 1 or more employee 

10 organizations, 

11 ‘‘(ii) a multiple employer welfare ar12 rangement, or 

13 ‘‘(iii) a voluntary employees’ bene14 ficiary association described in section 

15 501(c)(9), 

16 the association, committee, joint board of trust17 ees, or other similar group of representatives of 

18 the parties who establish or maintain the plan, 

19 or 

20 ‘‘(D) the cooperative or association de21 scribed in subsection (c)(2)(F) in the case of a 

22 plan established or maintained by such a coop23 erative or association. 

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

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1 sured health plan’ means any plan for providing accident 

2 or health coverage if— 

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

4 other than through an insurance policy, and 

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

6 ‘‘(A) by 1 or more employers for the ben7 efit of their employees or former employees, 

8 ‘‘(B) by 1 or more employee organizations 

9 for the benefit of their members or former 

10 members, 

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

12 or more employee organizations for the benefit 

13 of employees or former employees, 

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

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

16 ‘‘(E) by any organization described in sec17 tion 501(c)(6), or 

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

19 the preceding subparagraphs, by a multiple em20 ployer welfare arrangement (as defined in sec21 tion 3(40) of Employee Retirement Income Se22 curity Act of 1974), a rural electric cooperative 

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

24 or a rural telephone cooperative association (as 

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


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1 ‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH

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

3 in any fiscal year beginning after September 30, 2014, the 

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

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

6 plan years ending in the previous fiscal year (determined 

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

8 equal to the product of— 

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

10 in the previous fiscal year, multiplied by 

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

12 per capita amount of National Health Expenditures 

13 from the calendar year in which the previous fiscal 

14 year ends to the calendar year in which the fiscal 

15 year involved ends, as most recently published by the 

16 Secretary of Health and Human Services before the 

17 beginning of the fiscal year. 

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

19 plan years ending after September 30, 2019. 

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

21 ‘‘(a) DEFINITIONS.—For purposes of this sub22 chapter— 

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

24 term ‘accident and health coverage’ means any cov25 erage which, if provided by an insurance policy, 


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1 would cause such policy to be a specified health in2 surance policy (as defined in section 4375(c)). 

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

4 policy’ means any policy or other instrument where5 by a contract of insurance is issued, renewed, or ex6 tended. 

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

8 States’ includes any possession of the United States. 

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

10 ‘‘(1) IN GENERAL.—For purposes of this sub11 chapter— 

12 ‘‘(A) the term ‘person’ includes any gov13 ernmental entity, and 

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

15 of law, governmental entities shall not be ex16 empt from the fees imposed by this subchapter 

17 except as provided in paragraph (2). 

18 ‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL

19 PROGRAMS.—In the case of an exempt governmental 

20 program, no fee shall be imposed under section 4375 

21 or section 4376 on any covered life under such pro22 gram. 

23 ‘‘(3) EXEMPT GOVERNMENTAL PROGRAM DE24 FINED.—For purposes of this subchapter, the term 

25 ‘exempt governmental program’ means— 


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1 ‘‘(A) any insurance program established 

2 under title XVIII of the Social Security Act, 

3 ‘‘(B) the medical assistance program es4 tablished by title XIX or XXI of the Social Se5 curity Act, 

6 ‘‘(C) any program established by Federal 

7 law for providing medical care (other than 

8 through insurance policies) to individuals (or 

9 the spouses and dependents thereof) by reason 

10 of such individuals being— 

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

12 the United States, or 

13 ‘‘(ii) veterans, and 

14 ‘‘(D) any program established by Federal 

15 law for providing medical care (other than 

16 through insurance policies) to members of In17 dian tribes (as defined in section 4(d) of the In18 dian Health Care Improvement Act). 

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

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

21 as if they were taxes. 

22 ‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith23 standing any other provision of law, no amount collected 

24 under this subchapter shall be covered over to any posses25 sion of the United States.’’. 


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1 (B) CLERICAL AMENDMENTS.— 

2 (i) Chapter 34 of such Code is amend3 ed by striking the chapter heading and in4 serting the following: 

5 ‘‘CHAPTER 34—TAXES ON CERTAIN 

6 INSURANCE POLICIES 

‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS

‘‘SUBCHAPTER B. INSURED AND SELF-INSURED HEALTH PLANS

7 ‘‘Subchapter A—Policies Issued By Foreign 

8 Insurers’’. 

9 (ii) The table of chapters for subtitle 

10 D of such Code is amended by striking the 

11 item relating to chapter 34 and inserting 

12 the following new item: 

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

13 (d) TAX-EXEMPT STATUS OF THE PATIENT-CEN14 TERED OUTCOMES RESEARCH INSTITUTE.—Subsection 

15 501(l) of the Internal Revenue Code of 1986 is amended 

16 by adding at the end the following new paragraph: 

17 ‘‘(4) The Patient-Centered Outcomes Research 

18 Institute established under section 1181(b) of the 

19 Social Security Act.’’. 


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1 SEC. 3502. COORDINATION WITH FEDERAL COORDINATING 

2 COUNCIL FOR COMPARATIVE EFFECTIVE3 NESS RESEARCH. 

4 Section 804 of Division A of the American Recovery 

5 and Reinvestment Act of 2009 (42 U.S.C. 299b–8) is 

6 amended— 

7 (1) in subsection (c)— 

8 (A) in paragraph (1), by striking ‘‘and’’ at 

9 the end; 

10 (B) in paragraph (2), by striking the pe11 riod at the end and inserting ‘‘; and’’; and 

12 (C) by adding at the end the following new 

13 paragraph: 

14 ‘‘(3) provide support to the Patient-Centered 

15 Outcomes Research Institute established under sec16 tion 1181(b)(1) of the Social Security Act (referred 

17 to in this section as the ‘Institute’).’’; 

18 (2) in subsection (e)(2), by striking ‘‘regarding 

19 its activities’’ and all that follows through the period 

20 at the end and inserting ‘‘containing— 

21 ‘‘(A) an inventory of its activities with re22 spect to comparative effectiveness research con23 ducted by relevant Federal departments and 

24 agencies; and 


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1 ‘‘(B) recommendations concerning better 

2 coordination of comparative effectiveness re3 search by such departments and agencies.’’; 

4 (3) by redesignating subsection (g) as sub5 section (h); and 

6 (4) by inserting after subsection (f) the fol7 lowing new subsection: 

8 ‘‘(g) COORDINATION WITH THE PATIENT-CENTERED

9 OUTCOMES RESEARCH INSTITUTE.—The Council shall co10 ordinate with the Institute in carrying out its duties under 

11 this section.’’. 

12 SEC. 3503. GAO REPORT ON NATIONAL COVERAGE DETER13 MINATIONS PROCESS. 

14 Not later than 18 months after the date of enactment 

15 of this Act, the Comptroller General of the United States 

16 shall submit a report to Congress on the process for mak17 ing national coverage determinations (as defined in section 

18 1869(f)(1)(B) of the Social Security Act (42 U.S.C. 

19 1395ff(f)(1)(B))) under the Medicare program under title 

20 XVIII of the Social Security Act. Such report shall include 

21 a determination whether, in initiating and conducting such 

22 process, the Secretary of Health and Human Services has 

23 complied with applicable law and regulations, including re24 quirements for consultation with appropriate outside ex25 perts, providing appropriate notice and comment opportuVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01193 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 nities to the public, and making information and data 

2 (other than proprietary data) considered in making such 

3 determinations available to the public and to nonvoting 

4 members of any advisory committees established to advise 

5 the Secretary with respect to such determinations. 

6 Subtitle G—Administrative 

7 Simplification 

8 SEC. 3601. ADMINISTRATIVE SIMPLIFICATION. 

9 (a) OPERATING RULES FOR HEALTH INFORMATION

10 TRANSACTIONS.— 

11 (1) DEFINITION OF OPERATING RULES.—Sec12 tion 1171 of the Social Security Act (42 U.S.C. 

13 1320d) is amended by adding at the end the fol14 lowing: 

15 ‘‘(9) OPERATING RULES.—The term ‘operating 

16 rules’ means the necessary business rules and guide17 lines for the electronic exchange of information that 

18 are not defined by a standard or its implementation 

19 specifications as adopted for purposes of this part.’’. 

20 (2) OPERATING RULES AND COMPLIANCE.— 

21 Section 1173 of the Social Security Act (42 U.S.C. 

22 1320d–2) is amended— 

23 (A) in subsection (a)(2), by adding at the 

24 end the following new subparagraph: 

25 ‘‘(J) Electronic funds transfers.’’; and 


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1 (B) by adding at the end the following new 

2 subsections: 

3 ‘‘(g) OPERATING RULES.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall adopt 

5 a single set of operating rules for each transaction 

6 described in subsection (a)(2) with the goal of cre7 ating as much uniformity in the implementation of 

8 the electronic standards as possible. Such operating 

9 rules shall be consensus-based and reflect the nec10 essary business rules affecting health plans and 

11 health care providers and the manner in which they 

12 operate pursuant to standards issued under Health 

13 Insurance Portability and Accountability Act of 

14 1996. 

15 ‘‘(2) OPERATING RULES DEVELOPMENT.—In 

16 adopting operating rules under this subsection, the 

17 Secretary shall rely on recommendations for oper18 ating rules developed by a qualified nonprofit entity, 

19 as selected by the Secretary, that meets the fol20 lowing requirements: 

21 ‘‘(A) The entity focuses its mission on ad22 ministrative simplification. 

23 ‘‘(B) The entity demonstrates an estab24 lished multi-stakeholder and consensus-based 

25 process for development of operating rules, inVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01195 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 cluding representation by or participation from 

2 health plans, health care providers, vendors, rel3 evant Federal agencies, and other standard de4 velopment organizations. 

5 ‘‘(C) The entity has established a public 

6 set of guiding principles that ensure the oper7 ating rules and process are open and trans8 parent. 

9 ‘‘(D) The entity coordinates its activities 

10 with the HIT Policy Committee and the HIT 

11 Standards Committee (as established under 

12 title XXX of the Public Health Service Act) 

13 and complements the efforts of the Office of the 

14 National Healthcare Coordinator and its related 

15 health information exchange goals. 

16 ‘‘(E) The entity incorporates national 

17 standards, including the transaction standards 

18 issued under Health Insurance Portability and 

19 Accountability Act of 1996. 

20 ‘‘(F) The entity supports nondiscrimina21 tion and conflict of interest policies that dem22 onstrate a commitment to open, fair, and non23 discriminatory practices. 

24 ‘‘(G) The entity allows for public review 

25 and updates of the operating rules. 


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1 ‘‘(3) REVIEW AND RECOMMENDATIONS.—The 

2 National Committee on Vital and Health Statistics 

3 shall— 

4 ‘‘(A) review the operating rules developed 

5 by a nonprofit entity described under paragraph 

6 (2); 

7 ‘‘(B) determine whether such rules rep8 resent a consensus view of the health care in9 dustry and are consistent with and do not alter 

10 current standards; 

11 ‘‘(C) evaluate whether such rules are con12 sistent with electronic standards adopted for 

13 health information technology; and 

14 ‘‘(D) submit to the Secretary a rec15 ommendation as to whether the Secretary 

16 should adopt such rules. 

17 ‘‘(4) IMPLEMENTATION.— 

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

19 adopt operating rules under this subsection, by 

20 regulation in accordance with subparagraph 

21 (C), following consideration of the rules devel22 oped by the non-profit entity described in para23 graph (2) and the recommendation submitted 

24 by the National Committee on Vital and Health 


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1 Statistics under paragraph (3)(D) and having 

2 ensured consultation with providers. 

3 ‘‘(B) ADOPTION REQUIREMENTS; EFFEC4 TIVE DATES.— 

5 ‘‘(i) ELIGIBILITY FOR A HEALTH

6 PLAN AND HEALTH CLAIM STATUS.—The 

7 set of operating rules for transactions for 

8 eligibility for a health plan and health 

9 claim status shall be adopted not later 

10 than July 1, 2011, in a manner ensuring 

11 that such rules are effective not later than 

12 January 1, 2013, and may allow for the 

13 use of a machine readable identification 

14 card. 

15 ‘‘(ii) ELECTRONIC FUNDS TRANSFERS

16 AND HEALTH CARE PAYMENT AND REMIT17 TANCE ADVICE.—The set of operating 

18 rules for electronic funds transfers and 

19 health care payment and remittance advice 

20 shall be adopted not later than July 1, 

21 2012, in a manner ensuring that such 

22 rules are effective not later than January 

23 1, 2014. 

24 ‘‘(iii) OTHER COMPLETED TRANS25 ACTIONS.—The set of operating rules for 


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1 the remainder of the completed trans2 actions described in subsection (a)(2), in3 cluding health claims or equivalent encoun4 ter information, enrollment and 

5 disenrollment in a health plan, health plan 

6 premium payments, and referral certifi7 cation and authorization, shall be adopted 

8 not later than July 1, 2014, in a manner 

9 ensuring that such rules are effective not 

10 later than January 1, 2016. 

11 ‘‘(C) EXPEDITED RULEMAKING.—The Sec12 retary shall promulgate an interim final rule 

13 applying any standard or operating rule rec14 ommended by the National Committee on Vital 

15 and Health Statistics pursuant to paragraph 

16 (3). The Secretary shall accept public comments 

17 on any interim final rule published under this 

18 subparagraph for 60 days after the date of such 

19 publication. 

20 ‘‘(h) COMPLIANCE.— 

21 ‘‘(1) HEALTH PLAN CERTIFICATION.— 

22 ‘‘(A) ELIGIBILITY FOR A HEALTH PLAN, 

23 HEALTH CLAIM STATUS, ELECTRONIC FUNDS

24 TRANSFERS, HEALTH CARE PAYMENT AND RE25 MITTANCE ADVICE.—Not later than December 


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1 31, 2013, a health plan shall file a statement 

2 with the Secretary, in such form as the Sec3 retary may require, certifying that the data and 

4 information systems for such plan are in com5 pliance with any applicable standards (as de6 scribed under paragraph (7) of section 1171) 

7 and operating rules (as described under para8 graph (9) of such section) for electronic funds 

9 transfers, eligibility for a health plan, health 

10 claim status, and health care payment and re11 mittance advice, respectively. 

12 ‘‘(B) OTHER COMPLETED TRANS13 ACTIONS.—Not later than December 31, 2015, 

14 a health plan shall file a statement with the 

15 Secretary, in such form as the Secretary may 

16 require, certifying that the data and informa17 tion systems for such plan are in compliance 

18 with any applicable standards and operating 

19 rules for the remainder of the completed trans20 actions described in subsection (a)(2), including 

21 health claims or equivalent encounter informa22 tion, enrollment and disenrollment in a health 

23 plan, health plan premium payments, and refer24 ral certification and authorization, respectively. 

25 A health plan shall provide the same level of 


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1 documentation to certify compliance with such 

2 transactions as is required to certify compliance 

3 with the transactions specified in subparagraph 

4 (A). 

5 ‘‘(2) DOCUMENTATION OF COMPLIANCE.—A 

6 health plan shall provide the Secretary, in such form 

7 as the Secretary may require, with adequate docu8 mentation of compliance with the standards and op9 erating rules described under paragraph (1). A 

10 health plan shall not be considered to have provided 

11 adequate documentation and shall not be certified as 

12 being in compliance with such standards, unless the 

13 health plan— 

14 ‘‘(A) demonstrates to the Secretary that 

15 the plan conducts the electronic transactions 

16 specified in paragraph (1) in a manner that 

17 fully complies with the regulations of the Sec18 retary; and 

19 ‘‘(B) provides documentation showing that 

20 the plan has completed end-to-end testing for 

21 such transactions with their partners, such as 

22 hospitals and physicians. 

23 ‘‘(3) SERVICE CONTRACTS.—A health plan shall 

24 be required to comply with any applicable certifi25 cation and compliance requirements (and provide the 


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1 Secretary with adequate documentation of such com2 pliance) under this subsection for any entities that 

3 provide services pursuant to a contract with such 

4 health plan. 

5 ‘‘(4) CERTIFICATION BY OUTSIDE ENTITY.— 

6 The Secretary may contract with an independent, 

7 outside entity to certify that a health plan has com8 plied with the requirements under this subsection, 

9 provided that the certification standards employed 

10 by such entities are in accordance with any stand11 ards or rules issued by the Secretary. 

12 ‘‘(5) COMPLIANCE WITH REVISED STANDARDS

13 AND RULES.—A health plan (including entities de14 scribed under paragraph (3)) shall comply with the 

15 certification and documentation requirements under 

16 this subsection for any interim final rule promul17 gated by the Secretary under subsection (i) that 

18 amends any standard or operating rule described 

19 under paragraph (1) of this subsection. A health 

20 plan shall comply with such requirements not later 

21 than the effective date of the applicable interim final 

22 rule. 

23 ‘‘(6) AUDITS OF HEALTH PLANS.—The Sec24 retary shall conduct periodic audits to ensure that 

25 health plans (including entities described under 


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1 paragraph (3)) are in compliance with any standards 

2 and operating rules that are described under para3 graph (1). 

4 ‘‘(i) REVIEW AND AMENDMENT OF STANDARDS AND

5 RULES.— 

6 ‘‘(1) ESTABLISHMENT.—Not later than Janu7 ary 1, 2014, the Secretary shall establish a review 

8 committee (as described under paragraph (4)). 

9 ‘‘(2) EVALUATIONS AND REPORTS.— 

10 ‘‘(A) HEARINGS.—Not later than April 1, 

11 2014, and not less than biennially thereafter, 

12 the Secretary, acting through the review com13 mittee, shall conduct hearings to evaluate and 

14 review the existing standards and operating 

15 rules established under this section. 

16 ‘‘(B) REPORT.—Not later than July 1, 

17 2014, and not less than biennially thereafter, 

18 the review committee shall provide rec19 ommendations for updating and improving such 

20 standards and rules. The review committee 

21 shall recommend a single set of operating rules 

22 per transaction standard and maintain the goal 

23 of creating as much uniformity as possible in 

24 the implementation of the electronic standards. 

25 ‘‘(3) INTERIM FINAL RULEMAKING.— 


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1 ‘‘(A) IN GENERAL.—Any recommendations 

2 to amend existing standards and operating 

3 rules that have been approved by the review 

4 committee and reported to the Secretary under 

5 paragraph (2)(B) shall be adopted by the Sec6 retary through promulgation of an interim final 

7 rule not later than 90 days after receipt of the 

8 committee’s report. 

9 ‘‘(B) PUBLIC COMMENT.— 

10 ‘‘(i) PUBLIC COMMENT PERIOD.—The 

11 Secretary shall accept public comments on 

12 any interim final rule published under this 

13 paragraph for 60 days after the date of 

14 such publication. 

15 ‘‘(ii) EFFECTIVE DATE.—The effective 

16 date of any amendment to existing stand17 ards or operating rules that is adopted 

18 through an interim final rule published 

19 under this paragraph shall be 25 months 

20 following the close of such public comment 

21 period. 

22 ‘‘(4) REVIEW COMMITTEE.— 

23 ‘‘(A) DEFINITION.—For the purposes of 

24 this subsection, the term ‘review committee’ 

25 means a committee within the Department of 


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1 Health and Human services that has been des2 ignated by the Secretary to carry out this sub3 section, including— 

4 ‘‘(i) the National Committee on Vital 

5 and Health Statistics; or 

6 ‘‘(ii) any appropriate committee as de7 termined by the Secretary. 

8 ‘‘(B) COORDINATION OF HIT STAND9 ARDS.—In developing recommendations under 

10 this subsection, the review committee shall con11 sider the standards approved by the Office of 

12 the National Coordinator for Health Informa13 tion Technology. 

14 ‘‘(j) PENALTIES.— 

15 ‘‘(1) PENALTY FEE.— 

16 ‘‘(A) IN GENERAL.—Not later than April 

17 1, 2014, and annually thereafter, the Secretary 

18 shall assess a penalty fee (as determined under 

19 subparagraph (B)) against a health plan that 

20 has failed to meet the requirements under sub21 section (h) with respect to certification and doc22 umentation of compliance with the standards 

23 (and their operating rules) as described under 

24 paragraph (1) of such subsection. 


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1 ‘‘(B) FEE AMOUNT.—Subject to subpara2 graphs (C), (D), and (E), the Secretary shall 

3 assess a penalty fee against a health plan in the 

4 amount of $1 per covered life until certification 

5 is complete. The penalty shall be assessed per 

6 person covered by the plan for which its data 

7 systems for major medical policies are not in 

8 compliance and shall be imposed against the 

9 health plan for each day that the plan is not in 

10 compliance with the requirements under sub11 section (h). 

12 ‘‘(C) ADDITIONAL PENALTY FOR MIS13 REPRESENTATION.—A health plan that know14 ingly provides inaccurate or incomplete informa15 tion in a statement of certification or docu16 mentation of compliance under subsection (h) 

17 shall be subject to a penalty fee that is double 

18 the amount that would otherwise be imposed 

19 under this subsection. 

20 ‘‘(D) ANNUAL FEE INCREASE.—The 

21 amount of the penalty fee imposed under this 

22 subsection shall be increased on an annual basis 

23 by the annual percentage increase in total na24 tional health care expenditures, as determined 

25 by the Secretary. 


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1 ‘‘(E) PENALTY LIMIT.—A penalty fee as2 sessed against a health plan under this sub3 section shall not exceed, on an annual basis— 

4 ‘‘(i) an amount equal to $20 per cov5 ered life under such plan; or 

6 ‘‘(ii) an amount equal to $40 per cov7 ered life under the plan if such plan has 

8 knowingly provided inaccurate or incom9 plete information (as described under sub10 paragraph (C)). 

11 ‘‘(F) DETERMINATION OF COVERED INDI12 VIDUALS.—The Secretary shall determine the 

13 number of covered lives under a health plan 

14 based upon the most recent statements and fil15 ings that have been submitted by such plan to 

16 the Securities and Exchange Commission. 

17 ‘‘(2) NOTICE AND DISPUTE PROCEDURE.—The 

18 Secretary shall establish a procedure for assessment 

19 of penalty fees under this subsection that provides a 

20 health plan with reasonable notice and a dispute res21 olution procedure prior to provision of a notice of as22 sessment by the Secretary of the Treasury (as de23 scribed under paragraph (4)(B)). 

24 ‘‘(3) PENALTY FEE REPORT.—Not later than 

25 May 1, 2014, and annually thereafter, the Secretary 


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1 shall provide the Secretary of the Treasury with a 

2 report identifying those health plans that have been 

3 assessed a penalty fee under this subsection. 

4 ‘‘(4) COLLECTION OF PENALTY FEE.— 

5 ‘‘(A) IN GENERAL.—The Secretary of the 

6 Treasury, acting through the Financial Man7 agement Service, shall administer the collection 

8 of penalty fees from health plans that have been 

9 identified by the Secretary in the penalty fee re10 port provided under paragraph (3). 

11 ‘‘(B) NOTICE.—Not later than August 1, 

12 2014, and annually thereafter, the Secretary of 

13 the Treasury shall provide notice to each health 

14 plan that has been assessed a penalty fee by the 

15 Secretary under this subsection. Such notice 

16 shall include the amount of the penalty fee as17 sessed by the Secretary and the due date for 

18 payment of such fee to the Secretary of the 

19 Treasury (as described in subparagraph (C)). 

20 ‘‘(C) PAYMENT DUE DATE.—Payment by a 

21 health plan for a penalty fee assessed under 

22 this subsection shall be made to the Secretary 

23 of the Treasury not later than November 1, 

24 2014, and annually thereafter. 


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1 ‘‘(D) UNPAID PENALTY FEES.—Any 

2 amount of a penalty fee assessed against a 

3 health plan under this subsection for which pay4 ment has not been made by the due date pro5 vided under subparagraph (C) shall be— 

6 ‘‘(i) increased by the interest accrued 

7 on such amount, as determined pursuant 

8 to the underpayment rate established 

9 under section 6601 of the Internal Rev10 enue Code of 1986; and 

11 ‘‘(ii) treated as a past-due, legally en12 forceable debt owed to a Federal agency 

13 for purposes of section 6402(d) of the In14 ternal Revenue Code of 1986. 

15 ‘‘(E) ADMINISTRATIVE FEES.—Any fee 

16 charged or allocated for collection activities con17 ducted by the Financial Management Service 

18 will be passed on to a health plan on a pro-rata 

19 basis and added to any penalty fee collected 

20 from the plan.’’. 

21 (b) PROMULGATION OF RULES.— 

22 (1) UNIQUE HEALTH PLAN IDENTIFIER.—The 

23 Secretary shall promulgate a final rule to establish 

24 a unique health plan identifier (as described in sec25 tion 1173(b) of the Social Security Act (42 U.S.C. 


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1 1320d-2(b))) based on the input of the National 

2 Committee of Vital and Health Statistics. The Sec3 retary may do so on an interim final basis and such 

4 rule shall be effective not later than October 1, 

5 2012. 

6 (2) ELECTRONIC FUNDS TRANSFER.—The Sec7 retary shall promulgate a final rule to establish a 

8 standard for electronic funds transfers (as described 

9 in section 1173(a)(2)(J) of the Social Security Act, 

10 as added by subsection (a)(2)(A)). The Secretary 

11 may do so on an interim final basis and shall adopt 

12 such standard not later than January 1, 2012, in a 

13 manner ensuring that such standard is effective not 

14 later than January 1, 2014. 

15 (c) EXPANSION OF ELECTRONIC TRANSACTIONS IN

16 MEDICARE.—Section 1862(a) of the Social Security Act 

17 (42 U.S.C. 1395y(a)) is amended— 

18 (1) in paragraph (23), by striking the ‘‘or’’ at 

19 the end; 

20 (2) in paragraph (24), by striking the period 

21 and inserting ‘‘; or’’; and 

22 (3) by inserting after paragraph (24) the fol23 lowing new paragraph: 

24 ‘‘(25) not later than January 1, 2014, for 

25 which the payment is other than by electronic funds 


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1 transfer (EFT) or an electronic remittance in a form 

2 as specified in ASC X12 835 Health Care Payment 

3 and Remittance Advice or subsequent standard.’’. 

4 (d) MEDICARE AND MEDICAID COMPLIANCE RE5 PORTS.—Not later than July 1, 2013, the Secretary of 

6 Health and Human Services shall submit a report to the 

7 Chairs and Ranking Members of the Committee on Ways 

8 and Means and the Committee on Energy and Commerce 

9 of the House of Representatives and the Chairs and Rank10 ing Members of the Committee on Health, Education, 

11 Labor, and Pensions and the Committee on Finance of 

12 the Senate on the extent to which the Medicare program 

13 and providers that serve beneficiaries under that program, 

14 and State Medicaid programs and providers that serve 

15 beneficiaries under those programs, transact electronically 

16 in accordance with transaction standards issued under the 

17 Health Insurance Portability and Accountability Act of 

18 1996, part C of title XI of the Social Security Act, and 

19 regulations promulgated under such Acts. 

20 Subtitle H—Sense of the Senate 

21 Regarding Medical Malpractice 

22 SEC. 3701. SENSE OF THE SENATE REGARDING MEDICAL 

23 MALPRACTICE. 

24 It is the sense of the Senate that— 


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1 (1) health care reform presents an opportunity 

2 to address issues related to medical malpractice and 

3 medical liability insurance; 

4 (2) States should be encouraged to develop and 

5 test alternatives to the existing civil litigation system 

6 as a way of improving patient safety, reducing med7 ical errors, encouraging the efficient resolution of 

8 disputes, increasing the availability of prompt and 

9 fair resolution of disputes, and improving access to 

10 liability insurance, while preserving an individual’s 

11 right to seek redress in court; and 

12 (3) Congress should consider establishing a 

13 State demonstration program to evaluate alter14 natives to the existing civil litigation system with re15 spect to the resolution of medical malpractice claims. 


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1 TITLE IV—TRANSPARENCY AND 

2 PROGRAM INTEGRITY 

3 Subtitle A—Limitation on Medicare 

4 Exception to the Prohibition on 

5 Certain Physician Referrals for 

6 Hospitals 

7 SEC. 4001. LIMITATION ON MEDICARE EXCEPTION TO THE 

8 PROHIBITION ON CERTAIN PHYSICIAN RE9 FERRALS FOR HOSPITALS. 

10 (a) IN GENERAL.—Section 1877 of the Social Secu11 rity Act (42 U.S.C. 1395nn) is amended— 

12 (1) in subsection (d)(2)— 

13 (A) in subparagraph (A), by striking 

14 ‘‘and’’ at the end; 

15 (B) in subparagraph (B), by striking the 

16 period at the end and inserting ‘‘; and’’; and 

17 (C) by adding at the end the following new 

18 subparagraph: 

19 ‘‘(C) in the case where the entity is a hos20 pital, the hospital meets the requirements of 

21 paragraph (3)(D).’’; 

22 (2) in subsection (d)(3)— 

23 (A) in subparagraph (B), by striking 

24 ‘‘and’’ at the end; 


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1 (B) in subparagraph (C), by striking the 

2 period at the end and inserting ‘‘; and’’; and 

3 (C) by adding at the end the following new 

4 subparagraph: 

5 ‘‘(D) the hospital meets the requirements 

6 described in subsection (i)(1) not later than 18 

7 months after the date of the enactment of this 

8 subparagraph.’’; and 

9 (3) by adding at the end the following new sub10 section: 

11 ‘‘(i) REQUIREMENTS FOR HOSPITALS TO QUALIFY

12 FOR RURAL PROVIDER AND HOSPITAL EXCEPTION TO

13 OWNERSHIP OR INVESTMENT PROHIBITION.— 

14 ‘‘(1) REQUIREMENTS DESCRIBED.—For pur15 poses of subsection (d)(3)(D), the requirements de16 scribed in this paragraph for a hospital are as fol17 lows: 

18 ‘‘(A) PROVIDER AGREEMENT.—The hos19 pital had— 

20 ‘‘(i) physician ownership or invest21 ment on November 1, 2009; and 

22 ‘‘(ii) a provider agreement under sec23 tion 1866 in effect on such date. 

24 ‘‘(B) LIMITATION ON EXPANSION OF FA25 CILITY CAPACITY.—Except as provided in paraVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01214 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 graph (3), the number of operating rooms, pro2 cedure rooms, and beds for which the hospital 

3 is licensed at any time on or after the date of 

4 the enactment of this subsection is no greater 

5 than the number of operating rooms, procedure 

6 rooms, and beds for which the hospital is li7 censed as of such date. 

8 ‘‘(C) PREVENTING CONFLICTS OF INTER9 EST.— 

10 ‘‘(i) The hospital submits to the Sec11 retary an annual report containing a de12 tailed description of— 

13 ‘‘(I) the identity of each physi14 cian owner or investor and any other 

15 owners or investors of the hospital; 

16 and 

17 ‘‘(II) the nature and extent of all 

18 ownership and investment interests in 

19 the hospital. 

20 ‘‘(ii) The hospital has procedures in 

21 place to require that any referring physi22 cian owner or investor discloses to the pa23 tient being referred, by a time that permits 

24 the patient to make a meaningful decision 


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1 regarding the receipt of care, as deter2 mined by the Secretary— 

3 ‘‘(I) the ownership or investment 

4 interest, as applicable, of such refer5 ring physician in the hospital; and 

6 ‘‘(II) if applicable, any such own7 ership or investment interest of the 

8 treating physician. 

9 ‘‘(iii) The hospital does not condition 

10 any physician ownership or investment in11 terests either directly or indirectly on the 

12 physician owner or investor making or in13 fluencing referrals to the hospital or other14 wise generating business for the hospital. 

15 ‘‘(iv) The hospital discloses the fact 

16 that the hospital is partially owned or in17 vested in by physicians— 

18 ‘‘(I) on any public website for the 

19 hospital; and 

20 ‘‘(II) in any public advertising 

21 for the hospital. 

22 ‘‘(D) ENSURING BONA FIDE INVEST23 MENT.— 

24 ‘‘(i) The percentage of the total value 

25 of the ownership or investment interests 


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1 held in the hospital, or in an entity whose 

2 assets include the hospital, by physician 

3 owners or investors in the aggregate does 

4 not exceed such percentage as of the date 

5 of enactment of this subsection. 

6 ‘‘(ii) Any ownership or investment in7 terests that the hospital offers to a physi8 cian owner or investor are not offered on 

9 more favorable terms than the terms of10 fered to a person who is not a physician 

11 owner or investor. 

12 ‘‘(iii) The hospital (or any owner or 

13 investor in the hospital) does not directly 

14 or indirectly provide loans or financing for 

15 any investment in the hospital by a physi16 cian owner or investor. 

17 ‘‘(iv) The hospital (or any owner or 

18 investor in the hospital) does not directly 

19 or indirectly guarantee a loan, make a pay20 ment toward a loan, or otherwise subsidize 

21 a loan, for any individual physician owner 

22 or investor or group of physician owners or 

23 investors that is related to acquiring any 

24 ownership or investment interest in the 

25 hospital. 


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1 ‘‘(v) Ownership or investment returns 

2 are distributed to each owner or investor in 

3 the hospital in an amount that is directly 

4 proportional to the ownership or invest5 ment interest of such owner or investor in 

6 the hospital. 

7 ‘‘(vi) Physician owners and investors 

8 do not receive, directly or indirectly, any 

9 guaranteed receipt of or right to purchase 

10 other business interests related to the hos11 pital, including the purchase or lease of 

12 any property under the control of other 

13 owners or investors in the hospital or lo14 cated near the premises of the hospital. 

15 ‘‘(vii) The hospital does not offer a 

16 physician owner or investor the oppor17 tunity to purchase or lease any property 

18 under the control of the hospital or any 

19 other owner or investor in the hospital on 

20 more favorable terms than the terms of21 fered to an individual who is not a physi22 cian owner or investor. 

23 ‘‘(E) PATIENT SAFETY.— 

24 ‘‘(i) Insofar as the hospital admits a 

25 patient and does not have any physician 


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1 available on the premises to provide serv2 ices during all hours in which the hospital 

3 is providing services to such patient, before 

4 admitting the patient— 

5 ‘‘(I) the hospital discloses such 

6 fact to a patient; and 

7 ‘‘(II) following such disclosure, 

8 the hospital receives from the patient 

9 a signed acknowledgment that the pa10 tient understands such fact. 

11 ‘‘(ii) The hospital has the capacity 

12 to— 

13 ‘‘(I) provide assessment and ini14 tial treatment for patients; and 

15 ‘‘(II) refer and transfer patients 

16 to hospitals with the capability to 

17 treat the needs of the patient in18 volved. 

19 ‘‘(F) LIMITATION ON APPLICATION TO

20 CERTAIN CONVERTED FACILITIES.—The hos21 pital was not converted from an ambulatory 

22 surgical center to a hospital on or after the date 

23 of enactment of this subsection. 

24 ‘‘(2) PUBLICATION OF INFORMATION RE25 PORTED.—The Secretary shall publish, and update 


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1 on an annual basis, the information submitted by 

2 hospitals under paragraph (1)(C)(i) on the public 

3 Internet website of the Centers for Medicare & Med4 icaid Services. 

5 ‘‘(3) EXCEPTION TO PROHIBITION ON EXPAN6 SION OF FACILITY CAPACITY.— 

7 ‘‘(A) PROCESS.— 

8 ‘‘(i) ESTABLISHMENT.—The Secretary 

9 shall establish and implement a process 

10 under which an applicable hospital (as de11 fined in subparagraph (E)) may apply for 

12 an exception from the requirement under 

13 paragraph (1)(B). 

14 ‘‘(ii) OPPORTUNITY FOR COMMUNITY

15 INPUT.—The process under clause (i) shall 

16 provide individuals and entities in the com17 munity in which the applicable hospital ap18 plying for an exception is located with the 

19 opportunity to provide input with respect 

20 to the application. 

21 ‘‘(iii) TIMING FOR IMPLEMENTA22 TION.—The Secretary shall implement the 

23 process under clause (i) on May 1, 2011. 

24 ‘‘(iv) REGULATIONS.—Not later than 

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1 gate regulations to carry out the process 

2 under clause (i). 

3 ‘‘(B) FREQUENCY.—The process described 

4 in subparagraph (A) shall permit an applicable 

5 hospital to apply for an exception up to once 

6 every 2 years. 

7 ‘‘(C) PERMITTED INCREASE.— 

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

9 (ii) and subparagraph (D), an applicable 

10 hospital granted an exception under the 

11 process described in subparagraph (A) may 

12 increase the number of operating rooms, 

13 procedure rooms, and beds for which the 

14 applicable hospital is licensed above the 

15 baseline number of operating rooms, proce16 dure rooms, and beds of the applicable 

17 hospital (or, if the applicable hospital has 

18 been granted a previous exception under 

19 this paragraph, above the number of oper20 ating rooms, procedure rooms, and beds 

21 for which the hospital is licensed after the 

22 application of the most recent increase 

23 under such an exception). 

24 ‘‘(ii) 100 PERCENT INCREASE LIMITA25 TION.—The Secretary shall not permit an 


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1 increase in the number of operating rooms, 

2 procedure rooms, and beds for which an 

3 applicable hospital is licensed under clause 

4 (i) to the extent such increase would result 

5 in the number of operating rooms, proce6 dure rooms, and beds for which the appli7 cable hospital is licensed exceeding 200 

8 percent of the baseline number of oper9 ating rooms, procedure rooms, and beds of 

10 the applicable hospital. 

11 ‘‘(iii) BASELINE NUMBER OF OPER12 ATING ROOMS, PROCEDURE ROOMS, AND

13 BEDS.—In this paragraph, the term ‘base14 line number of operating rooms, procedure 

15 rooms, and beds’ means the number of op16 erating rooms, procedure rooms, and beds 

17 for which the applicable hospital is licensed 

18 as of the date of enactment of this sub19 section. 

20 ‘‘(D) INCREASE LIMITED TO FACILITIES

21 ON THE MAIN CAMPUS OF THE HOSPITAL.— 

22 Any increase in the number of operating rooms, 

23 procedure rooms, and beds for which an appli24 cable hospital is licensed pursuant to this paraVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01222 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 graph may only occur in facilities on the main 

2 campus of the applicable hospital. 

3 ‘‘(E) APPLICABLE HOSPITAL.—In this 

4 paragraph, the term ‘applicable hospital’ means 

5 a hospital— 

6 ‘‘(i) that is located in a county in 

7 which the percentage increase in the popu8 lation during the most recent 5-year period 

9 (as of the date of the application under 

10 subparagraph (A)) is at least 150 percent 

11 of the percentage increase in the popu12 lation growth of the State in which the 

13 hospital is located during that period, as 

14 estimated by Bureau of the Census; 

15 ‘‘(ii) whose annual percent of total in16 patient admissions that represent inpatient 

17 admissions under the program under title 

18 XIX is equal to or greater than the aver19 age percent with respect to such admis20 sions for all hospitals located in the county 

21 in which the hospital is located; 

22 ‘‘(iii) that does not discriminate 

23 against beneficiaries of Federal health care 

24 programs and does not permit physicians 


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1 practicing at the hospital to discriminate 

2 against such beneficiaries; 

3 ‘‘(iv) that is located in a State in 

4 which the average bed capacity in the 

5 State is less than the national average bed 

6 capacity; and 

7 ‘‘(v) that has an average bed occu8 pancy rate that is greater than the average 

9 bed occupancy rate in the State in which 

10 the hospital is located. 

11 ‘‘(F) PROCEDURE ROOMS.—In this sub12 section, the term ‘procedure rooms’ includes 

13 rooms in which catheterizations, angiographies, 

14 angiograms, and endoscopies are performed, ex15 cept such term shall not include emergency 

16 rooms or departments (exclusive of rooms in 

17 which catheterizations, angiographies, 

18 angiograms, and endoscopies are performed). 

19 ‘‘(G) PUBLICATION OF FINAL DECI20 SIONS.—Not later than 60 days after receiving 

21 a complete application under this paragraph, 

22 the Secretary shall publish in the Federal Reg23 ister the final decision with respect to such ap24 plication. 


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1 ‘‘(H) LIMITATION ON REVIEW.—There 

2 shall be no administrative or judicial review 

3 under section 1869, section 1878, or otherwise 

4 of the process under this paragraph (including 

5 the establishment of such process). 

6 ‘‘(4) COLLECTION OF OWNERSHIP AND INVEST7 MENT INFORMATION.—For purposes of subpara8 graphs (A)(i) and (D)(i) of paragraph (1), the Sec9 retary shall collect physician ownership and invest10 ment information for each hospital. 

11 ‘‘(5) PHYSICIAN OWNER OR INVESTOR DE12 FINED.—For purposes of this subsection, the term 

13 ‘physician owner or investor’ means a physician (or 

14 an immediate family member of such physician) with 

15 a direct or an indirect ownership or investment in16 terest in the hospital. 

17 ‘‘(6) CLARIFICATION.—Nothing in this sub18 section shall be construed as preventing the Sec19 retary from revoking a hospital’s provider agreement 

20 if not in compliance with regulations implementing 

21 section 1866.’’. 

22 (b) ENFORCEMENT.— 

23 (1) ENSURING COMPLIANCE.—The Secretary of 

24 Health and Human Services shall establish policies 

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1 quirements described in subsection (i)(1) of section 

2 1877 of the Social Security Act, as added by sub3 section (a)(3), beginning on the date such require4 ments first apply. Such policies and procedures may 

5 include unannounced site reviews of hospitals. 

6 (2) AUDITS.—Beginning not later than August 

7 1, 2011, the Secretary of Health and Human Serv8 ices shall conduct audits to determine if hospitals 

9 violate the requirements referred to in paragraph 

10 (1). 

11 Subtitle B—Physician Ownership 

12 and Other Transparency 

13 SEC. 4101. TRANSPARENCY REPORTS AND REPORTING OF 

14 PHYSICIAN OWNERSHIP OR INVESTMENT IN15 TERESTS. 

16 Part A of title XI of the Social Security Act (42 

17 U.S.C. 1301 et seq.) is amended by inserting after section 

18 1128F the following new section: 

19 ‘‘SEC. 1128G. TRANSPARENCY REPORTS AND REPORTING 

20 OF PHYSICIAN OWNERSHIP OR INVESTMENT 

21 INTERESTS. 

22 ‘‘(a) TRANSPARENCY REPORTS.— 

23 ‘‘(1) PAYMENTS OR OTHER TRANSFERS OF

24 VALUE.— 


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1 ‘‘(A) IN GENERAL.—On March 31, 2012, 

2 and on the 90th day of each calendar year be3 ginning thereafter, any applicable manufacturer 

4 that provides a payment or other transfer of 

5 value to a covered recipient (or to an entity or 

6 individual at the request of or designated on be7 half of a covered recipient), shall submit to the 

8 Secretary, in such electronic form as the Sec9 retary shall require, the following information 

10 with respect to the preceding calendar year: 

11 ‘‘(i) The name of the covered recipi12 ent. 

13 ‘‘(ii) The business address of the cov14 ered recipient and, in the case of a covered 

15 recipient who is a physician, the specialty 

16 and National Provider Identifier of the 

17 covered recipient. 

18 ‘‘(iii) The amount of the payment or 

19 other transfer of value. 

20 ‘‘(iv) The dates on which the payment 

21 or other transfer of value was provided to 

22 the covered recipient. 

23 ‘‘(v) A description of the form of the 

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1 cated (as appropriate for all that apply) 

2 as— 

3 ‘‘(I) cash or a cash equivalent; 

4 ‘‘(II) in-kind items or services; 

5 ‘‘(III) stock, a stock option, or 

6 any other ownership interest, divi7 dend, profit, or other return on invest8 ment; or 

9 ‘‘(IV) any other form of payment 

10 or other transfer of value (as defined 

11 by the Secretary). 

12 ‘‘(vi) A description of the nature of 

13 the payment or other transfer of value, in14 dicated (as appropriate for all that apply) 

15 as— 

16 ‘‘(I) consulting fees; 

17 ‘‘(II) compensation for services 

18 other than consulting; 

19 ‘‘(III) honoraria; 

20 ‘‘(IV) gift; 

21 ‘‘(V) entertainment; 

22 ‘‘(VI) food; 

23 ‘‘(VII) travel (including the speci24 fied destinations); 

25 ‘‘(VIII) education; 


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1 ‘‘(IX) research; 

2 ‘‘(X) charitable contribution; 

3 ‘‘(XI) royalty or license; 

4 ‘‘(XII) current or prospective 

5 ownership or investment interest; 

6 ‘‘(XIII) direct compensation for 

7 serving as faculty or as a speaker for 

8 a medical education program; 

9 ‘‘(XIV) grant; or 

10 ‘‘(XV) any other nature of the 

11 payment or other transfer of value (as 

12 defined by the Secretary). 

13 ‘‘(vii) If the payment or other transfer 

14 of value is related to marketing, education, 

15 or research specific to a covered drug, de16 vice, biological, or medical supply, the 

17 name of that covered drug, device, biologi18 cal, or medical supply. 

19 ‘‘(viii) Any other categories of infor20 mation regarding the payment or other 

21 transfer of value the Secretary determines 

22 appropriate. 

23 ‘‘(B) SPECIAL RULE FOR CERTAIN PAY24 MENTS OR OTHER TRANSFERS OF VALUE.—In 

25 the case where an applicable manufacturer proVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01229 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 vides a payment or other transfer of value to an 

2 entity or individual at the request of or des3 ignated on behalf of a covered recipient, the ap4 plicable manufacturer shall disclose that pay5 ment or other transfer of value under the name 

6 of the covered recipient. 

7 ‘‘(2) PHYSICIAN OWNERSHIP.—In addition to 

8 the requirement under paragraph (1)(A), on March 

9 31, 2012, and on the 90th day of each calendar year 

10 beginning thereafter, any applicable manufacturer or 

11 applicable group purchasing organization shall sub12 mit to the Secretary, in such electronic form as the 

13 Secretary shall require, the following information re14 garding any ownership or investment interest (other 

15 than an ownership or investment interest in a pub16 licly traded security and mutual fund, as described 

17 in section 1877(c)) held by a physician (or an imme18 diate family member of such physician (as defined 

19 for purposes of section 1877(a))) in the applicable 

20 manufacturer or applicable group purchasing organi21 zation during the preceding year: 

22 ‘‘(A) The dollar amount invested by each 

23 physician holding such an ownership or invest24 ment interest. 


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1 ‘‘(B) The value and terms of each such 

2 ownership or investment interest. 

3 ‘‘(C) Any payment or other transfer of 

4 value provided to a physician holding such an 

5 ownership or investment interest (or to an enti6 ty or individual at the request of or designated 

7 on behalf of a physician holding such an owner8 ship or investment interest), including the infor9 mation described in clauses (i) through (viii) of 

10 paragraph (1)(A), except that in applying such 

11 clauses, ‘physician’ shall be substituted for ‘cov12 ered recipient’ each place it appears. 

13 ‘‘(D) Any other information regarding the 

14 ownership or investment interest the Secretary 

15 determines appropriate. 

16 ‘‘(b) PENALTIES FOR NONCOMPLIANCE.— 

17 ‘‘(1) FAILURE TO REPORT.— 

18 ‘‘(A) IN GENERAL.—Subject to subpara19 graph (B) except as provided in paragraph (2), 

20 any applicable manufacturer or applicable 

21 group purchasing organization that fails to sub22 mit information required under subsection (a) 

23 in a timely manner in accordance with rules or 

24 regulations promulgated to carry out such sub25 section, shall be subject to a civil money penalty 


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1 of not less than $1,000, but not more than 

2 $10,000, for each payment or other transfer of 

3 value or ownership or investment interest not 

4 reported as required under such subsection. 

5 Such penalty shall be imposed and collected in 

6 the same manner as civil money penalties under 

7 subsection (a) of section 1128A are imposed 

8 and collected under that section. 

9 ‘‘(B) LIMITATION.—The total amount of 

10 civil money penalties imposed under subpara11 graph (A) with respect to each annual submis12 sion of information under subsection (a) by an 

13 applicable manufacturer or applicable group 

14 purchasing organization shall not exceed 

15 $150,000. 

16 ‘‘(2) KNOWING FAILURE TO REPORT.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), any applicable manufacturer or ap19 plicable group purchasing organization that 

20 knowingly fails to submit information required 

21 under subsection (a) in a timely manner in ac22 cordance with rules or regulations promulgated 

23 to carry out such subsection, shall be subject to 

24 a civil money penalty of not less than $10,000, 

25 but not more than $100,000, for each payment 


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1 or other transfer of value or ownership or in2 vestment interest not reported as required 

3 under such subsection. Such penalty shall be 

4 imposed and collected in the same manner as 

5 civil money penalties under subsection (a) of 

6 section 1128A are imposed and collected under 

7 that section. 

8 ‘‘(B) LIMITATION.—The total amount of 

9 civil money penalties imposed under subpara10 graph (A) with respect to each annual submis11 sion of information under subsection (a) by an 

12 applicable manufacturer or applicable group 

13 purchasing organization shall not exceed 

14 $1,000,000. 

15 ‘‘(3) USE OF FUNDS.—Funds collected by the 

16 Secretary as a result of the imposition of a civil 

17 money penalty under this subsection shall be used to 

18 carry out this section. 

19 ‘‘(c) PROCEDURES FOR SUBMISSION OF INFORMA20 TION AND PUBLIC AVAILABILITY.— 

21 ‘‘(1) IN GENERAL.— 

22 ‘‘(A) ESTABLISHMENT.—Not later than 

23 October 1, 2010, the Secretary shall establish 

24 procedures— 


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1 ‘‘(i) for applicable manufacturers and 

2 applicable group purchasing organizations 

3 to submit information to the Secretary 

4 under subsection (a); and 

5 ‘‘(ii) for the Secretary to make such 

6 information submitted available to the pub7 lic. 

8 ‘‘(B) DEFINITION OF TERMS.—The proce9 dures established under subparagraph (A) shall 

10 provide for the definition of terms (other than 

11 those terms defined in subsection (e)), as ap12 propriate, for purposes of this section. 

13 ‘‘(C) PUBLIC AVAILABILITY.—Except as 

14 provided in subparagraph (E), the procedures 

15 established under subparagraph (A)(ii) shall en16 sure that, not later than September 30, 2012, 

17 and on June 30 of each calendar year beginning 

18 thereafter, the information submitted under 

19 subsection (a) with respect to the preceding cal20 endar year is made available through an Inter21 net website that— 

22 ‘‘(i) is searchable and is in a format 

23 that is clear and understandable; 

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1 ufacturer or applicable group purchasing 

2 organization, the name of the covered re3 cipient, the business address of the covered 

4 recipient, the specialty of the covered re5 cipient, the value of the payment or other 

6 transfer of value, the date on which the 

7 payment or other transfer of value was 

8 provided to the covered recipient, the form 

9 of the payment or other transfer of value, 

10 indicated (as appropriate) under subsection 

11 (a)(1)(A)(v), the nature of the payment or 

12 other transfer of value, indicated (as ap13 propriate) under subsection (a)(1)(A)(vi), 

14 and the name of the covered drug, device, 

15 biological, or medical supply, as applicable; 

16 ‘‘(iii) contains information that is able 

17 to be easily aggregated and downloaded; 

18 ‘‘(iv) contains a description of any en19 forcement actions taken to carry out this 

20 section, including any penalties imposed 

21 under subsection (b), during the preceding 

22 year; 

23 ‘‘(v) contains background information 

24 on industry-physician relationships; 


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1 ‘‘(vi) in the case of information sub2 mitted with respect to a payment or other 

3 transfer of value described in subpara4 graph (E)(i), lists such information sepa5 rately from the other information sub6 mitted under subsection (a) and designates 

7 such separately listed information as fund8 ing for clinical research; 

9 ‘‘(vii) contains any other information 

10 the Secretary determines would be helpful 

11 to the average consumer; 

12 ‘‘(viii) does not contain the National 

13 Provider Identifier of the covered recipient, 

14 and 

15 ‘‘(ix) subject to subparagraph (D), 

16 provides the applicable manufacturer, ap17 plicable group purchasing organization, or 

18 covered recipient an opportunity to review 

19 and submit corrections to the information 

20 submitted with respect to the applicable 

21 manufacturer, applicable group purchasing 

22 organization, or covered recipient, respec23 tively, for a period of not less than 45 days 

24 prior to such information being made 

25 available to the public. 


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1 ‘‘(D) CLARIFICATION OF TIME PERIOD FOR

2 REVIEW AND CORRECTIONS.—In no case may 

3 the 45-day period for review and submission of 

4 corrections to information under subparagraph 

5 (C)(ix) prevent such information from being 

6 made available to the public in accordance with 

7 the dates described in the matter preceding 

8 clause (i) in subparagraph (C). 

9 ‘‘(E) DELAYED PUBLICATION FOR PAY10 MENTS MADE PURSUANT TO PRODUCT RE11 SEARCH OR DEVELOPMENT AGREEMENTS AND

12 CLINICAL INVESTIGATIONS.— 

13 ‘‘(i) IN GENERAL.—In the case of in14 formation submitted under subsection (a) 

15 with respect to a payment or other transfer 

16 of value made to a covered recipient by an 

17 applicable manufacturer pursuant to a 

18 product research or development agree19 ment for services furnished in connection 

20 with research on a potential new medical 

21 technology or a new application of an ex22 isting medical technology or the develop23 ment of a new drug, device, biological, or 

24 medical supply, or by an applicable manu25 facturer in connection with a clinical invesVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01237 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tigation regarding a new drug, device, bio2 logical, or medical supply, the procedures 

3 established under subparagraph (A)(ii) 

4 shall provide that such information is 

5 made available to the public on the first 

6 date described in the matter preceding 

7 clause (i) in subparagraph (C) after the 

8 earlier of the following: 

9 ‘‘(I) The date of the approval or 

10 clearance of the covered drug, device, 

11 biological, or medical supply by the 

12 Food and Drug Administration. 

13 ‘‘(II) Four calendar years after 

14 the date such payment or other trans15 fer of value was made. 

16 ‘‘(ii) CONFIDENTIALITY OF INFORMA17 TION PRIOR TO PUBLICATION.—Informa18 tion described in clause (i) shall be consid19 ered confidential and shall not be subject 

20 to disclosure under section 552 of title 5, 

21 United States Code, or any other similar 

22 Federal, State, or local law, until on or 

23 after the date on which the information is 

24 made available to the public under such 

25 clause. 


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1 ‘‘(2) CONSULTATION.—In establishing the pro2 cedures under paragraph (1), the Secretary shall 

3 consult with the Inspector General of the Depart4 ment of Health and Human Services, affected indus5 try, consumers, consumer advocates, and other inter6 ested parties in order to ensure that the information 

7 made available to the public under such paragraph 

8 is presented in the appropriate overall context. 

9 ‘‘(d) ANNUAL REPORTS AND RELATION TO STATE

10 LAWS.— 

11 ‘‘(1) ANNUAL REPORT TO CONGRESS.—Not 

12 later than April 1 of each year beginning with 2012, 

13 the Secretary shall submit to Congress a report that 

14 includes the following: 

15 ‘‘(A) The information submitted under 

16 subsection (a) during the preceding year, aggre17 gated for each applicable manufacturer and ap18 plicable group purchasing organization that 

19 submitted such information during such year 

20 (except, in the case of information submitted 

21 with respect to a payment or other transfer of 

22 value described in subsection (c)(1)(E)(i), such 

23 information shall be included in the first report 

24 submitted to Congress after the date on which 


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1 such information is made available to the public 

2 under such subsection). 

3 ‘‘(B) A description of any enforcement ac4 tions taken to carry out this section, including 

5 any penalties imposed under subsection (b), 

6 during the preceding year. 

7 ‘‘(2) ANNUAL REPORTS TO STATES.—Not later 

8 than September 30, 2012 and on June 30 of each 

9 calendar year thereafter, the Secretary shall submit 

10 to States a report that includes a summary of the 

11 information submitted under subsection (a) during 

12 the preceding year with respect to covered recipients 

13 in the State (except, in the case of information sub14 mitted with respect to a payment or other transfer 

15 of value described in subsection (c)(1)(E)(i), such in16 formation shall be included in the first report sub17 mitted to States after the date on which such infor18 mation is made available to the public under such 

19 subsection). 

20 ‘‘(3) RELATION TO STATE LAWS.— 

21 ‘‘(A) IN GENERAL.—In the case of a pay22 ment or other transfer of value provided by an 

23 applicable manufacturer that is received by a 

24 covered recipient (as defined in subsection (e)) 

25 on or after January 1, 2011, subject to subVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01240 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 paragraph (B), the provisions of this section 

2 shall preempt any statute or regulation of a 

3 State or of a political subdivision of a State 

4 that requires an applicable manufacturer (as so 

5 defined) to disclose or report, in any format, 

6 the type of information (as described in sub7 section (a)) regarding such payment or other 

8 transfer of value. 

9 ‘‘(B) NO PREEMPTION OF ADDITIONAL RE10 QUIREMENTS.—Subparagraph (A) shall not 

11 preempt any statute or regulation of a State or 

12 of a political subdivision of a State that re13 quires the disclosure or reporting of informa14 tion— 

15 ‘‘(i) not of the type required to be dis16 closed or reported under this section; 

17 ‘‘(ii) described in subsection 

18 (e)(10)(B), except in the case of informa19 tion described in clause (i) of such sub20 section; 

21 ‘‘(iii) by any person or entity other 

22 than an applicable manufacturer (as so de23 fined) or a covered recipient (as defined in 

24 subsection (e)); or 


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1 ‘‘(iv) to a Federal, State, or local gov2 ernmental agency for public health surveil3 lance, investigation, or other public health 

4 purposes or health oversight purposes. 

5 ‘‘(C) Nothing in subparagraph (A) shall be 

6 construed to limit the discovery or admissibility 

7 of information described in such subparagraph 

8 in a criminal, civil, or administrative pro9 ceeding. 

10 ‘‘(4) CONSULTATION.—The Secretary shall con11 sult with the Inspector General of the Department 

12 of Health and Human Services on the implementa13 tion of this section. 

14 ‘‘(e) DEFINITIONS.—In this section: 

15 ‘‘(1) APPLICABLE GROUP PURCHASING ORGANI16 ZATION.—The term ‘applicable group purchasing or17 ganization’ means a group purchasing organization 

18 (as defined by the Secretary) that purchases, ar19 ranges for, or negotiates the purchase of a covered 

20 drug, device, biological, or medical supply which is 

21 operating in the United States, or in a territory, 

22 possession, or commonwealth of the United States. 

23 ‘‘(2) APPLICABLE MANUFACTURER.—The term 

24 ‘applicable manufacturer’ means a manufacturer of 

25 a covered drug, device, biological, or medical supply 


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1 which is operating in the United States, or in a ter2 ritory, possession, or commonwealth of the United 

3 States. 

4 ‘‘(3) CLINICAL INVESTIGATION.—The term 

5 ‘clinical investigation’ means any experiment involv6 ing 1 or more human subjects, or materials derived 

7 from human subjects, in which a drug or device is 

8 administered, dispensed, or used. 

9 ‘‘(4) COVERED DEVICE.—The term ‘covered de10 vice’ means any device for which payment is avail11 able under title XVIII or a State plan under title 

12 XIX or XXI (or a waiver of such a plan). 

13 ‘‘(5) COVERED DRUG, DEVICE, BIOLOGICAL, OR

14 MEDICAL SUPPLY.—The term ‘covered drug, device, 

15 biological, or medical supply’ means any drug, bio16 logical product, device, or medical supply for which 

17 payment is available under title XVIII or a State 

18 plan under title XIX or XXI (or a waiver of such 

19 a plan). 

20 ‘‘(6) COVERED RECIPIENT.— 

21 ‘‘(A) IN GENERAL.—Except as provided in 

22 subparagraph (B), the term ‘covered recipient’ 

23 means the following: 

24 ‘‘(i) A physician. 

25 ‘‘(ii) A teaching hospital. 


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1 ‘‘(B) EXCLUSION.—Such term does not in2 clude a physician who is an employee of the ap3 plicable manufacturer that is required to submit 

4 information under subsection (a). 

5 ‘‘(7) EMPLOYEE.—The term ‘employee’ has the 

6 meaning given such term in section 1877(h)(2). 

7 ‘‘(8) KNOWINGLY.—The term ‘knowingly’ has 

8 the meaning given such term in section 3729(b) of 

9 title 31, United States Code. 

10 ‘‘(9) MANUFACTURER OF A COVERED DRUG, 

11 DEVICE, BIOLOGICAL, OR MEDICAL SUPPLY.—The 

12 term ‘manufacturer of a covered drug, device, bio13 logical, or medical supply’ means any entity which is 

14 engaged in the production, preparation, propagation, 

15 compounding, or conversion of a covered drug, de16 vice, biological, or medical supply (or any entity 

17 under common ownership with such entity which 

18 provides assistance or support to such entity with re19 spect to the production, preparation, propagation, 

20 compounding, conversion, marketing, promotion, 

21 sale, or distribution of a covered drug, device, bio22 logical, or medical supply). 

23 ‘‘(10) PAYMENT OR OTHER TRANSFER OF

24 VALUE.— 


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1 ‘‘(A) IN GENERAL.—The term ‘payment or 

2 other transfer of value’ means a transfer of 

3 anything of value. Such term does not include 

4 a transfer of anything of value that is made in5 directly to a covered recipient through a third 

6 party in connection with an activity or service 

7 in the case where the applicable manufacturer 

8 is unaware of the identity of the covered recipi9 ent. 

10 ‘‘(B) EXCLUSIONS.—An applicable manu11 facturer shall not be required to submit infor12 mation under subsection (a) with respect to the 

13 following: 

14 ‘‘(i) A transfer of anything the value 

15 of which is less than $10, unless the aggre16 gate amount transferred to, requested by, 

17 or designated on behalf of the covered re18 cipient by the applicable manufacturer dur19 ing the calendar year exceeds $100. For 

20 calendar years after 2012, the dollar 

21 amounts specified in the preceding sen22 tence shall be increased by the same per23 centage as the percentage increase in the 

24 consumer price index for all urban con25 sumers (all items; U.S. city average) for 


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1 the 12-month period ending with June of 

2 the previous year. 

3 ‘‘(ii) Product samples that are not in4 tended to be sold and are intended for pa5 tient use. 

6 ‘‘(iii) Educational materials that di7 rectly benefit patients or are intended for 

8 patient use. 

9 ‘‘(iv) The loan of a covered device for 

10 a short-term trial period, not to exceed 90 

11 days, to permit evaluation of the covered 

12 device by the covered recipient. 

13 ‘‘(v) Items or services provided under 

14 a contractual warranty, including the re15 placement of a covered device, where the 

16 terms of the warranty are set forth in the 

17 purchase or lease agreement for the cov18 ered device. 

19 ‘‘(vi) A transfer of anything of value 

20 to a covered recipient when the covered re21 cipient is a patient and not acting in the 

22 professional capacity of a covered recipient. 

23 ‘‘(vii) Discounts (including rebates). 

24 ‘‘(viii) In-kind items used for the pro25 vision of charity care. 


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1 ‘‘(ix) A dividend or other profit dis2 tribution from, or ownership or investment 

3 interest in, a publicly traded security and 

4 mutual fund (as described in section 

5 1877(c)). 

6 ‘‘(x) In the case of an applicable man7 ufacturer who offers a self-insured plan, 

8 payments for the provision of health care 

9 to employees under the plan. 

10 ‘‘(xi) In the case of a covered recipi11 ent who is a licensed non-medical profes12 sional, a transfer of anything of value to 

13 the covered recipient if the transfer is pay14 ment solely for the non-medical profes15 sional services of such licensed non-medical 

16 professional. 

17 ‘‘(xii) In the case of a covered recipi18 ent who is a physician, a transfer of any19 thing of value to the covered recipient if 

20 the transfer is payment solely for the serv21 ices of the covered recipient with respect to 

22 a civil or criminal action or an administra23 tive proceeding. 

24 ‘‘(11) PHYSICIAN.—The term ‘physician’ has 

25 the meaning given that term in section 1861(r).’’. 


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1 SEC. 4102. DISCLOSURE REQUIREMENTS FOR IN-OFFICE 

2 ANCILLARY SERVICES EXCEPTION TO THE 

3 PROHIBITION ON PHYSICIAN SELF-REFER4 RAL FOR CERTAIN IMAGING SERVICES. 

5 (a) IN GENERAL.—Section 1877(b)(2) of the Social 

6 Security Act (42 U.S.C. 1395nn(b)(2)) is amended by 

7 adding at the end the following new sentence: ‘‘Such re8 quirements shall, with respect to magnetic resonance im9 aging, computed tomography, positron emission tomog10 raphy, and any other designated health services specified 

11 under subsection (h)(6)(D) that the Secretary determines 

12 appropriate, include a requirement that the referring phy13 sician inform the individual in writing at the time of the 

14 referral that the individual may obtain the services for 

15 which the individual is being referred from a person other 

16 than a person described in subparagraph (A)(i) and pro17 vide such individual with a written list of suppliers (as 

18 defined in section 1861(d)) who furnish such services in 

19 the area in which such individual resides.’’. 

20 (b) EFFECTIVE DATE.—The amendment made by 

21 this section shall apply to services furnished on or after 

22 January 1, 2010. 

23 SEC. 4103. PRESCRIPTION DRUG SAMPLE TRANSPARENCY. 

24 Part A of title XI of the Social Security Act (42 

25 U.S.C. 1301 et seq.), as amended by section 4101, is 


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1 amended by inserting after section 1128G the following 

2 new section: 

3 ‘‘SEC. 1128H. REPORTING OF INFORMATION RELATING TO 

4 DRUG SAMPLES. 

5 ‘‘(a) IN GENERAL.—Not later than April 1 of each 

6 year (beginning with 2012), each manufacturer and au7 thorized distributor of record of an applicable drug shall 

8 submit to the Secretary (in a form and manner specified 

9 by the Secretary) the following information with respect 

10 to the preceding year: 

11 ‘‘(1) In the case of a manufacturer or author12 ized distributor of record which makes distributions 

13 by mail or common carrier under subsection (d)(2) 

14 of section 503 of the Federal Food, Drug, and Cos15 metic Act (21 U.S.C. 353), the identity and quantity 

16 of drug samples requested and the identity and 

17 quantity of drug samples distributed under such 

18 subsection during that year, aggregated by— 

19 ‘‘(A) the name, address, professional des20 ignation, and signature of the practitioner mak21 ing the request under subparagraph (A)(i) of 

22 such subsection, or of any individual who makes 

23 or signs for the request on behalf of the practi24 tioner; and 


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1 ‘‘(B) any other category of information de2 termined appropriate by the Secretary. 

3 ‘‘(2) In the case of a manufacturer or author4 ized distributor of record which makes distributions 

5 by means other than mail or common carrier under 

6 subsection (d)(3) of such section 503, the identity 

7 and quantity of drug samples requested and the 

8 identity and quantity of drug samples distributed 

9 under such subsection during that year, aggregated 

10 by— 

11 ‘‘(A) the name, address, professional des12 ignation, and signature of the practitioner mak13 ing the request under subparagraph (A)(i) of 

14 such subsection, or of any individual who makes 

15 or signs for the request on behalf of the practi16 tioner; and 

17 ‘‘(B) any other category of information de18 termined appropriate by the Secretary. 

19 ‘‘(b) DEFINITIONS.—In this section: 

20 ‘‘(1) APPLICABLE DRUG.—The term ‘applicable 

21 drug’ means a drug— 

22 ‘‘(A) which is subject to subsection (b) of 

23 such section 503; and 


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1 ‘‘(B) for which payment is available under 

2 title XVIII or a State plan under title XIX or 

3 XXI (or a waiver of such a plan). 

4 ‘‘(2) AUTHORIZED DISTRIBUTOR OF RECORD.— 

5 The term ‘authorized distributor of record’ has the 

6 meaning given that term in subsection (e)(3)(A) of 

7 such section. 

8 ‘‘(3) MANUFACTURER.—The term ‘manufac9 turer’ has the meaning given that term for purposes 

10 of subsection (d) of such section.’’. 

11 Subtitle C—Nursing Home 

12 Transparency and Improvement 

13 PART I—IMPROVING TRANSPARENCY OF 

14 INFORMATION 

15 SEC. 4201. REQUIRED DISCLOSURE OF OWNERSHIP AND 

16 ADDITIONAL DISCLOSABLE PARTIES INFOR17 MATION. 

18 (a) IN GENERAL.—Section 1124 of the Social Secu19 rity Act (42 U.S.C. 1320a–3) is amended by adding at 

20 the end the following new subsection: 

21 ‘‘(c) REQUIRED DISCLOSURE OF OWNERSHIP AND

22 ADDITIONAL DISCLOSABLE PARTIES INFORMATION.— 

23 ‘‘(1) DISCLOSURE.—A facility shall have the in24 formation described in paragraph (2) available— 


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1 ‘‘(A) during the period beginning on the 

2 date of the enactment of this subsection and 

3 ending on the date such information is made 

4 available to the public under section 4201(b) of 

5 the America’s Healthy Future Act of 2009 for 

6 submission to the Secretary, the Inspector Gen7 eral of the Department of Health and Human 

8 Services, the State in which the facility is lo9 cated, and the State long-term care ombudsman 

10 in the case where the Secretary, the Inspector 

11 General, the State, or the State long-term care 

12 ombudsman requests such information; and 

13 ‘‘(B) beginning on the effective date of the 

14 final regulations promulgated under paragraph 

15 (3)(A), for reporting such information in ac16 cordance with such final regulations. 

17 Nothing in subparagraph (A) shall be construed as 

18 authorizing a facility to dispose of or delete informa19 tion described in such subparagraph after the effec20 tive date of the final regulations promulgated under 

21 paragraph (3)(A). 

22 ‘‘(2) INFORMATION DESCRIBED.— 

23 ‘‘(A) IN GENERAL.—The following infor24 mation is described in this paragraph: 


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1 ‘‘(i) The information described in sub2 sections (a) and (b), subject to subpara3 graph (C). 

4 ‘‘(ii) The identity of and information 

5 on— 

6 ‘‘(I) each member of the gov7 erning body of the facility, including 

8 the name, title, and period of service 

9 of each such member; 

10 ‘‘(II) each person or entity who is 

11 an officer, director, member, partner, 

12 trustee, or managing employee of the 

13 facility, including the name, title, and 

14 period of service of each such person 

15 or entity; and 

16 ‘‘(III) each person or entity who 

17 is an additional disclosable party of 

18 the facility. 

19 ‘‘(iii) The organizational structure of 

20 each additional disclosable party of the fa21 cility and a description of the relationship 

22 of each such additional disclosable party to 

23 the facility and to one another. 

24 ‘‘(B) SPECIAL RULE WHERE INFORMATION

25 IS ALREADY REPORTED OR SUBMITTED.—To 


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1 the extent that information reported by a facil2 ity to the Internal Revenue Service on Form 

3 990, information submitted by a facility to the 

4 Securities and Exchange Commission, or infor5 mation otherwise submitted to the Secretary or 

6 any other Federal agency contains the informa7 tion described in clauses (i), (ii), or (iii) of sub8 paragraph (A), the facility may provide such 

9 Form or such information submitted to meet 

10 the requirements of paragraph (1). 

11 ‘‘(C) SPECIAL RULE.—In applying sub12 paragraph (A)(i)— 

13 ‘‘(i) with respect to subsections (a) 

14 and (b), ‘ownership or control interest’ 

15 shall include direct or indirect interests, in16 cluding such interests in intermediate enti17 ties; and 

18 ‘‘(ii) subsection (a)(3)(A)(ii) shall in19 clude the owner of a whole or part interest 

20 in any mortgage, deed of trust, note, or 

21 other obligation secured, in whole or in 

22 part, by the entity or any of the property 

23 or assets thereof, if the interest is equal to 

24 or exceeds 5 percent of the total property 

25 or assets of the entirety. 


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1 ‘‘(3) REPORTING.— 

2 ‘‘(A) IN GENERAL.—Not later than the 

3 date that is 2 years after the date of the enact4 ment of this subsection, the Secretary shall pro5 mulgate final regulations requiring, effective on 

6 the date that is 90 days after the date on which 

7 such final regulations are published in the Fed8 eral Register, a facility to report the informa9 tion described in paragraph (2) to the Secretary 

10 in a standardized format, and such other regu11 lations as are necessary to carry out this sub12 section. Such final regulations shall ensure that 

13 the facility certifies, as a condition of participa14 tion and payment under the program under 

15 title XVIII or XIX, that the information re16 ported by the facility in accordance with such 

17 final regulations is, to the maximum extent 

18 practicable (as determined by the facility), ac19 curate and current. 

20 ‘‘(B) GUIDANCE.—The Secretary shall pro21 vide guidance and technical assistance to States 

22 on how to adopt the standardized format under 

23 subparagraph (A). 

24 ‘‘(4) NO EFFECT ON EXISTING REPORTING RE25 QUIREMENTS.—Nothing in this subsection shall reVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01255 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 duce, diminish, or alter any reporting requirement 

2 for a facility that is in effect as of the date of the 

3 enactment of this subsection. 

4 ‘‘(5) DEFINITIONS.—In this subsection: 

5 ‘‘(A) ADDITIONAL DISCLOSABLE PARTY.— 

6 The term ‘additional disclosable party’ means, 

7 with respect to a facility, any person or entity 

8 who— 

9 ‘‘(i) exercises operational, financial, or 

10 managerial control over the facility or a 

11 part thereof, or provides policies or proce12 dures for any of the operations of the facil13 ity, or provides financial or cash manage14 ment services to the facility; 

15 ‘‘(ii) leases or subleases real property 

16 to the facility, or owns a whole or part in17 terest equal to or exceeding 5 percent of 

18 the total value of such real property; or 

19 ‘‘(iii) provides management or admin20 istrative services, management or clinical 

21 consulting services, or accounting or finan22 cial services to the facility. 

23 ‘‘(B) FACILITY.—The term ‘facility’ means 

24 a disclosing entity which is— 


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1 ‘‘(i) a skilled nursing facility (as de2 fined in section 1819(a)); or 

3 ‘‘(ii) a nursing facility (as defined in 

4 section 1919(a)). 

5 ‘‘(C) MANAGING EMPLOYEE.—The term 

6 ‘managing employee’ means, with respect to a 

7 facility, an individual (including a general man8 ager, business manager, administrator, director, 

9 or consultant) who directly or indirectly man10 ages, advises, or supervises any element of the 

11 practices, finances, or operations of the facility. 

12 ‘‘(D) ORGANIZATIONAL STRUCTURE.—The 

13 term ‘organizational structure’ means, in the 

14 case of— 

15 ‘‘(i) a corporation, the officers, direc16 tors, and shareholders of the corporation 

17 who have an ownership interest in the cor18 poration which is equal to or exceeds 5 

19 percent; 

20 ‘‘(ii) a limited liability company, the 

21 members and managers of the limited li22 ability company (including, as applicable, 

23 what percentage each member and man24 ager has of the ownership interest in the 

25 limited liability company); 


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1 ‘‘(iii) a general partnership, the part2 ners of the general partnership; 

3 ‘‘(iv) a limited partnership, the gen4 eral partners and any limited partners of 

5 the limited partnership who have an own6 ership interest in the limited partnership 

7 which is equal to or exceeds 10 percent; 

8 ‘‘(v) a trust, the trustees of the trust; 

9 ‘‘(vi) an individual, contact informa10 tion for the individual; and 

11 ‘‘(vii) any other person or entity, such 

12 information as the Secretary determines 

13 appropriate.’’. 

14 (b) PUBLIC AVAILABILITY OF INFORMATION.—Not 

15 later than the date that is 1 year after the date on which 

16 the final regulations promulgated under section 

17 1124(c)(3)(A) of the Social Security Act, as added by sub18 section (a), are published in the Federal Register, the Sec19 retary of Health and Human Services shall make the in20 formation reported in accordance with such final regula21 tions available to the public in accordance with procedures 

22 established by the Secretary. 

23 (c) CONFORMING AMENDMENTS.— 

24 (1) IN GENERAL.— 


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1 (A) SKILLED NURSING FACILITIES.—Sec2 tion 1819(d)(1) of the Social Security Act (42 

3 U.S.C. 1395i–3(d)(1)) is amended by striking 

4 subparagraph (B) and redesignating subpara5 graph (C) as subparagraph (B). 

6 (B) NURSING FACILITIES.—Section 

7 1919(d)(1) of the Social Security Act (42 

8 U.S.C. 1396r(d)(1)) is amended by striking 

9 subparagraph (B) and redesignating subpara10 graph (C) as subparagraph (B). 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by paragraph (1) shall take effect on the date on 

13 which the Secretary makes the information described 

14 in subsection (b)(1) available to the public under 

15 such subsection. 

16 SEC. 4202. ACCOUNTABILITY REQUIREMENTS FOR SKILLED 

17 NURSING FACILITIES AND NURSING FACILI18 TIES. 

19 Part A of title XI of the Social Security Act (42 

20 U.S.C. 1301 et seq.), as amended by section 4103, is 

21 amended by inserting after section 1128H the following 

22 new section: 


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1 ‘‘SEC. 1128I. ACCOUNTABILITY REQUIREMENTS FOR FACILI2 TIES. 

3 ‘‘(a) DEFINITION OF FACILITY.—In this section, the 

4 term ‘facility’ means— 

5 ‘‘(1) a skilled nursing facility (as defined in sec6 tion 1819(a)); or 

7 ‘‘(2) a nursing facility (as defined in section 

8 1919(a)). 

9 ‘‘(b) EFFECTIVE COMPLIANCE AND ETHICS PRO10 GRAMS.— 

11 ‘‘(1) REQUIREMENT.—On or after the date that 

12 is 36 months after the date of the enactment of this 

13 section, a facility shall, with respect to the entity 

14 that operates the facility (in this subparagraph re15 ferred to as the ‘operating organization’ or ‘organi16 zation’), have in operation a compliance and ethics 

17 program that is effective in preventing and detecting 

18 criminal, civil, and administrative violations under 

19 this Act and in promoting quality of care consistent 

20 with regulations developed under paragraph (2). 

21 ‘‘(2) DEVELOPMENT OF REGULATIONS.— 

22 ‘‘(A) IN GENERAL.—Not later than the 

23 date that is 2 years after such date of the en24 actment, the Secretary, working jointly with the 

25 Inspector General of the Department of Health 

26 and Human Services, shall promulgate regulaVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01260 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 tions for an effective compliance and ethics pro2 gram for operating organizations, which may 

3 include a model compliance program. 

4 ‘‘(B) DESIGN OF REGULATIONS.—Such 

5 regulations with respect to specific elements or 

6 formality of a program may vary with the size 

7 of the organization, such that larger organiza8 tions should have a more formal program and 

9 include established written policies defining the 

10 standards and procedures to be followed by its 

11 employees. Such requirements may specifically 

12 apply to the corporate level management of 

13 multi unit nursing home chains. 

14 ‘‘(C) EVALUATION.—Not later than 3 

15 years after the date of the promulgation of reg16 ulations under this paragraph, the Secretary 

17 shall complete an evaluation of the compliance 

18 and ethics programs required to be established 

19 under this subsection. Such evaluation shall de20 termine if such programs led to changes in defi21 ciency citations, changes in quality perform22 ance, or changes in other metrics of patient 

23 quality of care. The Secretary shall submit to 

24 Congress a report on such evaluation and shall 

25 include in such report such recommendations 


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1 regarding changes in the requirements for such 

2 programs as the Secretary determines appro3 priate. 

4 ‘‘(3) REQUIREMENTS FOR COMPLIANCE AND

5 ETHICS PROGRAMS.—In this subsection, the term 

6 ‘compliance and ethics program’ means, with respect 

7 to a facility, a program of the operating organization 

8 that— 

9 ‘‘(A) has been reasonably designed, imple10 mented, and enforced so that it generally will be 

11 effective in preventing and detecting criminal, 

12 civil, and administrative violations under this 

13 Act and in promoting quality of care; and 

14 ‘‘(B) includes at least the required compo15 nents specified in paragraph (4). 

16 ‘‘(4) REQUIRED COMPONENTS OF PROGRAM.— 

17 The required components of a compliance and ethics 

18 program of an operating organization are the fol19 lowing: 

20 ‘‘(A) The organization must have estab21 lished compliance standards and procedures to 

22 be followed by its employees and other agents 

23 that are reasonably capable of reducing the 

24 prospect of criminal, civil, and administrative 

25 violations under this Act. 


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1 ‘‘(B) Specific individuals within high-level 

2 personnel of the organization must have been 

3 assigned overall responsibility to oversee compli4 ance with such standards and procedures and 

5 have sufficient resources and authority to as6 sure such compliance. 

7 ‘‘(C) The organization must have used due 

8 care not to delegate substantial discretionary 

9 authority to individuals whom the organization 

10 knew, or should have known through the exer11 cise of due diligence, had a propensity to en12 gage in criminal, civil, and administrative viola13 tions under this Act. 

14 ‘‘(D) The organization must have taken 

15 steps to communicate effectively its standards 

16 and procedures to all employees and other 

17 agents, such as by requiring participation in 

18 training programs or by disseminating publica19 tions that explain in a practical manner what is 

20 required. 

21 ‘‘(E) The organization must have taken 

22 reasonable steps to achieve compliance with its 

23 standards, such as by utilizing monitoring and 

24 auditing systems reasonably designed to detect 

25 criminal, civil, and administrative violations 


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1 under this Act by its employees and other 

2 agents and by having in place and publicizing 

3 a reporting system whereby employees and 

4 other agents could report violations by others 

5 within the organization without fear of retribu6 tion. 

7 ‘‘(F) The standards must have been con8 sistently enforced through appropriate discipli9 nary mechanisms, including, as appropriate, 

10 discipline of individuals responsible for the fail11 ure to detect an offense. 

12 ‘‘(G) After an offense has been detected, 

13 the organization must have taken all reasonable 

14 steps to respond appropriately to the offense 

15 and to prevent further similar offenses, includ16 ing any necessary modification to its program 

17 to prevent and detect criminal, civil, and admin18 istrative violations under this Act. 

19 ‘‘(H) The organization must periodically 

20 undertake reassessment of its compliance pro21 gram to identify changes necessary to reflect 

22 changes within the organization and its facili23 ties. 

24 ‘‘(c) QUALITY ASSURANCE AND PERFORMANCE IM25 PROVEMENT PROGRAM.— 


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1 ‘‘(1) IN GENERAL.—Not later than December 

2 31, 2011, the Secretary shall establish and imple3 ment a quality assurance and performance improve4 ment program (in this subparagraph referred to as 

5 the ‘QAPI program’) for facilities, including multi 

6 unit chains of facilities. Under the QAPI program, 

7 the Secretary shall establish standards relating to 

8 quality assurance and performance improvement 

9 with respect to facilities and provide technical assist10 ance to facilities on the development of best prac11 tices in order to meet such standards. Not later than 

12 1 year after the date on which the regulations are 

13 promulgated under paragraph (2), a facility must 

14 submit to the Secretary a plan for the facility to 

15 meet such standards and implement such best prac16 tices, including how to coordinate the implementa17 tion of such plan with quality assessment and assur18 ance activities conducted under sections 

19 1819(b)(1)(B) and 1919(b)(1)(B), as applicable. 

20 ‘‘(2) REGULATIONS.—The Secretary shall pro21 mulgate regulations to carry out this subsection.’’. 

22 SEC. 4203. NURSING HOME COMPARE MEDICARE WEBSITE. 

23 (a) SKILLED NURSING FACILITIES.— 

24 (1) IN GENERAL.—Section 1819 of the Social 

25 Security Act (42 U.S.C. 1395i–3) is amended— 


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1 (A) by redesignating subsection (i) as sub2 section (j); and 

3 (B) by inserting after subsection (h) the 

4 following new subsection: 

5 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

6 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA7 TION.— 

8 ‘‘(A) IN GENERAL.—The Secretary shall 

9 ensure that the Department of Health and 

10 Human Services includes, as part of the infor11 mation provided for comparison of nursing 

12 homes on the official Internet website of the 

13 Federal Government for Medicare beneficiaries 

14 (commonly referred to as the ‘Nursing Home 

15 Compare’ Medicare website) (or a successor 

16 website), the following information in a manner 

17 that is prominent, easily accessible, readily un18 derstandable to consumers of long-term care 

19 services, and searchable: 

20 ‘‘(i) Information that is reported to 

21 the Secretary under section 1124(c)(3). 

22 ‘‘(ii) Information on the ‘Special 

23 Focus Facility program’ (or a successor 

24 program) established by the Centers for 

25 Medicare and Medicaid Services, according 


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1 to procedures established by the Secretary. 

2 Such procedures shall provide for the in3 clusion of information with respect to, and 

4 the names and locations of, those facilities 

5 that, since the previous quarter— 

6 ‘‘(I) were newly enrolled in the 

7 program; 

8 ‘‘(II) are enrolled in the program 

9 and have failed to significantly im10 prove; 

11 ‘‘(III) are enrolled in the pro12 gram and have significantly improved; 

13 ‘‘(IV) have graduated from the 

14 program; and 

15 ‘‘(V) have closed voluntarily or 

16 no longer participate under this title. 

17 ‘‘(iii) Staffing data for each facility 

18 (including resident census data and data 

19 on the hours of care provided per resident 

20 per day) based on data submitted under 

21 section 1128I(g), including information on 

22 staffing turnover and tenure, in a format 

23 that is clearly understandable to con24 sumers of long-term care services and al25 lows such consumers to compare difVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01267 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ferences in staffing between facilities and 

2 State and national averages for the facili3 ties. Such format shall include— 

4 ‘‘(I) concise explanations of how 

5 to interpret the data (such as a plain 

6 English explanation of data reflecting 

7 ‘nursing home staff hours per resident 

8 day’); 

9 ‘‘(II) differences in types of staff 

10 (such as training associated with dif11 ferent categories of staff); 

12 ‘‘(III) the relationship between 

13 nurse staffing levels and quality of 

14 care; and 

15 ‘‘(IV) an explanation that appro16 priate staffing levels vary based on 

17 patient case mix. 

18 ‘‘(iv) Links to State Internet websites 

19 with information regarding State survey 

20 and certification programs, links to Form 

21 2567 State inspection reports (or a suc22 cessor form) on such websites, information 

23 to guide consumers in how to interpret and 

24 understand such reports, and the facility 


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1 plan of correction or other response to 

2 such report. 

3 ‘‘(v) The standardized complaint form 

4 developed under section 1128I(f), including 

5 explanatory material on what complaint 

6 forms are, how they are used, and how to 

7 file a complaint with the State survey and 

8 certification program and the State long9 term care ombudsman program. 

10 ‘‘(vi) Summary information on the 

11 number, type, severity, and outcome of 

12 substantiated complaints. 

13 ‘‘(vii) The number of adjudicated in14 stances of criminal violations by a facility 

15 or the employees of a facility— 

16 ‘‘(I) that were committed inside 

17 the facility; 

18 ‘‘(II) with respect to such in19 stances of violations or crimes com20 mitted inside of the facility that were 

21 the violations or crimes of abuse, ne22 glect, and exploitation, criminal sexual 

23 abuse, or other violations or crimes 

24 that resulted in serious bodily injury; 

25 and 


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1 ‘‘(III) the number of civil mone2 tary penalties levied against the facil3 ity, employees, contractors, and other 

4 agents. 

5 ‘‘(B) DEADLINE FOR PROVISION OF INFOR6 MATION.— 

7 ‘‘(i) IN GENERAL.—Except as pro8 vided in clause (ii), the Secretary shall en9 sure that the information described in sub10 paragraph (A) is included on such website 

11 (or a successor website) not later than 1 

12 year after the date of the enactment of this 

13 subsection. 

14 ‘‘(ii) EXCEPTION.—The Secretary 

15 shall ensure that the information described 

16 in subparagraph (A)(i) and (A)(iii) is in17 cluded on such website (or a successor 

18 website) not later than the date on which 

19 the requirements under section 1124(c)(3) 

20 and section 1128I(g) are implemented. 

21 ‘‘(2) REVIEW AND MODIFICATION OF

22 WEBSITE.— 

23 ‘‘(A) IN GENERAL.—The Secretary shall 

24 establish a process— 


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1 ‘‘(i) to review the accuracy, clarity of 

2 presentation, timeliness, and comprehen3 siveness of information reported on such 

4 website as of the day before the date of the 

5 enactment of this subsection; and 

6 ‘‘(ii) not later than 1 year after the 

7 date of the enactment of this subsection, to 

8 modify or revamp such website in accord9 ance with the review conducted under 

10 clause (i). 

11 ‘‘(B) CONSULTATION.—In conducting the 

12 review under subparagraph (A)(i), the Sec13 retary shall consult with— 

14 ‘‘(i) State long-term care ombudsman 

15 programs; 

16 ‘‘(ii) consumer advocacy groups; 

17 ‘‘(iii) provider stakeholder groups; and 

18 ‘‘(iv) any other representatives of pro19 grams or groups the Secretary determines 

20 appropriate.’’. 

21 (2) TIMELINESS OF SUBMISSION OF SURVEY

22 AND CERTIFICATION INFORMATION.— 

23 (A) IN GENERAL.—Section 1819(g)(5) of 

24 the Social Security Act (42 U.S.C. 1395i– 


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1 3(g)(5)) is amended by adding at the end the 

2 following new subparagraph: 

3 ‘‘(E) SUBMISSION OF SURVEY AND CER4 TIFICATION INFORMATION TO THE SEC5 RETARY.—In order to improve the timeliness of 

6 information made available to the public under 

7 subparagraph (A) and provided on the Nursing 

8 Home Compare Medicare website under sub9 section (i), each State shall submit information 

10 respecting any survey or certification made re11 specting a skilled nursing facility (including any 

12 enforcement actions taken by the State) to the 

13 Secretary not later than the date on which the 

14 State sends such information to the facility. 

15 The Secretary shall use the information sub16 mitted under the preceding sentence to update 

17 the information provided on the Nursing Home 

18 Compare Medicare website as expeditiously as 

19 practicable but not less frequently than quar20 terly.’’. 

21 (B) EFFECTIVE DATE.—The amendment 

22 made by this paragraph shall take effect 1 year 

23 after the date of the enactment of this Act. 


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1 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec2 tion 1819(f) of such Act is amended by adding at 

3 the end the following new paragraph: 

4 ‘‘(8) SPECIAL FOCUS FACILITY PROGRAM.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 conduct a special focus facility program for en7 forcement of requirements for skilled nursing 

8 facilities that the Secretary has identified as 

9 having substantially failed to meet applicable 

10 requirement of this Act. 

11 ‘‘(B) PERIODIC SURVEYS.—Under such 

12 program the Secretary shall conduct surveys of 

13 each facility in the program not less than once 

14 every 6 months.’’. 

15 (b) NURSING FACILITIES.— 

16 (1) IN GENERAL.—Section 1919 of the Social 

17 Security Act (42 U.S.C. 1396r) is amended— 

18 (A) by redesignating subsection (i) as sub19 section (j); and 

20 (B) by inserting after subsection (h) the 

21 following new subsection: 

22 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

23 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA24 TION.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 ensure that the Department of Health and 

3 Human Services includes, as part of the infor4 mation provided for comparison of nursing 

5 homes on the official Internet website of the 

6 Federal Government for Medicare beneficiaries 

7 (commonly referred to as the ‘Nursing Home 

8 Compare’ Medicare website) (or a successor 

9 website), the following information in a manner 

10 that is prominent, easily accessible, readily un11 derstandable to consumers of long-term care 

12 services, and searchable: 

13 ‘‘(i) Staffing data for each facility (in14 cluding resident census data and data on 

15 the hours of care provided per resident per 

16 day) based on data submitted under sec17 tion 1128I(g), including information on 

18 staffing turnover and tenure, in a format 

19 that is clearly understandable to con20 sumers of long-term care services and al21 lows such consumers to compare dif22 ferences in staffing between facilities and 

23 State and national averages for the facili24 ties. Such format shall include— 


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1 ‘‘(I) concise explanations of how 

2 to interpret the data (such as plain 

3 English explanation of data reflecting 

4 ‘nursing home staff hours per resident 

5 day’); 

6 ‘‘(II) differences in types of staff 

7 (such as training associated with dif8 ferent categories of staff); 

9 ‘‘(III) the relationship between 

10 nurse staffing levels and quality of 

11 care; and 

12 ‘‘(IV) an explanation that appro13 priate staffing levels vary based on 

14 patient case mix. 

15 ‘‘(ii) Links to State Internet websites 

16 with information regarding State survey 

17 and certification programs, links to Form 

18 2567 State inspection reports (or a suc19 cessor form) on such websites, information 

20 to guide consumers in how to interpret and 

21 understand such reports, and the facility 

22 plan of correction or other response to 

23 such report. 

24 ‘‘(iii) The standardized complaint 

25 form developed under section 1128I(f), inVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01275 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 cluding explanatory material on what com2 plaint forms are, how they are used, and 

3 how to file a complaint with the State sur4 vey and certification program and the 

5 State long-term care ombudsman program. 

6 ‘‘(iv) Summary information on the 

7 number, type, severity, and outcome of 

8 substantiated complaints. 

9 ‘‘(v) The number of adjudicated in10 stances of criminal violations by a facility 

11 or the employees of a facility— 

12 ‘‘(I) that were committed inside 

13 of the facility; and 

14 ‘‘(II) with respect to such in15 stances of violations or crimes com16 mitted outside of the facility, that 

17 were violations or crimes that resulted 

18 in the serious bodily injury of an 

19 elder. 

20 ‘‘(B) DEADLINE FOR PROVISION OF INFOR21 MATION.— 

22 ‘‘(i) IN GENERAL.—Except as pro23 vided in clause (ii), the Secretary shall en24 sure that the information described in sub25 paragraph (A) is included on such website 


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1 (or a successor website) not later than 1 

2 year after the date of the enactment of this 

3 subsection. 

4 ‘‘(ii) EXCEPTION.—The Secretary 

5 shall ensure that the information described 

6 in subparagraph (A)(i) is included on such 

7 website (or a successor website) not later 

8 than the date on which the requirements 

9 under section 1128I(g) are implemented. 

10 ‘‘(2) REVIEW AND MODIFICATION OF

11 WEBSITE.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 establish a process— 

14 ‘‘(i) to review the accuracy, clarity of 

15 presentation, timeliness, and comprehen16 siveness of information reported on such 

17 website as of the day before the date of the 

18 enactment of this subsection; and 

19 ‘‘(ii) not later than 1 year after the 

20 date of the enactment of this subsection, to 

21 modify or revamp such website in accord22 ance with the review conducted under 

23 clause (i). 


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1 ‘‘(B) CONSULTATION.—In conducting the 

2 review under subparagraph (A)(i), the Sec3 retary shall consult with— 

4 ‘‘(i) State long-term care ombudsman 

5 programs; 

6 ‘‘(ii) consumer advocacy groups; 

7 ‘‘(iii) provider stakeholder groups; 

8 ‘‘(iv) skilled nursing facility employees 

9 and their representatives; and 

10 ‘‘(v) any other representatives of pro11 grams or groups the Secretary determines 

12 appropriate.’’. 

13 (2) TIMELINESS OF SUBMISSION OF SURVEY

14 AND CERTIFICATION INFORMATION.— 

15 (A) IN GENERAL.—Section 1919(g)(5) of 

16 the Social Security Act (42 U.S.C. 1396r(g)(5)) 

17 is amended by adding at the end the following 

18 new subparagraph: 

19 ‘‘(E) SUBMISSION OF SURVEY AND CER20 TIFICATION INFORMATION TO THE SEC21 RETARY.—In order to improve the timeliness of 

22 information made available to the public under 

23 subparagraph (A) and provided on the Nursing 

24 Home Compare Medicare website under sub25 section (i), each State shall submit information 


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1 respecting any survey or certification made re2 specting a nursing facility (including any en3 forcement actions taken by the State) to the 

4 Secretary not later than the date on which the 

5 State sends such information to the facility. 

6 The Secretary shall use the information sub7 mitted under the preceding sentence to update 

8 the information provided on the Nursing Home 

9 Compare Medicare website as expeditiously as 

10 practicable but not less frequently than quar11 terly.’’. 

12 (B) EFFECTIVE DATE.—The amendment 

13 made by this paragraph shall take effect 1 year 

14 after the date of the enactment of this Act. 

15 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec16 tion 1919(f) of such Act is amended by adding at 

17 the end of the following new paragraph: 

18 ‘‘(10) SPECIAL FOCUS FACILITY PROGRAM.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 conduct a special focus facility program for en21 forcement of requirements for nursing facilities 

22 that the Secretary has identified as having sub23 stantially failed to meet applicable requirements 

24 of this Act. 


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1 ‘‘(B) PERIODIC SURVEYS.—Under such 

2 program the Secretary shall conduct surveys of 

3 each facility in the program not less often than 

4 once every 6 months.’’. 

5 (c) AVAILABILITY OF REPORTS ON SURVEYS, CER6 TIFICATIONS, AND COMPLAINT INVESTIGATIONS.— 

7 (1) SKILLED NURSING FACILITIES.—Section 

8 1819(d)(1) of the Social Security Act (42 U.S.C. 

9 1395i–3(d)(1)), as amended by section 4201, is 

10 amended by adding at the end the following new 

11 subparagraph: 

12 ‘‘(C) AVAILABILITY OF SURVEY, CERTIFI13 CATION, AND COMPLAINT INVESTIGATION RE14 PORTS.—A skilled nursing facility must— 

15 ‘‘(i) have reports with respect to any 

16 surveys, certifications, and complaint in17 vestigations made respecting the facility 

18 during the 3 preceding years available for 

19 any individual to review upon request; and 

20 ‘‘(ii) post notice of the availability of 

21 such reports in areas of the facility that 

22 are prominent and accessible to the public. 

23 The facility shall not make available under 

24 clause (i) identifying information about com25 plainants or residents.’’. 


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1 (2) NURSING FACILITIES.—Section 1919(d)(1) 

2 of the Social Security Act (42 U.S.C. 1396r(d)(1)), 

3 as amended by section 4201, is amended by adding 

4 at the end the following new subparagraph: 

5 ‘‘(V) AVAILABILITY OF SURVEY, CERTIFI6 CATION, AND COMPLAINT INVESTIGATION RE7 PORTS.—A nursing facility must— 

8 ‘‘(i) have reports with respect to any 

9 surveys, certifications, and complaint in10 vestigations made respecting the facility 

11 during the 3 preceding years available for 

12 any individual to review upon request; and 

13 ‘‘(ii) post notice of the availability of 

14 such reports in areas of the facility that 

15 are prominent and accessible to the public. 

16 The facility shall not make available under 

17 clause (i) identifying information about com18 plainants or residents.’’. 

19 (3) EFFECTIVE DATE.—The amendments made 

20 by this subsection shall take effect 1 year after the 

21 date of the enactment of this Act. 

22 (d) GUIDANCE TO STATES ON FORM 2567 STATE IN23 SPECTION REPORTS AND COMPLAINT INVESTIGATION RE24 PORTS.— 


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1 (1) GUIDANCE.—The Secretary of Health and 

2 Human Services (in this subtitle referred to as the 

3 ‘‘Secretary’’) shall provide guidance to States on 

4 how States can establish electronic links to Form 

5 2567 State inspection reports (or a successor form), 

6 complaint investigation reports, and a facility’s plan 

7 of correction or other response to such Form 2567 

8 State inspection reports (or a successor form) on the 

9 Internet website of the State that provides informa10 tion on skilled nursing facilities and nursing facili11 ties and the Secretary shall, if possible, include such 

12 information on Nursing Home Compare. 

13 (2) REQUIREMENT.—Section 1902(a)(9) of the 

14 Social Security Act (42 U.S.C. 1396a(a)(9)) is 

15 amended— 

16 (A) by striking ‘‘and’’ at the end of sub17 paragraph (B); 

18 (B) by striking the semicolon at the end of 

19 subparagraph (C) and inserting ‘‘, and’’; and 

20 (C) by adding at the end the following new 

21 subparagraph: 

22 ‘‘(D) that the State maintain a consumer23 oriented website providing useful information to 

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1 cluding for each facility, Form 2567 State in2 spection reports (or a successor form), com3 plaint investigation reports, the facility’s plan of 

4 correction, and such other information that the 

5 State or the Secretary considers useful in as6 sisting the public to assess the quality of long 

7 term care options and the quality of care pro8 vided by individual facilities;’’. 

9 (3) DEFINITIONS.—In this subsection: 

10 (A) NURSING FACILITY.—The term ‘‘nurs11 ing facility’’ has the meaning given such term 

12 in section 1919(a) of the Social Security Act 

13 (42 U.S.C. 1396r(a)). 

14 (B) SECRETARY.—The term ‘‘Secretary’’ 

15 means the Secretary of Health and Human 

16 Services. 

17 (C) SKILLED NURSING FACILITY.—The 

18 term ‘‘skilled nursing facility’’ has the meaning 

19 given such term in section 1819(a) of the Social 

20 Security Act (42 U.S.C. 1395i–3(a)). 

21 (e) DEVELOPMENT OF CONSUMER RIGHTS INFORMA22 TION PAGE ON NURSING HOME COMPARE WEBSITE.— 

23 Not later than 1 year after the date of enactment of this 

24 Act, the Secretary shall ensure that the Department of 

25 Health and Human Services, as part of the information 


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1 provided for comparison of nursing facilities on the Nurs2 ing Home Compare Medicare website develops and in3 cludes a consumer rights information page that contains 

4 links to descriptions of, and information with respect to, 

5 the following: 

6 (1) The documentation on nursing facilities 

7 that is available to the public. 

8 (2) General information and tips on choosing a 

9 nursing facility that meets the needs of the indi10 vidual. 

11 (3) General information on consumer rights 

12 with respect to nursing facilities. 

13 (4) The nursing facility survey process (on a 

14 national and State-specific basis). 

15 (5) On a State-specific basis, the services avail16 able through the State long-term care ombudsman 

17 for such State. 

18 SEC. 4204. REPORTING OF EXPENDITURES. 

19 Section 1888 of the Social Security Act (42 U.S.C. 

20 1395yy) is amended by adding at the end the following 

21 new subsection: 

22 ‘‘(f) REPORTING OF DIRECT CARE EXPENDI23 TURES.— 

24 ‘‘(1) IN GENERAL.—For cost reports submitted 

25 under this title for cost reporting periods beginning 


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1 on or after the date that is 2 years after the date 

2 of the enactment of this subsection, skilled nursing 

3 facilities shall separately report expenditures for 

4 wages and benefits for direct care staff (breaking 

5 out (at a minimum) registered nurses, licensed pro6 fessional nurses, certified nurse assistants, and other 

7 medical and therapy staff). 

8 ‘‘(2) MODIFICATION OF FORM.—The Secretary, 

9 in consultation with private sector accountants expe10 rienced with Medicare and Medicaid nursing facility 

11 home cost reports, shall redesign such reports to 

12 meet the requirement of paragraph (1) not later 

13 than 1 year after the date of the enactment of this 

14 subsection. 

15 ‘‘(3) CATEGORIZATION BY FUNCTIONAL AC16 COUNTS.—Not later than 30 months after the date 

17 of the enactment of this subsection, the Secretary, 

18 working in consultation with the Medicare Payment 

19 Advisory Commission, the Medicaid and CHIP Pay20 ment and Access Commission, the Inspector General 

21 of the Department of Health and Human Services, 

22 and other expert parties the Secretary determines 

23 appropriate, shall take the expenditures listed on 

24 cost reports, as modified under paragraph (1), sub25 mitted by skilled nursing facilities and categorize 


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1 such expenditures, regardless of any source of pay2 ment for such expenditures, for each skilled nursing 

3 facility into the following functional accounts on an 

4 annual basis: 

5 ‘‘(A) Spending on direct care services (in6 cluding nursing, therapy, and medical services). 

7 ‘‘(B) Spending on indirect care (including 

8 housekeeping and dietary services). 

9 ‘‘(C) Capital assets (including building and 

10 land costs). 

11 ‘‘(D) Administrative services costs. 

12 ‘‘(4) AVAILABILITY OF INFORMATION SUB13 MITTED.—The Secretary shall establish procedures 

14 to make information on expenditures submitted 

15 under this subsection readily available to interested 

16 parties upon request, subject to such requirements 

17 as the Secretary may specify under the procedures 

18 established under this paragraph.’’. 

19 SEC. 4205. STANDARDIZED COMPLAINT FORM. 

20 (a) IN GENERAL.—Section 1128I of the Social Secu21 rity Act, as added and amended by this Act, is amended 

22 by adding at the end the following new subsection: 

23 ‘‘(f) STANDARDIZED COMPLAINT FORM.— 

24 ‘‘(1) DEVELOPMENT BY THE SECRETARY.—The 

25 Secretary shall develop a standardized complaint 


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1 form for use by a resident (or a person acting on the 

2 resident’s behalf) in filing a complaint with a State 

3 survey and certification agency and a State long4 term care ombudsman program with respect to a fa5 cility. 

6 ‘‘(2) COMPLAINT FORMS AND RESOLUTION

7 PROCESSES.— 

8 ‘‘(A) COMPLAINT FORMS.—The State must 

9 make the standardized complaint form devel10 oped under paragraph (1) available upon re11 quest to— 

12 ‘‘(i) a resident of a facility; and 

13 ‘‘(ii) any person acting on the resi14 dent’s behalf. 

15 ‘‘(B) COMPLAINT RESOLUTION PROCESS.— 

16 The State must establish a complaint resolution 

17 process in order to ensure that the legal rep18 resentative of a resident of a facility or other 

19 responsible party is not denied access to such 

20 resident or otherwise retaliated against if they 

21 have complained about the quality of care pro22 vided by the facility or other issues relating to 

23 the facility. Such complaint resolution process 

24 shall include— 


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1 ‘‘(i) procedures to assure accurate 

2 tracking of complaints received, including 

3 notification to the complainant that a com4 plaint has been received; 

5 ‘‘(ii) procedures to determine the like6 ly severity of a complaint and for the in7 vestigation of the complaint; and 

8 ‘‘(iii) deadlines for responding to a 

9 complaint and for notifying the complain10 ant of the outcome of the investigation. 

11 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in 

12 this subsection shall be construed as preventing a 

13 resident of a facility (or a person acting on the resi14 dent’s behalf) from submitting a complaint in a 

15 manner or format other than by using the standard16 ized complaint form developed under paragraph (1) 

17 (including submitting a complaint orally).’’. 

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

19 this section shall take effect 1 year after the date of the 

20 enactment of this Act. 

21 SEC. 4206. ENSURING STAFFING ACCOUNTABILITY. 

22 Section 1128I of the Social Security Act, as added 

23 and amended by this Act, is amended by adding at the 

24 end the following new subsection: 


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1 ‘‘(g) SUBMISSION OF STAFFING INFORMATION

2 BASED ON PAYROLL DATA IN A UNIFORM FORMAT.—Be3 ginning not later than 2 years after the date of the enact4 ment of this subsection, and after consulting with State 

5 long-term care ombudsman programs, consumer advocacy 

6 groups, provider stakeholder groups, employees and their 

7 representatives, and other parties the Secretary deems ap8 propriate, the Secretary shall require a facility to elec9 tronically submit to the Secretary direct care staffing in10 formation (including information with respect to agency 

11 and contract staff) based on payroll and other verifiable 

12 and auditable data in a uniform format (according to spec13 ifications established by the Secretary in consultation with 

14 such programs, groups, and parties). Such specifications 

15 shall require that the information submitted under the 

16 preceding sentence— 

17 ‘‘(1) specify the category of work a certified em18 ployee performs (such as whether the employee is a 

19 registered nurse, licensed practical nurse, licensed 

20 vocational nurse, certified nursing assistant, thera21 pist, or other medical personnel); 

22 ‘‘(2) include resident census data and informa23 tion on resident case mix; 

24 ‘‘(3) include a regular reporting schedule; and 


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1 ‘‘(4) include information on employee turnover 

2 and tenure and on the hours of care provided by 

3 each category of certified employees referenced in 

4 paragraph (1) per resident per day. 

5 Nothing in this subsection shall be construed as pre6 venting the Secretary from requiring submission of such 

7 information with respect to specific categories, such as 

8 nursing staff, before other categories of certified employ9 ees. Information under this subsection with respect to 

10 agency and contract staff shall be kept separate from in11 formation on employee staffing.’’. 

12 SEC. 4207. GAO STUDY AND REPORT ON FIVE-STAR QUAL13 ITY RATING SYSTEM. 

14 (a) STUDY.—The Comptroller General of the United 

15 States (in this section referred to as the ‘‘Comptroller 

16 General’’) shall conduct a study on the Five-Star Quality 

17 Rating System for nursing homes of the Centers for Medi18 care & Medicaid Services. Such study shall include an 

19 analysis of— 

20 (1) how such system is being implemented; 

21 (2) any problems associated with such system 

22 or its implementation; and 

23 (3) how such system could be improved. 

24 (b) REPORT.—Not later than 2 years after the date 

25 of enactment of this Act, the Comptroller General shall 


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1 submit to Congress a report containing the results of the 

2 study conducted under subsection (a), together with rec3 ommendations for such legislation and administrative ac4 tion as the Comptroller General determines appropriate. 

5 PART II—TARGETING ENFORCEMENT 

6 SEC. 4211. CIVIL MONEY PENALTIES. 

7 (a) SKILLED NURSING FACILITIES.— 

8 (1) IN GENERAL.—Section 1819(h)(2)(B)(ii) of 

9 the Social Security Act (42 U.S.C. 1395i– 

10 3(h)(2)(B)(ii)) is amended— 

11 (A) by striking ‘‘PENALTIES.—The Sec12 retary’’ and inserting ‘‘PENALTIES.— 

13 ‘‘(I) IN GENERAL.—Subject to 

14 subclause (II), the Secretary’’; and 

15 (B) by adding at the end the following new 

16 subclauses: 

17 ‘‘(II) REDUCTION OF CIVIL

18 MONEY PENALTIES IN CERTAIN CIR19 CUMSTANCES.—Subject to subclause 

20 (III), in the case where a facility self21 reports and promptly corrects a defi22 ciency for which a penalty was im23 posed under this clause not later than 

24 10 calendar days after the date of 

25 such imposition, the Secretary may 


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1 reduce the amount of the penalty im2 posed by not more than 50 percent. 

3 ‘‘(III) PROHIBITIONS ON REDUC4 TION FOR CERTAIN DEFICIENCIES.— 

5 ‘‘(aa) REPEAT DEFI6 CIENCIES.—The Secretary may 

7 not reduce the amount of a pen8 alty under subclause (II) if the 

9 Secretary had reduced a penalty 

10 imposed on the facility in the 

11 preceding year under such sub12 clause with respect to a repeat 

13 deficiency. 

14 ‘‘(bb) CERTAIN OTHER DE15 FICIENCIES.—The Secretary may 

16 not reduce the amount of a pen17 alty under subclause (II) if the 

18 penalty is imposed on the facility 

19 for a deficiency that is found to 

20 result in a pattern of harm or 

21 widespread harm, immediately 

22 jeopardizes the health or safety 

23 of a resident or residents of the 

24 facility, or results in the death of 

25 a resident of the facility. 


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1 ‘‘(IV) COLLECTION OF CIVIL

2 MONEY PENALTIES.—In the case of a 

3 civil money penalty imposed under 

4 this clause, the Secretary shall issue 

5 regulations that— 

6 ‘‘(aa) subject to item (cc), 

7 not later than 30 days after the 

8 imposition of the penalty, provide 

9 for the facility to have the oppor10 tunity to participate in an inde11 pendent informal dispute resolu12 tion process which generates a 

13 written record prior to the collec14 tion of such penalty; 

15 ‘‘(bb) in the case where the 

16 penalty is imposed for each day 

17 of noncompliance, provide that a 

18 penalty may not be imposed for 

19 any day during the period begin20 ning on the initial day of the im21 position of the penalty and end22 ing on the day on which the in23 formal dispute resolution process 

24 under item (aa) is completed; 


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1 ‘‘(cc) may provide for the 

2 collection of such civil money 

3 penalty and the placement of 

4 such amounts collected in an es5 crow account under the direction 

6 of the Secretary on the earlier of 

7 the date on which the informal 

8 dispute resolution process under 

9 item (aa) is completed or the 

10 date that is 90 days after the 

11 date of the imposition of the pen12 alty; 

13 ‘‘(dd) may provide that such 

14 amounts collected are kept in 

15 such account pending the resolu16 tion of any subsequent appeals; 

17 ‘‘(ee) in the case where the 

18 facility successfully appeals the 

19 penalty, may provide for the re20 turn of such amounts collected 

21 (plus interest) to the facility; and 

22 ‘‘(ff) in the case where all 

23 such appeals are unsuccessful, 

24 may provide that some portion of 

25 such amounts collected may be 


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1 used to support activities that 

2 benefit residents, including as3 sistance to support and protect 

4 residents of a facility that closes 

5 (voluntarily or involuntarily) or is 

6 decertified (including offsetting 

7 costs of relocating residents to 

8 home and community-based set9 tings or another facility), projects 

10 that support resident and family 

11 councils and other consumer in12 volvement in assuring quality 

13 care in facilities, and facility im14 provement initiatives approved by 

15 the Secretary (including joint 

16 training of facility staff and sur17 veyors, technical assistance for 

18 facilities implementing quality as19 surance programs, the appoint20 ment of temporary management 

21 firms, and other activities ap22 proved by the Secretary).’’. 

23 (2) CONFORMING AMENDMENT.—The second 

24 sentence of section 1819(h)(5) of the Social Security 


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1 Act (42 U.S.C. 1395i–3(h)(5)) is amended by insert2 ing ‘‘(ii)(IV),’’ after ‘‘(i),’’. 

3 (b) NURSING FACILITIES.— 

4 (1) IN GENERAL.—Section 1919(h)(3)(C)(ii) of 

5 the Social Security Act (42 U.S.C. 1396r(h)(3)(C)) 

6 is amended— 

7 (A) by striking ‘‘PENALTIES.—The Sec8 retary’’ and inserting ‘‘PENALTIES.— 

9 ‘‘(I) IN GENERAL.—Subject to 

10 subclause (II), the Secretary’’; and 

11 (B) by adding at the end the following new 

12 subclauses: 

13 ‘‘(II) REDUCTION OF CIVIL

14 MONEY PENALTIES IN CERTAIN CIR15 CUMSTANCES.—Subject to subclause 

16 (III), in the case where a facility self17 reports and promptly corrects a defi18 ciency for which a penalty was im19 posed under this clause not later than 

20 10 calendar days after the date of 

21 such imposition, the Secretary may 

22 reduce the amount of the penalty im23 posed by not more than 50 percent. 

24 ‘‘(III) PROHIBITIONS ON REDUC25 TION FOR CERTAIN DEFICIENCIES.— 


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1 ‘‘(aa) REPEAT DEFI2 CIENCIES.—The Secretary may 

3 not reduce the amount of a pen4 alty under subclause (II) if the 

5 Secretary had reduced a penalty 

6 imposed on the facility in the 

7 preceding year under such sub8 clause with respect to a repeat 

9 deficiency. 

10 ‘‘(bb) CERTAIN OTHER DE11 FICIENCIES.—The Secretary may 

12 not reduce the amount of a pen13 alty under subclause (II) if the 

14 penalty is imposed on the facility 

15 for a deficiency that is found to 

16 result in a pattern of harm or 

17 widespread harm, immediately 

18 jeopardizes the health or safety 

19 of a resident or residents of the 

20 facility, or results in the death of 

21 a resident of the facility. 

22 ‘‘(IV) COLLECTION OF CIVIL

23 MONEY PENALTIES.—In the case of a 

24 civil money penalty imposed under 


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1 this clause, the Secretary shall issue 

2 regulations that— 

3 ‘‘(aa) subject to item (cc), 

4 not later than 30 days after the 

5 imposition of the penalty, provide 

6 for the facility to have the oppor7 tunity to participate in an inde8 pendent informal dispute resolu9 tion process which generates a 

10 written record prior to the collec11 tion of such penalty; 

12 ‘‘(bb) in the case where the 

13 penalty is imposed for each day 

14 of noncompliance, provide that a 

15 penalty may not be imposed for 

16 any day during the period begin17 ning on the initial day of the im18 position of the penalty and end19 ing on the day on which the in20 formal dispute resolution process 

21 under item (aa) is completed; 

22 ‘‘(cc) may provide for the 

23 collection of such civil money 

24 penalty and the placement of 

25 such amounts collected in an esVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01298 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 crow account under the direction 

2 of the Secretary on the earlier of 

3 the date on which the informal 

4 dispute resolution process under 

5 item (aa) is completed or the 

6 date that is 90 days after the 

7 date of the imposition of the pen8 alty; 

9 ‘‘(dd) may provide that such 

10 amounts collected are kept in 

11 such account pending the resolu12 tion of any subsequent appeals; 

13 ‘‘(ee) in the case where the 

14 facility successfully appeals the 

15 penalty, may provide for the re16 turn of such amounts collected 

17 (plus interest) to the facility; and 

18 ‘‘(ff) in the case where all 

19 such appeals are unsuccessful, 

20 may provide that some portion of 

21 such amounts collected may be 

22 used to support activities that 

23 benefit residents, including as24 sistance to support and protect 

25 residents of a facility that closes 


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1 (voluntarily or involuntarily) or is 

2 decertified (including offsetting 

3 costs of relocating residents to 

4 home and community-based set5 tings or another facility), projects 

6 that support resident and family 

7 councils and other consumer in8 volvement in assuring quality 

9 care in facilities, and facility im10 provement initiatives approved by 

11 the Secretary (including joint 

12 training of facility staff and sur13 veyors, technical assistance for 

14 facilities implementing quality as15 surance programs, the appoint16 ment of temporary management 

17 firms, and other activities ap18 proved by the Secretary).’’. 

19 (2) CONFORMING AMENDMENT.—Section 

20 1919(h)(5)(8) of the Social Security Act (42 U.S.C. 

21 1396r(h)(5)(8)) is amended by inserting ‘‘(ii)(IV),’’ 

22 after ‘‘(i),’’. 

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

24 this section shall take effect 1 year after the date of the 

25 enactment of this Act. 


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1 SEC. 4212. NATIONAL INDEPENDENT MONITOR PILOT PRO2 GRAM. 

3 (a) ESTABLISHMENT.— 

4 (1) IN GENERAL.—The Secretary shall establish 

5 a pilot program to develop, test, and implement an 

6 independent monitor program to oversee interstate 

7 and large intrastate chains of skilled nursing facili8 ties and nursing facilities. 

9 (2) SELECTION.—The Secretary shall select 

10 chains of skilled nursing facilities and nursing facili11 ties described in paragraph (1) to participate in the 

12 pilot program under this section from among those 

13 chains that submit an application to the Secretary at 

14 such time, in such manner, and containing such in15 formation as the Secretary may require. 

16 (3) DURATION.—The Secretary shall conduct 

17 the pilot program under this section for a 2-year pe18 riod. 

19 (4) IMPLEMENTATION.—The Secretary shall 

20 implement the pilot program under this section not 

21 later than 1 year after the date of the enactment of 

22 this Act. 

23 (b) REQUIREMENTS.—The Secretary shall evaluate 

24 chains selected to participate in the pilot program under 

25 this section based on criteria selected by the Secretary, 

26 including where evidence suggests that 1 or more facilities 


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1 of the chain are experiencing serious safety and quality 

2 of care problems. Such criteria may include the evaluation 

3 of a chain that includes 1 or more facilities participating 

4 in the ‘‘Special Focus Facility’’ program (or a successor 

5 program) or 1 or more facilities with a record of repeated 

6 serious safety and quality of care deficiencies. 

7 (c) RESPONSIBILITIES.—An independent monitor 

8 that enters into a contract with the Secretary to partici9 pate in the conduct of the pilot program under this section 

10 shall— 

11 (1) conduct periodic reviews and prepare root12 cause quality and deficiency analyses of a chain to 

13 assess if facilities of the chain are in compliance 

14 with State and Federal laws and regulations applica15 ble to the facilities; 

16 (2) undertake sustained oversight of the chain, 

17 whether publicly or privately held, to involve the 

18 owners of, and any additional disclosable party with 

19 respect to a facility of, the chain in facilitating com20 pliance by facilities of the chain with State and Fed21 eral laws and regulations applicable to the facilities; 

22 (3) analyze the management structure, distribu23 tion of expenditures, and nurse staffing levels of fa24 cilities of the chain in relation to resident census, 

25 staff turnover rates, and tenure; 


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1 (4) report findings and recommendations with 

2 respect to such reviews, analyses, and oversight to 

3 the chain and facilities of the chain, to the Sec4 retary, and to relevant States; and 

5 (5) publish the results of such reviews, anal6 yses, and oversight. 

7 (d) IMPLEMENTATION OF RECOMMENDATIONS.— 

8 (1) RECEIPT OF FINDING BY CHAIN.—Not later 

9 than 10 days after receipt of a finding of an inde10 pendent monitor under subsection (c)(4), a chain 

11 participating in the pilot program shall submit to 

12 the independent monitor a report— 

13 (A) outlining corrective actions the chain 

14 will take to implement the recommendations in 

15 such report; or 

16 (B) indicating that the chain will not im17 plement such recommendations, and why it will 

18 not do so. 

19 (2) RECEIPT OF REPORT BY INDEPENDENT

20 MONITOR.—Not later than 10 days after receipt of 

21 a report submitted by a chain under paragraph (1), 

22 an independent monitor shall finalize its rec23 ommendations and submit a report to the chain and 

24 facilities of the chain, the Secretary, and the State 


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1 or States, as appropriate, containing such final rec2 ommendations. 

3 (e) COST OF APPOINTMENT.—A chain shall be re4 sponsible for a portion of the costs associated with the 

5 appointment of independent monitors under the pilot pro6 gram under this section. The chain shall pay such portion 

7 to the Secretary (in an amount and in accordance with 

8 procedures established by the Secretary). 

9 (f) WAIVER AUTHORITY.—The Secretary may waive 

10 such requirements of titles XVIII and XIX of the Social 

11 Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as 

12 may be necessary for the purpose of carrying out the pilot 

13 program under this section. 

14 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated such sums as may be 

16 necessary to carry out this section. 

17 (h) DEFINITIONS.—In this section: 

18 (1) ADDITIONAL DISCLOSABLE PARTY.—The 

19 term ‘‘additional disclosable party’’ has the meaning 

20 given such term in section 1124(c)(5)(A) of the So21 cial Security Act, as added by section 4201(a). 

22 (2) FACILITY.—The term ‘‘facility’’ means a 

23 skilled nursing facility or a nursing facility. 

24 (3) NURSING FACILITY.—The term ‘‘nursing 

25 facility’’ has the meaning given such term in section 


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1 1919(a) of the Social Security Act (42 U.S.C. 

2 1396r(a)). 

3 (4) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of Health and Human Services, acting 

5 through the Assistant Secretary for Planning and 

6 Evaluation. 

7 (5) SKILLED NURSING FACILITY.—The term 

8 ‘‘skilled nursing facility’’ has the meaning given such 

9 term in section 1819(a) of the Social Security Act 

10 (42 U.S.C. 1395(a)). 

11 (i) EVALUATION AND REPORT.— 

12 (1) EVALUATION.—The Inspector General of 

13 the Department of Health and Human Services shall 

14 evaluate the pilot program conducted under this sub15 section. 

16 (2) REPORT.—Not later than 180 days after 

17 the completion of the pilot program under this sec18 tion, the Inspector General shall submit to Congress 

19 and the Secretary a report containing the results of 

20 the evaluation conducted under paragraph (1), to21 gether with recommendations— 

22 (A) as to whether the independent monitor 

23 program should be established on a permanent 

24 basis; 


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1 (B) if the Inspector General recommends 

2 that such program be so established, on appro3 priate procedures and mechanisms for such es4 tablishment; and 

5 (C) for such legislation and administrative 

6 action as the Inspector General determines ap7 propriate. 

8 SEC. 4213. NOTIFICATION OF FACILITY CLOSURE. 

9 (a) IN GENERAL.—Section 1128I of the Social Secu10 rity Act, as added and amended by this Act, is amended 

11 by adding at the end the following new subsection: 

12 ‘‘(h) NOTIFICATION OF FACILITY CLOSURE.— 

13 ‘‘(1) IN GENERAL.—Any individual who is the 

14 administrator of a facility must— 

15 ‘‘(A) submit to the Secretary, the State 

16 long-term care ombudsman, residents of the fa17 cility, and the legal representatives of such resi18 dents or other responsible parties, written noti19 fication of an impending closure— 

20 ‘‘(i) subject to clause (ii), not later 

21 than the date that is 60 days prior to the 

22 date of such closure; and 

23 ‘‘(ii) in the case of a facility where the 

24 Secretary terminates the facility’s partici25 pation under this title, not later than the 


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1 date that the Secretary determines appro2 priate; 

3 ‘‘(B) ensure that the facility does not 

4 admit any new residents on or after the date on 

5 which such written notification is submitted; 

6 and 

7 ‘‘(C) include in the notice a plan for the 

8 transfer and adequate relocation of the resi9 dents of the facility by a specified date prior to 

10 closure that has been approved by the State, in11 cluding assurances that the residents will be 

12 transferred to the most appropriate facility or 

13 other setting in terms of quality, services, and 

14 location, taking into consideration the needs, 

15 choice, and best interests of each resident. 

16 ‘‘(2) RELOCATION.— 

17 ‘‘(A) IN GENERAL.—The State shall ensure 

18 that, before a facility closes, all residents of the 

19 facility have been successfully relocated to an20 other facility or an alternative home and com21 munity-based setting. 

22 ‘‘(B) CONTINUATION OF PAYMENTS UNTIL

23 RESIDENTS RELOCATED.—The Secretary may, 

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1 spect to residents of a facility that has sub2 mitted a notification under paragraph (1) dur3 ing the period beginning on the date such noti4 fication is submitted and ending on the date on 

5 which the resident is successfully relocated. 

6 ‘‘(3) SANCTIONS.—Any individual who is the 

7 administrator of a facility that fails to comply with 

8 the requirements of paragraph (1)— 

9 ‘‘(A) shall be subject to a civil monetary 

10 penalty of up to $1,000,000; 

11 ‘‘(B) may be subject to exclusion from par12 ticipation in any Federal health care program 

13 (as defined in section 1128B(f)); and 

14 ‘‘(C) shall be subject to any other penalties 

15 that may be prescribed by law. 

16 ‘‘(4) PROCEDURE.—The provisions of section 

17 1128A (other than subsections (a) and (b) and the 

18 second sentence of subsection (f)) shall apply to a 

19 civil money penalty or exclusion under paragraph (3) 

20 in the same manner as such provisions apply to a 

21 penalty or proceeding under section 1128A(a).’’. 

22 (b) CONFORMING AMENDMENTS.—Section 

23 1819(h)(4) of the Social Security Act (42 U.S.C. 1395i– 

24 3(h)(4)) is amended— 


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1 (1) in the first sentence, by striking ‘‘the Sec2 retary shall terminate’’ and inserting ‘‘the Secretary, 

3 subject to section 1128I(h), shall terminate’’; and 

4 (2) in the second sentence, by striking ‘‘sub5 section (c)(2)’’ and inserting ‘‘subsection (c)(2) and 

6 section 1128I(h)’’. 

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

8 this section shall take effect 1 year after the date of the 

9 enactment of this Act. 

10 SEC. 4214. NATIONAL DEMONSTRATION PROJECTS ON CUL11 TURE CHANGE AND USE OF INFORMATION 

12 TECHNOLOGY IN NURSING HOMES. 

13 (a) IN GENERAL.—The Secretary shall conduct 2 

14 demonstration projects, 1 for the development of best 

15 practices in skilled nursing facilities and nursing facilities 

16 that are involved in the culture change movement (includ17 ing the development of resources for facilities to find and 

18 access funding in order to undertake culture change) and 

19 1 for the development of best practices in skilled nursing 

20 facilities and nursing facilities for the use of information 

21 technology to improve resident care. 

22 (b) CONDUCT OF DEMONSTRATION PROJECTS.— 

23 (1) GRANT AWARD.—Under each demonstration 

24 project conducted under this section, the Secretary 

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1 tings for the development of best practices described 

2 in subsection (a) with respect to the demonstration 

3 project involved. Such award shall be made on a 

4 competitive basis and may be allocated in 1 lump5 sum payment. 

6 (2) CONSIDERATION OF SPECIAL NEEDS OF

7 RESIDENTS.—Each demonstration project conducted 

8 under this section shall take into consideration the 

9 special needs of residents of skilled nursing facilities 

10 and nursing facilities who have cognitive impair11 ment, including dementia. 

12 (c) DURATION AND IMPLEMENTATION.— 

13 (1) DURATION.—The demonstration projects 

14 shall each be conducted for a period not to exceed 

15 3 years. 

16 (2) IMPLEMENTATION.—The demonstration 

17 projects shall each be implemented not later than 1 

18 year after the date of the enactment of this Act. 

19 (d) DEFINITIONS.—In this section: 

20 (1) NURSING FACILITY.—The term ‘‘nursing 

21 facility’’ has the meaning given such term in section 

22 1919(a) of the Social Security Act (42 U.S.C. 

23 1396r(a)). 

24 (2) SECRETARY.—The term ‘‘Secretary’’ means 

25 the Secretary of Health and Human Services. 


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1 (3) SKILLED NURSING FACILITY.—The term 

2 ‘‘skilled nursing facility’’ has the meaning given such 

3 term in section 1819(a) of the Social Security Act 

4 (42 U.S.C. 1395(a)). 

5 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated such sums as may be 

7 necessary to carry out this section. 

8 (f) REPORT.—Not later than 9 months after the com9 pletion of the demonstration project, the Secretary shall 

10 submit to Congress a report on such project, together with 

11 recommendations for such legislation and administrative 

12 action as the Secretary determines appropriate. 

13 PART III—IMPROVING STAFF TRAINING 

14 SEC. 4221. DEMENTIA AND ABUSE PREVENTION TRAINING. 

15 (a) SKILLED NURSING FACILITIES.— 

16 (1) IN GENERAL.—Section 1819(f)(2)(A)(i)(I) 

17 of the Social Security Act (42 U.S.C. 1395i– 

18 3(f)(2)(A)(i)(I)) is amended by inserting ‘‘(includ19 ing, in the case of initial training and, if the Sec20 retary determines appropriate, in the case of ongo21 ing training, dementia management training, and 

22 patient abuse prevention training’’ before ‘‘, (II)’’. 

23 (2) CLARIFICATION OF DEFINITION OF NURSE

24 AIDE.—Section 1819(b)(5)(F) of the Social Security 


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1 Act (42 U.S.C. 1395i–3(b)(5)(F)) is amended by 

2 adding at the end the following flush sentence: 

3 ‘‘Such term includes an individual who provides 

4 such services through an agency or under a 

5 contract with the facility.’’. 

6 (b) NURSING FACILITIES.— 

7 (1) IN GENERAL.—Section 1919(f)(2)(A)(i)(I) 

8 of the Social Security Act (42 U.S.C. 

9 1396r(f)(2)(A)(i)(I)) is amended by inserting ‘‘(in10 cluding, in the case of initial training and, if the 

11 Secretary determines appropriate, in the case of on12 going training, dementia management training, and 

13 patient abuse prevention training’’ before ‘‘, (II)’’. 

14 (2) CLARIFICATION OF DEFINITION OF NURSE

15 AIDE.—Section 1919(b)(5)(F) of the Social Security 

16 Act (42 U.S.C. 1396r(b)(5)(F)) is amended by add17 ing at the end the following flush sentence: 

18 ‘‘Such term includes an individual who provides 

19 such services through an agency or under a 

20 contract with the facility.’’. 

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

22 this section shall take effect 1 year after the date of the 

23 enactment of this Act. 


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1 Subtitle D—Nationwide Program 

2 for National and State Back3 ground Checks on Direct Pa4 tient Access Employees of Long5 term Care Facilities and Pro6 viders 

7 SEC. 4301. NATIONWIDE PROGRAM FOR NATIONAL AND 

8 STATE BACKGROUND CHECKS ON DIRECT PA9 TIENT ACCESS EMPLOYEES OF LONG-TERM 

10 CARE FACILITIES AND PROVIDERS. 

11 (a) IN GENERAL.—The Secretary of Health and 

12 Human Services (in this section referred to as the ‘‘Sec13 retary’’), shall establish a program to identify efficient, ef14 fective, and economical procedures for long term care fa15 cilities or providers to conduct background checks on pro16 spective direct patient access employees on a nationwide 

17 basis (in this subsection, such program shall be referred 

18 to as the ‘‘nationwide program’’). Except for the following 

19 modifications, the Secretary shall carry out the nationwide 

20 program under similar terms and conditions as the pilot 

21 program under section 307 of the Medicare Prescription 

22 Drug, Improvement, and Modernization Act of 2003 (Pub23 lic Law 108–173; 117 Stat. 2257), including the prohibi24 tion on hiring abusive workers and the authorization of 

25 the imposition of penalties by a participating State under 


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1 subsection (b)(3)(A) and (b)(6), respectively, of such sec2 tion 307: 

3 (1) AGREEMENTS.— 

4 (A) NEWLY PARTICIPATING STATES.—The 

5 Secretary shall enter into agreements with each 

6 State— 

7 (i) that the Secretary has not entered 

8 into an agreement with under subsection 

9 (c)(1) of such section 307; 

10 (ii) that agrees to conduct background 

11 checks under the nationwide program on a 

12 Statewide basis; and 

13 (iii) that submits an application to the 

14 Secretary containing such information and 

15 at such time as the Secretary may specify. 

16 (B) CERTAIN PREVIOUSLY PARTICIPATING

17 STATES.—The Secretary shall enter into agree18 ments with each State— 

19 (i) that the Secretary has entered into 

20 an agreement with under such subsection 

21 (c)(1), but only in the case where such 

22 agreement did not require the State to 

23 conduct background checks under the pro24 gram established under subsection (a) of 

25 such section 307 on a Statewide basis; 


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1 (ii) that agrees to conduct background 

2 checks under the nationwide program on a 

3 Statewide basis; and 

4 (iii) that submits an application to the 

5 Secretary containing such information and 

6 at such time as the Secretary may specify. 

7 (2) NONAPPLICATION OF SELECTION CRI8 TERIA.—The selection criteria required under sub9 section (c)(3)(B) of such section 307 shall not apply. 

10 (3) REQUIRED FINGERPRINT CHECK AS PART

11 OF CRIMINAL HISTORY BACKGROUND CHECK.—The 

12 procedures established under subsection (b)(1) of 

13 such section 307 shall— 

14 (A) require that the long-term care facility 

15 or provider (or the designated agent of the 

16 long-term care facility or provider) obtain State 

17 and national criminal history background 

18 checks on the prospective employee through 

19 such means as the Secretary determines appro20 priate, efficient, and effective that utilize a 

21 search of State-based abuse and neglect reg22 istries and databases, including the abuse and 

23 neglect registries of another State in the case 

24 where a prospective employee previously resided 

25 in that State, State criminal history records, 


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1 the records of any proceedings in the State that 

2 may contain disqualifying information about 

3 prospective employees (such as proceedings con4 ducted by State professional licensing and dis5 ciplinary boards and State Medicaid Fraud 

6 Control Units), and Federal criminal history 

7 records, including a fingerprint check using the 

8 Integrated Automated Fingerprint Identifica9 tion System of the Federal Bureau of Investiga10 tion; 

11 (B) require States to describe and test 

12 methods that reduce duplicative fingerprinting, 

13 including providing for the development of ‘‘rap 

14 back’’ capability by the State such that, if a di15 rect patient access employee of a long-term care 

16 facility or provider is convicted of a crime fol17 lowing the initial criminal history background 

18 check conducted with respect to such employee, 

19 and the employee’s fingerprints match the 

20 prints on file with the State law enforcement 

21 department, the department will immediately 

22 inform the State and the State will immediately 

23 inform the long-term care facility or provider 

24 which employs the direct patient access em25 ployee of such conviction; and 


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1 (C) require that criminal history back2 ground checks conducted under the nationwide 

3 program remain valid for a period of time speci4 fied by the Secretary. 

5 (4) STATE REQUIREMENTS.—An agreement en6 tered into under paragraph (1) shall require that a 

7 participating State— 

8 (A) be responsible for monitoring compli9 ance with the requirements of the nationwide 

10 program; 

11 (B) have procedures in place to— 

12 (i) conduct screening and criminal his13 tory background checks under the nation14 wide program in accordance with the re15 quirements of this section; 

16 (ii) monitor compliance by long-term 

17 care facilities and providers with the proce18 dures and requirements of the nationwide 

19 program; 

20 (iii) as appropriate, provide for a pro21 visional period of employment by a long22 term care facility or provider of a direct 

23 patient access employee, not to exceed 60 

24 days, pending completion of the required 

25 criminal history background check and, in 


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1 the case where the employee has appealed 

2 the results of such background check, 

3 pending completion of the appeals process, 

4 during which the employee shall be subject 

5 to direct on-site supervision (in accordance 

6 with procedures established by the State to 

7 ensure that a long-term care facility or 

8 provider furnishes such direct on-site su9 pervision); 

10 (iv) provide an independent process by 

11 which a provisional employee or an em12 ployee may appeal or dispute the accuracy 

13 of the information obtained in a back14 ground check performed under the nation15 wide program, including the specification 

16 of criteria for appeals for direct patient ac17 cess employees found to have disqualifying 

18 information which shall include consider19 ation of the passage of time, extenuating 

20 circumstances, demonstration of rehabilita21 tion, and relevancy of the particular dis22 qualifying information with respect to the 

23 current employment of the individual; 

24 (v) provide for the designation of a 

25 single State agency as responsible for— 


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1 (I) overseeing the coordination of 

2 any State and national criminal his3 tory background checks requested by 

4 a long-term care facility or provider 

5 (or the designated agent of the long6 term care facility or provider) utilizing 

7 a search of State and Federal crimi8 nal history records, including a finger9 print check of such records; 

10 (II) overseeing the design of ap11 propriate privacy and security safe12 guards for use in the review of the re13 sults of any State or national criminal 

14 history background checks conducted 

15 regarding a prospective direct patient 

16 access employee to determine whether 

17 the employee has any conviction for a 

18 relevant crime; 

19 (III) immediately reporting to 

20 the long-term care facility or provider 

21 that requested the criminal history 

22 background check the results of such 

23 review; and 

24 (IV) in the case of an employee 

25 with a conviction for a relevant crime 


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1 that is subject to reporting under sec2 tion 1128E of the Social Security Act 

3 (42 U.S.C. 1320a–7e), reporting the 

4 existence of such conviction to the 

5 database established under that sec6 tion; 

7 (vi) determine which individuals are 

8 direct patient access employees (as defined 

9 in paragraph (6)(B)) for purposes of the 

10 nationwide program; 

11 (vii) as appropriate, specify offenses, 

12 including convictions for violent crimes, for 

13 purposes of the nationwide program; and 

14 (viii) describe and test methods that 

15 reduce duplicative fingerprinting, including 

16 providing for the development of ‘‘rap 

17 back’’ capability such that, if a direct pa18 tient access employee of a long-term care 

19 facility or provider is convicted of a crime 

20 following the initial criminal history back21 ground check conducted with respect to 

22 such employee, and the employee’s finger23 prints match the prints on file with the 

24 State law enforcement department— 


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1 (I) the department will imme2 diately inform the State agency des3 ignated under clause (v) and such 

4 agency will immediately inform the fa5 cility or provider which employs the 

6 direct patient access employee of such 

7 conviction; and 

8 (II) the State will provide, or will 

9 require the facility to provide, to the 

10 employee a copy of the results of the 

11 criminal history background check 

12 conducted with respect to the em13 ployee at no charge in the case where 

14 the individual requests such a copy. 

15 (5) PAYMENTS.— 

16 (A) NEWLY PARTICIPATING STATES.— 

17 (i) IN GENERAL.—As part of the ap18 plication submitted by a State under para19 graph (1)(A)(iii), the State shall guar20 antee, with respect to the costs to be in21 curred by the State in carrying out the na22 tionwide program, that the State will make 

23 available (directly or through donations 

24 from public or private entities) a particular 

25 amount of non-Federal contributions, as a 


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1 condition of receiving the Federal match 

2 under clause (ii). 

3 (ii) FEDERAL MATCH.—The payment 

4 amount to each State that the Secretary 

5 enters into an agreement with under para6 graph (1)(A) shall be 3 times the amount 

7 that the State guarantees to make avail8 able under clause (i), except that in no 

9 case may the payment amount exceed 

10 $3,000,000. 

11 (B) PREVIOUSLY PARTICIPATING

12 STATES.— 

13 (i) IN GENERAL.—As part of the ap14 plication submitted by a State under para15 graph (1)(B)(iii), the State shall guar16 antee, with respect to the costs to be in17 curred by the State in carrying out the na18 tionwide program, that the State will make 

19 available (directly or through donations 

20 from public or private entities) a particular 

21 amount of non-Federal contributions, as a 

22 condition of receiving the Federal match 

23 under clause (ii). 

24 (ii) FEDERAL MATCH.—The payment 

25 amount to each State that the Secretary 


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1 enters into an agreement with under para2 graph (1)(B) shall be 3 times the amount 

3 that the State guarantees to make avail4 able under clause (i), except that in no 

5 case may the payment amount exceed 

6 $1,500,000. 

7 (6) DEFINITIONS.—Under the nationwide pro8 gram: 

9 (A) CONVICTION FOR A RELEVANT

10 CRIME.—The term ‘‘conviction for a relevant 

11 crime’’ means any Federal or State criminal 

12 conviction for— 

13 (i) any offense described in section 

14 1128(a) of the Social Security Act (42 

15 U.S.C. 1320a–7); or 

16 (ii) such other types of offenses as a 

17 participating State may specify for pur18 poses of conducting the program in such 

19 State. 

20 (B) DISQUALIFYING INFORMATION.—The 

21 term ‘‘disqualifying information’’ means a con22 viction for a relevant crime or a finding of pa23 tient or resident abuse. 

24 (C) FINDING OF PATIENT OR RESIDENT

25 ABUSE.—The term ‘‘finding of patient or resiVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01323 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 dent abuse’’ means any substantiated finding 

2 by a State agency under section 1819(g)(1)(C) 

3 or 1919(g)(1)(C) of the Social Security Act (42 

4 U.S.C. 1395i–3(g)(1)(C), 1396r(g)(1)(C)) or a 

5 Federal agency that a direct patient access em6 ployee has committed— 

7 (i) an act of patient or resident abuse 

8 or neglect or a misappropriation of patient 

9 or resident property; or 

10 (ii) such other types of acts as a par11 ticipating State may specify for purposes 

12 of conducting the program in such State. 

13 (D) DIRECT PATIENT ACCESS EM14 PLOYEE.—The term ‘‘direct patient access em15 ployee’’ means any individual who has access to 

16 a patient or resident of a long-term care facility 

17 or provider through employment or through a 

18 contract with such facility or provider and has 

19 duties that involve (or may involve) one-on-one 

20 contact with a patient or resident of the facility 

21 or provider, as determined by the State for pur22 poses of the nationwide program. Such term 

23 does not include a volunteer unless the volun24 teer has duties that are equivalent to the duties 

25 of a direct patient access employee and those 


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1 duties involve (or may involve) one-on-one con2 tact with a patient or resident of the long-term 

3 care facility or provider. 

4 (E) LONG-TERM CARE FACILITY OR PRO5 VIDER.—The term ‘‘long-term care facility or 

6 provider’’ means the following facilities or pro7 viders which receive payment for services under 

8 title XVIII or XIX of the Social Security Act: 

9 (i) A skilled nursing facility (as de10 fined in section 1819(a) of the Social Secu11 rity Act (42 U.S.C. 1395i–3(a))). 

12 (ii) A nursing facility (as defined in 

13 section 1919(a) of such Act (42 U.S.C. 

14 1396r(a))). 

15 (iii) A home health agency. 

16 (iv) A provider of hospice care (as de17 fined in section 1861(dd)(1) of such Act 

18 (42 U.S.C. 1395x(dd)(1))). 

19 (v) A long-term care hospital (as de20 scribed in section 1886(d)(1)(B)(iv) of 

21 such Act (42 U.S.C. 

22 1395ww(d)(1)(B)(iv))). 

23 (vi) A provider of personal care serv24 ices. 

25 (vii) A provider of adult day care. 


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1 (viii) A residential care provider that 

2 arranges for, or directly provides, long3 term care services, including an assisted 

4 living facility that provides a level of care 

5 established by the Secretary. 

6 (ix) An intermediate care facility for 

7 the mentally retarded (as defined in sec8 tion 1905(d) of such Act (42 U.S.C. 

9 1396d(d))). 

10 (x) Any other facility or provider of 

11 long-term care services under such titles as 

12 the participating State determines appro13 priate. 

14 (7) EVALUATION AND REPORT.— 

15 (A) EVALUATION.— 

16 (i) IN GENERAL.—The Inspector Gen17 eral of the Department of Health and 

18 Human Services shall conduct an evalua19 tion of the nationwide program. 

20 (ii) INCLUSION OF SPECIFIC TOP21 ICS.—The evaluation conducted under 

22 clause (i) shall include the following: 

23 (I) A review of the various proce24 dures implemented by participating 

25 States for long-term care facilities or 


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1 providers, including staffing agencies, 

2 to conduct background checks of di3 rect patient access employees under 

4 the nationwide program and identi5 fication of the most appropriate, effi6 cient, and effective procedures for 

7 conducting such background checks. 

8 (II) An assessment of the costs 

9 of conducting such background checks 

10 (including start up and administrative 

11 costs). 

12 (III) A determination of the ex13 tent to which conducting such back14 ground checks leads to any unin15 tended consequences, including a re16 duction in the available workforce for 

17 long-term care facilities or providers. 

18 (IV) An assessment of the impact 

19 of the nationwide program on reduc20 ing the number of incidents of neglect, 

21 abuse, and misappropriation of resi22 dent property to the extent prac23 ticable. 

24 (V) An evaluation of other as25 pects of the nationwide program, as 


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1 determined appropriate by the Sec2 retary. 

3 (B) REPORT.—Not later than 180 days 

4 after the completion of the nationwide program, 

5 the Inspector General of the Department of 

6 Health and Human Services shall submit a re7 port to Congress containing the results of the 

8 evaluation conducted under subparagraph (A). 

9 (b) FUNDING.— 

10 (1) NOTIFICATION.—The Secretary of Health 

11 and Human Services shall notify the Secretary of 

12 the Treasury of the amount necessary to carry out 

13 the nationwide program under this section for the 

14 period of fiscal years 2010 through 2012, except 

15 that in no case shall such amount exceed 

16 $160,000,000. 

17 (2) TRANSFER OF FUNDS.— 

18 (A) IN GENERAL.—Out of any funds in the 

19 Treasury not otherwise appropriated, the Sec20 retary of the Treasury shall provide for the 

21 transfer to the Secretary of Health and Human 

22 Services of the amount specified as necessary to 

23 carry out the nationwide program under para24 graph (1). Such amount shall remain available 

25 until expended. 


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1 (B) RESERVATION OF FUNDS FOR CON2 DUCT OF EVALUATION.—The Secretary may re3 serve not more than $3,000,000 of the amount 

4 transferred under subparagraph (A) to provide 

5 for the conduct of the evaluation under sub6 section (a)(7)(A). 

7 Subtitle E—Pharmacy Benefit 

8 Managers 

9 SEC. 4401. PHARMACY BENEFIT MANAGERS TRANS10 PARENCY REQUIREMENTS. 

11 Title XI of the Social Security Act (42 U.S.C. 1301 

12 et seq.), as amended by sections 1611(c) and 1923, is 

13 amended by inserting after section 1150B the following 

14 new section: 

15 ‘‘SEC. 1150C. PHARMACY BENEFIT MANAGERS TRANS16 PARENCY REQUIREMENTS. 

17 ‘‘(a) PROVISION OF INFORMATION.—A health bene18 fits plan or any entity that provides pharmacy benefits 

19 management services on behalf of a health benefits plan 

20 (in this section referred to as a ‘PBM’) that manages pre21 scription drug coverage under a contract with— 

22 ‘‘(1) a PDP sponsor of a prescription drug plan 

23 or an MA organization offering an MA–PD plan 

24 under part D of title XVIII; or 


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1 ‘‘(2) a qualified health benefits plan offered 

2 through an exchange established by a State under 

3 title XXII, 

4 shall provide the information described in subsection (b) 

5 to the Secretary and, in the case of a PBM, to the plan 

6 with which the PBM is under contract with, at such times, 

7 and in such form and manner, as the Secretary shall speci8 fy. 

9 ‘‘(b) INFORMATION DESCRIBED.—The information 

10 described in this subsection is the following with respect 

11 to services provided by a health benefits plan or PBM for 

12 a contract year: 

13 ‘‘(1) The percentage of all prescriptions that 

14 were provided through retail pharmacies compared 

15 to mail order pharmacies, and the percentage of pre16 scriptions for which a generic drug was available and 

17 dispensed (generic dispensing rate), by pharmacy 

18 type (which includes an independent pharmacy, 

19 chain pharmacy, supermarket pharmacy, or mass 

20 merchandiser pharmacy that is licensed as a phar21 macy by the State and that dispenses medication to 

22 the general public), that is paid by the health bene23 fits plan or PBM under the contract. 

24 ‘‘(2) The aggregate amount, and the type of re25 bates, discounts, or price concessions (excluding 


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1 bona fide service fees, which include but are not lim2 ited to distribution service fees, inventory manage3 ment fees, product stocking allowances, and fees as4 sociated with administrative services agreements and 

5 patient care programs (such as medication compli6 ance programs and patient education programs))that 

7 the PBM negotiates that are attributable to patient 

8 utilization under the plan, and the aggregate amount 

9 of the rebates, discounts, or price concessions that 

10 are passed through to the plan sponsor, and the 

11 total number of prescriptions that were dispensed. 

12 ‘‘(3) The aggregate amount of the difference 

13 between the amount the health benefits plan pays 

14 the PBM and the amount that the PBM pays retail 

15 pharmacies, and mail order pharmacies, and the 

16 total number of prescriptions that were dispensed. 

17 ‘‘(c) CONFIDENTIALITY.—Information disclosed by a 

18 health benefits plan or PBM under this section is con19 fidential and shall not be disclosed by the Secretary or 

20 by a plan receiving the information, except that the Sec21 retary may disclose the information in a form which does 

22 not disclose the identity of a specific PBM, plan, or prices 

23 charged for drugs, for the following purposes: 


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1 ‘‘(1) As the Secretary determines to be nec2 essary to carry out this section or part D of title 

3 XVIII. 

4 ‘‘(2) To permit the Comptroller General to re5 view the information provided. 

6 ‘‘(3) To permit the Director of the Congres7 sional Budget Office to review the information pro8 vided. 

9 ‘‘(4) To States to carry out title XXII. 

10 ‘‘(d) PENALTIES.—The provisions of subsection 

11 (b)(3)(C) of section 1927 shall apply to a health benefits 

12 plan or PBM that fails to provide information required 

13 under subsection (a) on a timely basis or that knowingly 

14 provides false information in the same manner as such 

15 provisions apply to a manufacturer with an agreement 

16 under that section.’’. 

17 TITLE V—FRAUD, WASTE, AND 

18 ABUSE 

19 Subtitle A—Medicare, Medicaid, 

20 and CHIP 

21 SEC. 5001. PROVIDER SCREENING AND OTHER ENROLL22 MENT REQUIREMENTS UNDER MEDICARE, 

23 MEDICAID, AND CHIP. 

24 (a) MEDICARE.—Section 1866(j) of the Social Secu25 rity Act (42 U.S.C. 1395cc(j)) is amended— 


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1 (1) in paragraph (1)(A), by adding at the end 

2 the following: ‘‘Such process shall include screening 

3 of providers and suppliers in accordance with para4 graph (2), a provisional period of enhanced oversight 

5 in accordance with paragraph (3), disclosure require6 ments in accordance with paragraph (4), the imposi7 tion of temporary enrollment moratoria in accord8 ance with paragraph (5), and the establishment of 

9 compliance programs in accordance with paragraph 

10 (6).’’; 

11 (2) by redesignating paragraph (2) as para12 graph (7); and 

13 (3) by inserting after paragraph (1) the fol14 lowing: 

15 ‘‘(2) PROVIDER SCREENING.— 

16 ‘‘(A) PROCEDURES.—Not later than 180 

17 days after the date of enactment of this para18 graph, the Secretary, in consultation with the 

19 Inspector General of the Department of Health 

20 and Human Services, shall establish procedures 

21 under which screening is conducted with respect 

22 to providers of medical or other items or serv23 ices and suppliers under the program under this 

24 title, the Medicaid program under title XIX, 

25 and the CHIP program under title XXI. 


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1 ‘‘(B) LEVEL OF SCREENING.—The Sec2 retary shall determine the level of screening 

3 conducted under this paragraph according to 

4 the risk of fraud, waste, and abuse, as deter5 mined by the Secretary, with respect to the cat6 egory of provider of medical or other items or 

7 services or supplier. Such screening— 

8 ‘‘(i) shall include a licensure check, 

9 which may include such checks across 

10 States; and 

11 ‘‘(ii) may, as the Secretary determines 

12 appropriate based on the risk of fraud, 

13 waste, and abuse described in the pre14 ceding sentence, include— 

15 ‘‘(I) a criminal background 

16 check; 

17 ‘‘(II) fingerprinting; 

18 ‘‘(III) unscheduled and unan19 nounced site visits, including 

20 preenrollment site visits; 

21 ‘‘(IV) database checks (including 

22 such checks across States); and 

23 ‘‘(V) such other screening as the 

24 Secretary determines appropriate. 

25 ‘‘(C) APPLICATION FEES.— 


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1 ‘‘(i) IN GENERAL.—Except as pro2 vided in clause (ii) or (iii), the Secretary 

3 shall impose a fee on each provider of med4 ical or other items or services or supplier 

5 with respect to which screening is con6 ducted under this paragraph in an amount 

7 equal to— 

8 ‘‘(I) for 2010, $350; and 

9 ‘‘(II) for 2011 and each subse10 quent year, the amount determined 

11 under this clause for the preceding 

12 year, adjusted by the percentage 

13 change in the consumer price index 

14 for all urban consumers (all items; 

15 United States city average) for the 

16 12-month period ending with June of 

17 the previous year. 

18 ‘‘(ii) TEMPORARY REDUCED FEE FOR

19 CURRENT PROVIDERS OF SERVICES AND

20 SUPPLIERS.—In the case of a provider of 

21 medical or other items or services or sup22 plier who is enrolled in the program under 

23 this title, title XIX, or title XXI as of the 

24 date of enactment of this paragraph, dur25 ing the period beginning on such date of 


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1 enactment and ending on the date that is 

2 1 year after such date, the amount of the 

3 fee imposed under this subparagraph shall 

4 be equal to $250. Such fee shall be im5 posed with respect to all providers of med6 ical or other items and services and sup7 pliers described in the preceding sentence, 

8 regardless of whether the provider or sup9 plier is due for revalidation of enrollment 

10 in the program during such period. 

11 ‘‘(iii) HARDSHIP EXCEPTION; WAIVER

12 FOR CERTAIN MEDICAID PROVIDERS.—The 

13 Secretary may, on a case-by-case basis, ex14 empt a provider of medical or other items 

15 or services or supplier from the imposition 

16 of an application fee under this subpara17 graph if the Secretary determines that the 

18 imposition of the application fee would re19 sult in a hardship. The Secretary may 

20 waive the application fee under this sub21 paragraph for providers enrolled in a State 

22 Medicaid program for whom the State 

23 demonstrates that imposition of the fee 

24 would impede beneficiary access to care. 


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1 ‘‘(iv) USE OF FUNDS.—Amounts col2 lected as a result of the imposition of a fee 

3 under this subparagraph shall be used by 

4 the Secretary for program integrity efforts, 

5 including to cover the costs of conducting 

6 screening under this paragraph and to 

7 carry out this subsection and section 

8 1128J. 

9 ‘‘(D) APPLICATION AND ENFORCEMENT.— 

10 ‘‘(i) NEW PROVIDERS OF SERVICES

11 AND SUPPLIERS.—The screening under 

12 this paragraph shall apply, in the case of 

13 a provider of medical or other items or 

14 services or supplier who is not enrolled in 

15 the program under this title, title XIX , or 

16 title XXI as of the date of enactment of 

17 this paragraph, on or after the date that is 

18 1 year after such date of enactment. 

19 ‘‘(ii) CURRENT PROVIDERS OF SERV20 ICES AND SUPPLIERS.—The screening 

21 under this paragraph shall apply, in the 

22 case of a provider of medical or other 

23 items or services or supplier who is en24 rolled in the program under this title, title 

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1 ment, on or after the date that is 2 years 

2 after such date of enactment. 

3 ‘‘(iii) REVALIDATION OF ENROLL4 MENT.—Effective beginning on the date 

5 that is 180 days after such date of enact6 ment, the screening under this paragraph 

7 shall apply with respect to the revalidation 

8 of enrollment of a provider of medical or 

9 other items or services or supplier in the 

10 program under this title, title XIX, or title 

11 XXI. 

12 ‘‘(iv) LIMITATION ON ENROLLMENT

13 AND REVALIDATION OF ENROLLMENT.—In 

14 no case may a provider of medical or other 

15 items or services or supplier who has not 

16 been screened under this paragraph be ini17 tially enrolled or reenrolled in the program 

18 under this title, title XIX, or title XXI on 

19 or after the date that is 3 years after such 

20 date of enactment. 

21 ‘‘(E) EXPEDITED RULEMAKING.—The Sec22 retary may promulgate an interim final rule to 

23 carry out this paragraph. 


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1 ‘‘(3) PROVISIONAL PERIOD OF ENHANCED

2 OVERSIGHT FOR NEW PROVIDERS OF SERVICES AND

3 SUPPLIERS.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 establish procedures to provide for a provisional 

6 period of not less than 30 days and not more 

7 than 1 year during which new providers of med8 ical or other items or services and suppliers, as 

9 the Secretary determines appropriate, including 

10 categories of providers or suppliers, would be 

11 subject to enhanced oversight, such as prepay12 ment review and payment caps, under the pro13 gram under this title, the Medicaid program 

14 under title XIX. and the CHIP program under 

15 title XXI. 

16 ‘‘(B) IMPLEMENTATION.—The Secretary 

17 may establish by program instruction or other18 wise the procedures under this paragraph. 

19 ‘‘(4) INCREASED DISCLOSURE REQUIRE20 MENTS.— 

21 ‘‘(A) DISCLOSURE.—A provider of medical 

22 or other items or services or supplier who sub23 mits an application for enrollment or revalida24 tion of enrollment in the program under this 

25 title , title XIX, or title XXI on or after the 


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1 date that is 1 year after the date of enactment 

2 of this paragraph shall disclose (in a form and 

3 manner and at such time as determined by the 

4 Secretary) any current or previous affiliation 

5 (directly or indirectly) with a provider of med6 ical or other items or services or supplier that 

7 has uncollected debt, has been or is subject to 

8 a payment suspension under a Federal health 

9 care program (as defined in section 1128B(f)), 

10 has been excluded from participation under the 

11 program under this title, the Medicaid program 

12 under title XIX, or the CHIP program under 

13 title XXI, or has had its billing privileges de14 nied or revoked. 

15 ‘‘(B) AUTHORITY TO DENY ENROLL16 MENT.—If the Secretary determines that such 

17 previous affiliation poses an undue risk of 

18 fraud, waste, or abuse, the Secretary may deny 

19 such application. Such a denial shall be subject 

20 to appeal in accordance with paragraph (7). 

21 ‘‘(5) AUTHORITY TO ADJUST PAYMENTS OF

22 PROVIDERS OF SERVICES AND SUPPLIERS WITH THE

23 SAME TAX IDENTIFICATION NUMBER FOR PAST-DUE

24 OBLIGATIONS.— 


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1 ‘‘(A) IN GENERAL.—Notwithstanding any 

2 other provision of this title, in the case of an 

3 applicable provider of services or supplier, the 

4 Secretary may make any necessary adjustments 

5 to payments to the applicable provider of serv6 ices or supplier under the program under this 

7 title in order to satisfy any past-due obligations 

8 described in subparagraph (B)(ii) of an obli9 gated provider of services or supplier. 

10 ‘‘(B) DEFINITIONS.—In this paragraph: 

11 ‘‘(i) IN GENERAL.—The term ‘applica12 ble provider of services or supplier’ means 

13 a provider of services or supplier that has 

14 the same taxpayer identification number 

15 assigned under section 6109 of the Inter16 nal Revenue Code of 1986 as is assigned 

17 to the obligated provider of services or sup18 plier under such section, regardless of 

19 whether the applicable provider of services 

20 or supplier is assigned a different billing 

21 number or national provider identification 

22 number under the program under this title 

23 than is assigned to the obligated provider 

24 of services or supplier. 


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1 ‘‘(ii) OBLIGATED PROVIDER OF SERV2 ICES OR SUPPLIER.—The term ‘obligated 

3 provider of services or supplier’ means a 

4 provider of services or supplier that owes a 

5 past-due obligation under the program 

6 under this title (as determined by the Sec7 retary). 

8 ‘‘(6) TEMPORARY MORATORIUM ON ENROLL9 MENT OF NEW PROVIDERS.— 

10 ‘‘(A) IN GENERAL.—The Secretary may 

11 impose a temporary moratorium on the enroll12 ment of new providers of services and suppliers, 

13 including categories of providers of services and 

14 suppliers, in the program under this title, under 

15 the Medicaid program under title XIX, or 

16 under the CHIP program under title XXI if the 

17 Secretary determines such moratorium is nec18 essary to prevent or combat fraud, waste, or 

19 abuse under either such program. 

20 ‘‘(B) LIMITATION ON REVIEW.—There 

21 shall be no judicial review under section 1869, 

22 section 1878, or otherwise, of a temporary mor23 atorium imposed under subparagraph (A). 

24 ‘‘(7) COMPLIANCE PROGRAMS.— 


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1 ‘‘(A) IN GENERAL.—On or after the date 

2 of implementation determined by the Secretary 

3 under subparagraph (C), a provider of medical 

4 or other items or services or supplier within a 

5 particular industry sector or category shall, as 

6 a condition of enrollment in the program under 

7 this title, title XIX, or title XXI, establish a 

8 compliance program that contains the core ele9 ments established under subparagraph (B) with 

10 respect to that provider or supplier and indus11 try or category. 

12 ‘‘(B) ESTABLISHMENT OF CORE ELE13 MENTS.—The Secretary, in consultation with 

14 the Inspector General of the Department of 

15 Health and Human Services, shall establish 

16 core elements for a compliance program under 

17 subparagraph (A) for providers or suppliers 

18 within a particular industry or category. 

19 ‘‘(C) TIMELINE FOR IMPLEMENTATION.— 

20 The Secretary shall determine the timeline for 

21 the establishment of the core elements under 

22 subparagraph (B) and the date of the imple23 mentation of subparagraph (A) for providers or 

24 suppliers within a particular industry or cat25 egory. The Secretary shall, in determining such 


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1 date of implementation, consider the extent to 

2 which the adoption of compliance programs by 

3 a provider of medical or other items or services 

4 or supplier is widespread in a particular indus5 try sector or with respect to a particular pro6 vider or supplier category.’’. 

7 (b) MEDICAID.— 

8 (1) STATE PLAN AMENDMENT.—Section 

9 1902(a) of the Social Security Act (42 U.S.C. 

10 1396a(a)), as amended by sections 1601(d) and 

11 1640, is amended— 

12 (A) in subsection (a)— 

13 (i) by striking ‘‘and’’ at the end of 

14 paragraph (74); 

15 (ii) by striking the period at the end 

16 of paragraph (75) and inserting a semi17 colon; and 

18 (iii) by inserting after paragraph (75) 

19 the following: 

20 ‘‘(76) provide that the State shall comply with 

21 provider and supplier screening, oversight, and re22 porting requirements in accordance with subsection 

23 (ii);’’; and 

24 (B) by adding at the end the following: 


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1 ‘‘(ii) PROVIDER AND SUPPLIER SCREENING, OVER2 SIGHT, AND REPORTING REQUIREMENTS.—For purposes 

3 of subsection (a)(75), the requirements of this subsection 

4 are the following: 

5 ‘‘(1) SCREENING.—The State complies with the 

6 process for screening providers and suppliers under 

7 this title, as established by the Secretary under sec8 tion 1886(j)(2). 

9 ‘‘(2) PROVISIONAL PERIOD OF ENHANCED

10 OVERSIGHT FOR NEW PROVIDERS AND SUPPLIERS.— 

11 The State complies with procedures to provide for a 

12 provisional period of enhanced oversight for new pro13 viders and suppliers under this title, as established 

14 by the Secretary under section 1886(j)(3). 

15 ‘‘(3) DISCLOSURE REQUIREMENTS.—The State 

16 requires providers and suppliers under the State 

17 plan or under a waiver of the plan to comply with 

18 the disclosure requirements established by the Sec19 retary under section 1886(j)(4). 

20 ‘‘(4) TEMPORARY MORATORIUM ON ENROLL21 MENT OF NEW PROVIDERS OR SUPPLIERS.— 

22 ‘‘(A) TEMPORARY MORATORIUM IMPOSED

23 BY THE SECRETARY.— 

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

25 (ii), the State complies with any temporary 


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1 moratorium on the enrollment of new pro2 viders or suppliers imposed by the Sec3 retary under section 1886(j)(6). 

4 ‘‘(ii) EXCEPTION.—A State shall not 

5 be required to comply with a temporary 

6 moratorium described in clause (i) if the 

7 State determines that the imposition of 

8 such temporary moratorium would ad9 versely impact beneficiaries’ access to med10 ical assistance. 

11 ‘‘(B) MORATORIUM ON ENROLLMENT OF

12 PROVIDERS AND SUPPLIERS.—At the option of 

13 the State, the State imposes, for purposes of 

14 entering into participation agreements with pro15 viders or suppliers under the State plan or 

16 under a waiver of the plan, periods of enroll17 ment moratoria, or numerical caps or other lim18 its, for providers or suppliers identified by the 

19 Secretary as being at high-risk for fraud, waste, 

20 or abuse as necessary to combat fraud, waste, 

21 or abuse, but only if the State determines that 

22 the imposition of any such period, cap, or other 

23 limits would not adversely impact beneficiaries’ 

24 access to medical assistance. 


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1 ‘‘(5) COMPLIANCE PROGRAMS.—The State re2 quires providers and suppliers under the State plan 

3 or under a waiver of the plan to establish, in accord4 ance with the requirements of section 1866(j)(7), a 

5 compliance program that contains the core elements 

6 established under subparagraph (B) of that section 

7 1866(j)(7) for providers or suppliers within a par8 ticular industry or category. 

9 ‘‘(6) REPORTING OF ADVERSE PROVIDER AC10 TIONS.—The State complies with the national sys11 tem for reporting criminal and civil convictions, 

12 sanctions, negative licensure actions, and other ad13 verse provider actions to the Secretary, through the 

14 Administrator of the Centers for Medicare & Med15 icaid Services, in accordance with regulations of the 

16 Secretary. 

17 ‘‘(7) ENROLLMENT AND NPI OF ORDERING OR

18 REFERRING PROVIDERS.—The State requires— 

19 ‘‘(A) all ordering or referring physicians or 

20 other professionals to be enrolled under the 

21 State plan or under a waiver of the plan as a 

22 participating provider; and 

23 ‘‘(B) the national provider identifier of any 

24 ordering or referring physician or other profes25 sional to be specified on any claim for payment 


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1 that is based on an order or referral of the phy2 sician or other professional. 

3 ‘‘(8) OTHER STATE OVERSIGHT.—Nothing in 

4 this subsection shall be interpreted to preclude or 

5 limit the ability of a State to engage in provider and 

6 supplier screening or enhanced provider and supplier 

7 oversight activities beyond those required by the Sec8 retary.’’. 

9 (2) DISCLOSURE OF MEDICARE TERMINATED

10 PROVIDERS AND SUPPLIERS TO STATES.—The Ad11 ministrator of the Centers for Medicare & Medicaid 

12 Services shall establish a process for making avail13 able to the each State agency with responsibility for 

14 administering a State Medicaid plan (or a waiver of 

15 such plan) under title XIX of the Social Security 

16 Act or a child health plan under title XXI the name, 

17 national provider identifier, and other identifying in18 formation for any provider of medical or other items 

19 or services or supplier under the Medicare program 

20 under title XVIII or under the CHIP program under 

21 title XXI that is terminated from participation 

22 under that program within 30 days of the termi23 nation (and, with respect to all such providers or 

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1 gram on the date of enactment of this Act, within 

2 90 days of such date). 

3 (3) CONFORMING AMENDMENT.—Section 

4 1902(a)(23) of the Social Security Act (42 U.S.C. 

5 1396a), is amended by inserting before the semi6 colon at the end the following: ‘‘or by a provider or 

7 supplier to which a moratorium under subsection 

8 (ii)(4) is applied during the period of such morato9 rium’’. 

10 (c) CHIP.—Section 2107(e)(1) of the Social Security 

11 Act (42 U.S.C. 1397gg(e)(1)), as amended by section 

12 1611(d), is amended— 

13 (1) by redesignating subparagraphs (D) 

14 through (M) as subparagraphs (E) through (N), re15 spectively; and 

16 (2) by inserting after subparagraph (C), the fol17 lowing: 

18 ‘‘(D) Subsections (a)(76) and (ii) of sec19 tion 1902 (relating to provider and supplier 

20 screening, oversight, and reporting require21 ments).’’. 

22 SEC. 5002. ENHANCED MEDICARE AND MEDICAID PRO23 GRAM INTEGRITY PROVISIONS. 

24 (a) IN GENERAL.—Part A of title XI of the Social 

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1 tion 4202, is amended by inserting after section 1128I the 

2 following new section: 

3 ‘‘SEC. 1128J. MEDICARE AND MEDICAID PROGRAM INTEG4 RITY PROVISIONS. 

5 ‘‘(a) DATA MATCHING.— 

6 ‘‘(1) INTEGRATED DATA REPOSITORY.— 

7 ‘‘(A) INCLUSION OF CERTAIN DATA.— 

8 ‘‘(i) IN GENERAL.—The Integrated 

9 Data Repository of the Centers for Medi10 care & Medicaid Services shall include, at 

11 a minimum, claims and payment data from 

12 the following: 

13 ‘‘(I) The programs under titles 

14 XVIII and XIX (including parts A, B, 

15 C, and D of title XVIII). 

16 ‘‘(II) The program under title 

17 XXI. 

18 ‘‘(III) Health-related programs 

19 administered by the Secretary of Vet20 erans Affairs. 

21 ‘‘(IV) Health-related programs 

22 administered by the Secretary of De23 fense. 


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1 ‘‘(V) The program of old-age, 

2 survivors, and disability insurance 

3 benefits established under title II. 

4 ‘‘(VI) The Indian Health Service 

5 and the Contract Health Service pro6 gram. 

7 ‘‘(ii) PRIORITY FOR INCLUSION OF

8 CERTAIN DATA.—Inclusion of the data de9 scribed in subclause (I) of such clause in 

10 the Integrated Data Repository shall be a 

11 priority. Data described in subclauses (II) 

12 through (VI) of such clause shall be in13 cluded in the Integrated Data Repository 

14 as appropriate. 

15 ‘‘(B) DATA SHARING AND MATCHING.— 

16 ‘‘(i) IN GENERAL.—The Secretary 

17 shall enter into agreements with the indi18 viduals described in clause (ii) under which 

19 such individuals share and match data in 

20 the system of records of the respective 

21 agencies of such individuals with data in 

22 the system of records of the Department of 

23 Health and Human Services for the pur24 pose of identifying potential fraud, waste, 


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1 and abuse under the programs under titles 

2 XVIII and XIX. 

3 ‘‘(ii) INDIVIDUALS DESCRIBED.—The 

4 following individuals are described in this 

5 clause: 

6 ‘‘(I) The Commissioner of Social 

7 Security. 

8 ‘‘(II) The Secretary of Veterans 

9 Affairs. 

10 ‘‘(III) The Secretary of Defense. 

11 ‘‘(IV) The Director of the Indian 

12 Health Service. 

13 ‘‘(iii) DEFINITION OF SYSTEM OF

14 RECORDS.—For purposes of this para15 graph, the term ‘system of records’ has the 

16 meaning given such term in section 

17 552a(a)(5) of title 5, United States Code. 

18 ‘‘(2) ACCESS TO CLAIMS AND PAYMENT DATA19 BASES.—For purposes of conducting law enforce20 ment and oversight activities and to the extent con21 sistent with applicable information, privacy, security, 

22 and disclosure laws, including the regulations pro23 mulgated under the Health Insurance Portability 

24 and Accountability Act of 1996 and section 552a of 

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1 mation systems security requirements under such 

2 laws or otherwise required by the Secretary, the In3 spector General of the Department of Health and 

4 Human Services and the Attorney General shall 

5 have access to claims and payment data of the De6 partment of Health and Human Services and its 

7 contractors related to titles XVIII, XIX, and XXI. 

8 ‘‘(b) OIG AUTHORITY TO OBTAIN INFORMATION.— 

9 ‘‘(1) IN GENERAL.—Notwithstanding and in ad10 dition to any other provision of law, the Inspector 

11 General of the Department of Health and Human 

12 Services may, for purposes of protecting the integ13 rity of the programs under titles XVIII and XIX, 

14 obtain information from any individual (including a 

15 beneficiary provided all applicable privacy protec16 tions are followed) or entity that— 

17 ‘‘(A) is a provider of medical or other 

18 items or services, supplier, grant recipient, con19 tractor, or subcontractor; or 

20 ‘‘(B) directly or indirectly provides, orders, 

21 manufactures, distributes, arranges for, pre22 scribes, supplies, or receives medical or other 

23 items or services payable by any Federal health 

24 care program (as defined in section 1128B(f)) 


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1 regardless of how the item or service is paid 

2 for, or to whom such payment is made. 

3 ‘‘(2) INCLUSION OF CERTAIN INFORMATION.— 

4 Information which the Inspector General may obtain 

5 under paragraph (1) includes any supporting docu6 mentation necessary to validate claims for payment 

7 or payments under title XVIII or XIX, including a 

8 prescribing physician’s medical records for an indi9 vidual who is prescribed an item or service which is 

10 covered under part B of title XVIII, a covered part 

11 D drug (as defined in section 1860D–2(e)) for which 

12 payment is made under an MA–PD plan under part 

13 C of such title, or a prescription drug plan under 

14 part D of such title, and any records necessary for 

15 evaluation of the economy, efficiency, and effective16 ness of the programs under titles XVIII and XIX. 

17 ‘‘(c) ADMINISTRATIVE REMEDY FOR KNOWING PAR18 TICIPATION BY BENEFICIARY IN HEALTH CARE FRAUD

19 SCHEME.— 

20 ‘‘(1) IN GENERAL.—In addition to any other 

21 applicable remedies, if an applicable individual has 

22 knowingly participated in a Federal health care 

23 fraud offense or a conspiracy to commit a Federal 

24 health care fraud offense, the Secretary shall impose 


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1 an appropriate administrative penalty commensurate 

2 with the offense or conspiracy. 

3 ‘‘(2) APPLICABLE INDIVIDUAL.—For purposes 

4 of paragraph (1), the term ‘applicable individual’ 

5 means an individual— 

6 ‘‘(A) entitled to, or enrolled for, benefits 

7 under part A of title XVIII or enrolled under 

8 part B of such title; 

9 ‘‘(B) eligible for medical assistance under 

10 a State plan under title XIX or under a waiver 

11 of such plan; or 

12 ‘‘(C) eligible for child health assistance 

13 under a child health plan under title XXI. 

14 ‘‘(d) REPORTING AND RETURNING OF OVERPAY15 MENTS.— 

16 ‘‘(1) IN GENERAL.—If a person has received an 

17 overpayment, the person shall— 

18 ‘‘(A) report and return the overpayment to 

19 the Secretary, the State, an intermediary, a 

20 carrier, or a contractor, as appropriate, at the 

21 correct address; and 

22 ‘‘(B) notify the Secretary, State, inter23 mediary, carrier, or contractor to whom the 

24 overpayment was returned in writing of the rea25 son for the overpayment. 


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1 ‘‘(2) DEADLINE FOR REPORTING AND RETURN2 ING OVERPAYMENTS.—An overpayment must be re3 ported and returned under paragraph (1) by the 

4 later of— 

5 ‘‘(A) the date which is 60 days after the 

6 date on which the overpayment was identified; 

7 or 

8 ‘‘(B) the date any corresponding cost re9 port is due, if applicable. 

10 ‘‘(3) ENFORCEMENT.—Any overpayment re11 tained by a person after the deadline for reporting 

12 and returning the overpayment under paragraph (2) 

13 is an obligation (as defined in section 3729(b)(3) of 

14 title 31, United States Code) for purposes of section 

15 3729 of such title. 

16 ‘‘(4) DEFINITIONS.—In this subsection: 

17 ‘‘(A) KNOWING AND KNOWINGLY.—The 

18 terms ‘knowing’ and ‘knowingly’ have the mean19 ing given those terms in section 3729(b) of title 

20 31, United States Code. 

21 ‘‘(B) OVERPAYMENT.—The term ‘‘overpay22 ment’’ means any funds that a person receives 

23 or retains under title XVIII or XIX to which 

24 the person, after applicable reconciliation, is not 

25 entitled under such title. 


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1 ‘‘(C) PERSON.— 

2 ‘‘(i) IN GENERAL.—The term ‘person’ 

3 means a provider of services, supplier, 

4 medicaid managed care organization (as 

5 defined in section 1903(m)(1)(A)), Medi6 care Advantage organization (as defined in 

7 section 1859(a)(1)), or PDP sponsor (as 

8 defined in section 1860D–41(a)(13)). 

9 ‘‘(ii) EXCLUSION.—Such term does 

10 not include a beneficiary. 

11 ‘‘(e) INCLUSION OF NATIONAL PROVIDER IDENTI12 FIER ON ALL APPLICATIONS AND CLAIMS.—The Sec13 retary shall promulgate a regulation that requires, not 

14 later than January 1, 2011, all providers of medical or 

15 other items or services and suppliers under the programs 

16 under titles XVIII and XIX that qualify for a national 

17 provider identifier to include their national provider identi18 fier on all applications to enroll in such programs and on 

19 all claims for payment submitted under such programs.’’. 

20 (b) ACCESS TO DATA.— 

21 (1) MEDICARE PART D.—Section 1860D– 

22 15(f)(2) of the Social Security Act (42 U.S.C. 

23 1395w–116(f)(2)) is amended by striking ‘‘may be 

24 used by’’ and all that follows through the period at 

25 the end and inserting ‘‘may be used— 


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1 ‘‘(A) by officers, employees, and contrac2 tors of the Department of Health and Human 

3 Services for the purposes of, and to the extent 

4 necessary in— 

5 ‘‘(i) carrying out this section; and 

6 ‘‘(ii) conducting oversight, evaluation, 

7 and enforcement under this title; and 

8 ‘‘(B) by the Attorney General and the 

9 Comptroller General of the United States for 

10 the purposes of, and to the extent necessary in, 

11 carrying out health oversight activities.’’. 

12 (2) DATA MATCHING.—Section 552a(a)(8)(B) 

13 of title 5, United States Code, is amended— 

14 (A) in clause (vii), by striking ‘‘or’’ at the 

15 end; 

16 (B) in clause (viii), by inserting ‘‘or’’ after 

17 the semicolon; and 

18 (C) by adding at the end the following new 

19 clause: 

20 ‘‘(ix) matches performed by the Sec21 retary of Health and Human Services or 

22 the Inspector General of the Department 

23 of Health and Human Services with re24 spect to potential fraud, waste, and abuse, 


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1 including matches of a system of records 

2 with non-Federal records;’’. 

3 (3) MATCHING AGREEMENTS WITH THE COM4 MISSIONER OF SOCIAL SECURITY.—Section 205(r) of 

5 the Social Security Act (42 U.S.C. 405(r)) is amend6 ed by adding at the end the following new para7 graph: 

8 ‘‘(9)(A) The Commissioner of Social Security 

9 shall, upon the request of the Secretary or the In10 spector General of the Department of Health and 

11 Human Services— 

12 ‘‘(i) enter into an agreement with the Sec13 retary or such Inspector General for the pur14 pose of matching data in the system of records 

15 of the Social Security Administration and the 

16 system of records of the Department of Health 

17 and Human Services; and 

18 ‘‘(ii) include in such agreement safeguards 

19 to assure the maintenance of the confidentiality 

20 of any information disclosed. 

21 ‘‘(B) For purposes of this paragraph, the term 

22 ‘system of records’ has the meaning given such term 

23 in section 552a(a)(5) of title 5, United States 

24 Code.’’. 


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1 (c) WITHHOLDING OF FEDERAL MATCHING PAY2 MENTS FOR STATES THAT FAIL TO REPORT ENROLLEE

3 ENCOUNTER DATA IN THE MEDICAID STATISTICAL IN4 FORMATION SYSTEM.—Section 1903(i) of the Social Secu5 rity Act (42 U.S.C. 1396b(i)) is amended— 

6 (1) in paragraph (23), by striking ‘‘or’’ at the 

7 end; 

8 (2) in paragraph (24), by striking the period at 

9 the end and inserting ‘‘; or’’; and 

10 (3) by adding at the end the following new 

11 paragraph:. 

12 ‘‘(25) with respect to any amounts expended for 

13 medical assistance for individuals for whom the 

14 State does not report enrollee encounter data (as de15 fined by the Secretary) to the Medicaid Statistical 

16 Information System (MSIS) in a timely manner (as 

17 determined by the Secretary).’’. 

18 (d) PERMISSIVE EXCLUSIONS AND CIVIL MONETARY

19 PENALTIES.— 

20 (1) PERMISSIVE EXCLUSIONS.—Section 1128(b) 

21 of the Social Security Act (42 U.S.C. 1320a–7(b)) 

22 is amended by adding at the end the following new 

23 paragraph: 

24 ‘‘(16) MAKING FALSE STATEMENTS OR MIS25 REPRESENTATION OF MATERIAL FACTS.—Any indiVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01360 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 vidual or entity that knowingly makes or causes to 

2 be made any false statement, omission, or misrepre3 sentation of a material fact in any application, 

4 agreement, bid, or contract to participate or enroll 

5 as a provider of services or supplier under a Federal 

6 health care program (as defined in section 

7 1128B(f)), including Medicare Advantage organiza8 tions under part C of title XVIII, prescription drug 

9 plan sponsors under part D of title XVIII, medicaid 

10 managed care organizations under title XIX, and en11 tities that apply to participate as providers of serv12 ices or suppliers in such managed care organizations 

13 and such plans.’’. 

14 (2) CIVIL MONETARY PENALTIES.— 

15 (A) IN GENERAL.—Section 1128A(a) of 

16 the Social Security Act (42 U.S.C. 1320a– 

17 7a(a)) is amended— 

18 (i) in paragraph (1)(D), by striking 

19 ‘‘was excluded’’ and all that follows 

20 through the period at the end and insert21 ing ‘‘was excluded from the Federal health 

22 care program (as defined in section 

23 1128B(f)) under which the claim was 

24 made pursuant to Federal law.’’; 


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1 (ii) in paragraph (6), by striking ‘‘or’’ 

2 at the end; 

3 (iii) by inserting after paragraph (7), 

4 the following new paragraphs: 

5 ‘‘(8) orders or prescribes a medical or other 

6 item or service during a period in which the person 

7 was excluded from a Federal health care program 

8 (as so defined), in the case where the person knows 

9 or should know that a claim for such medical or 

10 other item or service will be made under such a pro11 gram; 

12 ‘‘(9) knowingly makes or causes to be made any 

13 false statement, omission, or misrepresentation of a 

14 material fact in any application, bid, or contract to 

15 participate or enroll as a provider of services or a 

16 supplier under a Federal health care program (as so 

17 defined), including Medicare Advantage organiza18 tions under part C of title XVIII, prescription drug 

19 plan sponsors under part D of title XVIII, medicaid 

20 managed care organizations under title XIX, and en21 tities that apply to participate as providers of serv22 ices or suppliers in such managed care organizations 

23 and such plans; 

24 ‘‘(10) knows of an overpayment (as defined in 

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1 port and return the overpayment in accordance with 

2 such section;’’; 

3 (iv) in the first sentence— 

4 (I) by striking the ‘‘or’’ after 

5 ‘‘prohibited relationship occurs;’’; and 

6 (II) by striking ‘‘act)’’ and in7 serting ‘‘act; or in cases under para8 graph (9), $50,000 for each false 

9 statement or misrepresentation of a 

10 material fact)’’; and 

11 (v) in the second sentence, by striking 

12 ‘‘purpose)’’ and inserting ‘‘purpose; or in 

13 cases under paragraph (9), an assessment 

14 of not more than 3 times the total amount 

15 claimed for each item or service for which 

16 payment was made based upon the applica17 tion containing the false statement or mis18 representation of a material fact)’’. 

19 (B) CLARIFICATION OF TREATMENT OF

20 CERTAIN CHARITABLE AND OTHER INNOCUOUS

21 PROGRAMS.—Section 1128A(i)(6) of the Social 

22 Security Act (42 U.S.C. 1320a–7a(i)(6)) is 

23 amended— 

24 (i) in subparagraph (C), by striking 

25 ‘‘or’’ at the end; 


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1 (ii) in subparagraph (D), as redesig2 nated by section 4331(e) of the Balanced 

3 Budget Act of 1997 (Public Law 105–33), 

4 by striking the period at the end and in5 serting a semicolon; 

6 (iii) by redesignating subparagraph 

7 (D), as added by section 4523(c) of such 

8 Act, as subparagraph (E) and striking the 

9 period at the end and inserting ‘‘; or’’; and 

10 (iv) by adding at the end the following 

11 new subparagraphs: 

12 ‘‘(F) any other remuneration which pro13 motes access to care and poses a low risk of 

14 harm to patients and Federal health care pro15 grams (as defined in section 1128B(f) and des16 ignated by the Secretary under regulations); 

17 ‘‘(G) the offer or transfer of items or serv18 ices for free or less than fair market value by 

19 a person, if— 

20 ‘‘(i) the items or services consist of 

21 coupons, rebates, or other rewards from a 

22 retailer; 

23 ‘‘(ii) the items or services are offered 

24 or transferred on equal terms available to 


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1 the general public, regardless of health in2 surance status; and 

3 ‘‘(iii) the offer or transfer of the items 

4 or services is not tied to the provision of 

5 other items or services reimbursed in whole 

6 or in part by the program under title 

7 XVIII or a State health care program (as 

8 defined in section 1128(h)); 

9 ‘‘(H) the offer or transfer of items or serv10 ices for free or less than fair market value by 

11 a person, if— 

12 ‘‘(i) the items or services are not of13 fered as part of any advertisement or solic14 itation; 

15 ‘‘(ii) the items or services are not tied 

16 to the provision of other services reim17 bursed in whole or in part by the program 

18 under title XVIII or a State health care 

19 program (as so defined); 

20 ‘‘(iii) there is a reasonable connection 

21 between the items or services and the med22 ical care of the individual; and 

23 ‘‘(iv) the person provides the items or 

24 services after determining in good faith 

25 that the individual is in financial need; or 


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1 ‘‘(I) effective on a date specified by the 

2 Secretary (but not earlier than January 1, 

3 2011), the waiver by a PDP sponsor of a pre4 scription drug plan under part D of title XVIII 

5 or an MA organization offering an MA–PD 

6 plan under part C of such title of any copay7 ment for the first fill of a covered part D drug 

8 (as defined in section 1860D–2(e)) that is a ge9 neric drug for individuals enrolled in the pre10 scription drug plan or MA–PD plan, respec11 tively.’’. 

12 (e) TESTIMONIAL SUBPOENA AUTHORITY IN EXCLU13 SION-ONLY CASES.—Section 1128(f) of the Social Secu14 rity Act (42 U.S.C. 1320a–7(f)) is amended by adding at 

15 the end the following new paragraph: 

16 ‘‘(4) The provisions of subsections (d) and (e) 

17 of section 205 shall apply with respect to this sec18 tion to the same extent as they are applicable with 

19 respect to title II. The Secretary may delegate the 

20 authority granted by section 205(d) (as made appli21 cable to this section) to the Inspector General of the 

22 Department of Health and Human Services for pur23 poses of any investigation under this section.’’. 

24 (f) REVISING THE INTENT REQUIREMENT FOR

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1 curity Act (42 U.S.C. 1320a–7b) is amended by adding 

2 at the end the following new subsection: 

3 ‘‘(g) With respect to violations of this section, a per4 son need not have actual knowledge of this section or spe5 cific intent to commit a violation of this section.’’. 

6 (g) SURETY BOND REQUIREMENTS.— 

7 (1) DURABLE MEDICAL EQUIPMENT.—Section 

8 1834(a)(16)(B) of the Social Security Act (42 

9 U.S.C. 1395m(a)(16)(B)) is amended by inserting 

10 ‘‘that the Secretary determines is commensurate 

11 with the volume of the billing of the supplier’’ before 

12 the period at the end. 

13 (2) HOME HEALTH AGENCIES.—Section 

14 1861(o)(7)(C) of the Social Security Act (42 U.S.C. 

15 1395x(o)(7)(C)) is amended by inserting ‘‘that the 

16 Secretary determines is commensurate with the vol17 ume of the billing of the home health agency’’ before 

18 the semicolon at the end. 

19 (3) REQUIREMENTS FOR CERTAIN OTHER PRO20 VIDERS OF SERVICES AND SUPPLIERS.—Section 

21 1862 of the Social Security Act (42 U.S.C. 1395y) 

22 is amended by adding at the end the following new 

23 subsection: 

24 ‘‘(n) REQUIREMENT OF A SURETY BOND FOR CER25 TAIN PROVIDERS OF SERVICES AND SUPPLIERS.— 


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1 ‘‘(1) IN GENERAL.—The Secretary may require 

2 a provider of services or supplier described in para3 graph (2) to provide the Secretary on a continuing 

4 basis with a surety bond in a form specified by the 

5 Secretary in an amount (not less than $50,000) that 

6 the Secretary determines is commensurate with the 

7 volume of the billing of the provider of services or 

8 supplier. The Secretary may waive the requirement 

9 of a bond under the preceding sentence in the case 

10 of a provider of services or supplier that provides a 

11 comparable surety bond under State law. 

12 ‘‘(2) PROVIDER OF SERVICES OR SUPPLIER DE13 SCRIBED.—A provider of services or supplier de14 scribed in this paragraph is a provider of services or 

15 supplier the Secretary determines appropriate based 

16 on the level of risk involved with respect to the pro17 vider of services or supplier, and consistent with the 

18 surety bond requirements under sections 

19 1834(a)(16)(B) and 1861(o)(7)(C).’’. 

20 (h) SUSPENSION OF MEDICARE AND MEDICAID PAY21 MENTS PENDING INVESTIGATION OF CREDIBLE ALLEGA22 TIONS OF FRAUD.— 

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1 section (g)(3), is amended by adding at the end the 

2 following new subsection: 

3 ‘‘(o) SUSPENSION OF PAYMENTS PENDING INVES4 TIGATION OF CREDIBLE ALLEGATIONS OF FRAUD.— 

5 ‘‘(1) IN GENERAL.—The Secretary may suspend 

6 payments to a provider of services or supplier under 

7 this title pending an investigation of a credible alle8 gation of fraud against the provider of services or 

9 supplier, unless the Secretary determines there is 

10 good cause not to suspend such payments. 

11 ‘‘(2) CONSULTATION.—The Secretary shall con12 sult with the Inspector General of the Department 

13 of Health and Human Services in determining 

14 whether there is a credible allegation of fraud 

15 against a provider of services or supplier. 

16 ‘‘(3) PROMULGATION OF REGULATIONS.—The 

17 Secretary shall promulgate regulations to carry out 

18 this subsection and section 1903(i)(2)(C).’’. 

19 (2) MEDICAID.—Section 1903(i)(2) of such Act 

20 (42 U.S.C. 1396b(i)(2)) is amended— 

21 (A) in subparagraph (A), by striking ‘‘or’’ 

22 at the end; and 

23 (B) by inserting after subparagraph (B), 

24 the following: 


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1 ‘‘(C) by any individual or entity to whom 

2 the State has failed to suspend payments under 

3 the plan during any period when there is pend4 ing an investigation of a credible allegation of 

5 fraud against the individual or entity, as deter6 mined by the State in accordance with regula7 tions promulgated by the Secretary for pur8 poses of section 1862(o) and this subparagraph, 

9 unless the State determines in accordance with 

10 such regulations there is good cause not to sus11 pend such payments; or’’. 

12 (i) INCREASED FUNDING TO FIGHT FRAUD AND

13 ABUSE.— 

14 (1) IN GENERAL.—Section 1817(k) of the So15 cial Security Act (42 U.S.C. 1395i(k)) is amended— 

16 (A) by adding at the end the following new 

17 paragraph: 

18 ‘‘(7) ADDITIONAL FUNDING.—In addition to the 

19 funds otherwise appropriated to the Account from 

20 the Trust Fund under paragraphs (3) and (4) and 

21 for purposes described in paragraphs (3)(C) and 

22 (4)(A), there are hereby appropriated an additional 

23 $10,000,000 to such Account from such Trust Fund 

24 for each of fiscal years 2011 through 2020. The 

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1 located in the same proportion as the total funding 

2 appropriated with respect to paragraphs (3)(A) and 

3 (4)(A) was allocated with respect to fiscal year 

4 2010, and shall be available without further appro5 priation until expended.’’; and 

6 (B) in paragraph (4)(A), by inserting 

7 ‘‘until expended’’ after ‘‘appropriation’’. 

8 (2) INDEXING OF AMOUNTS APPROPRIATED.— 

9 (A) DEPARTMENTS OF HEALTH AND

10 HUMAN SERVICES AND JUSTICE.—Section 

11 1817(k)(3)(A)(i) of the Social Security Act (42 

12 U.S.C. 1395i(k)(3)(A)(i)) is amended— 

13 (i) in subclause (III), by inserting 

14 ‘‘and’’ at the end; 

15 (ii) in subclause (IV)— 

16 (I) by striking ‘‘for each of fiscal 

17 years 2007, 2008, 2009, and 2010’’ 

18 and inserting ‘‘for each fiscal year 

19 after fiscal year 2006’’; and 

20 (II) by striking ‘‘; and’’ and in21 serting a period; and 

22 (iii) by striking subclause (V). 

23 (B) OFFICE OF THE INSPECTOR GENERAL

24 OF THE DEPARTMENT OF HEALTH AND HUMAN

25 SERVICES.—Section 1817(k)(3)(A)(ii) of such 


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1 Act (42 U.S.C. 1395i(k)(3)(A)(ii)) is amend2 ed— 

3 (i) in subclause (VIII), by inserting 

4 ‘‘and’’ at the end; 

5 (ii) in subclause (IX)— 

6 (I) by striking ‘‘for each of fiscal 

7 years 2008, 2009, and 2010’’ and in8 serting ‘‘for each fiscal year after fis9 cal year 2007’’; and 

10 (II) by striking ‘‘; and’’ and in11 serting a period; and 

12 (iii) by striking subclause (X). 

13 (C) FEDERAL BUREAU OF INVESTIGA14 TION.—Section 1817(k)(3)(B) of the Social Se15 curity Act (42 U.S.C. 1395i(k)(3)(B)) is 

16 amended— 

17 (i) in clause (vii), by inserting ‘‘and’’ 

18 at the end; 

19 (ii) in clause (viii)— 

20 (I) by striking ‘‘for each of fiscal 

21 years 2007, 2008, 2009, and 2010’’ 

22 and inserting ‘‘for each fiscal year 

23 after fiscal year 2006’’; and 

24 (II) by striking ‘‘; and’’ and in25 serting a period; and 


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1 (iii) by striking clause (ix). 

2 (D) MEDICARE INTEGRITY PROGRAM.— 

3 Section 1817(k)(4)(C) of the Social Security 

4 Act (42 U.S.C. 1395i(k)(4)(C)) is amended by 

5 adding at the end the following new clause: 

6 ‘‘(ii) For each fiscal year after 2010, 

7 by the percentage increase in the consumer 

8 price index for all urban consumers (all 

9 items; United States city average) over the 

10 previous year.’’. 

11 (j) MEDICARE INTEGRITY PROGRAM AND MEDICAID

12 INTEGRITY PROGRAM.— 

13 (1) MEDICARE INTEGRITY PROGRAM.— 

14 (A) REQUIREMENT TO PROVIDE PERFORM15 ANCE STATISTICS.—Section 1893(c) of the So16 cial Security Act (42 U.S.C. 1395ddd(c)) is 

17 amended— 

18 (i) in paragraph (3), by striking 

19 ‘‘and’’ at the end; 

20 (ii) by redesignating paragraph (4) as 

21 paragraph (5); and 

22 (iii) by inserting after paragraph (3) 

23 the following new paragraph: 

24 ‘‘(4) the entity agrees to provide the Secretary 

25 and the Inspector General of the Department of 


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1 Health and Human Services with such performance 

2 statistics (including the number and amount of over3 payments recovered, the number of fraud referrals, 

4 and the return on investment of such activities by 

5 the entity) as the Secretary or the Inspector General 

6 may request; and’’. 

7 (B) EVALUATIONS AND ANNUAL RE8 PORT.—Section 1893 of the Social Security Act 

9 (42 U.S.C. 1395ddd) is amended by adding at 

10 the end the following new subsection: 

11 ‘‘(i) EVALUATIONS AND ANNUAL REPORT.— 

12 ‘‘(1) EVALUATIONS.—The Secretary shall con13 duct evaluations of eligible entities which the Sec14 retary contracts with under the Program not less 

15 frequently than every 3 years. 

16 ‘‘(2) ANNUAL REPORT.—Not later than 180 

17 days after the end of each fiscal year (beginning 

18 with fiscal year 2011), the Secretary shall submit a 

19 report to Congress which identifies— 

20 ‘‘(A) the use of funds, including funds 

21 transferred from the Federal Hospital Insur22 ance Trust Fund under section 1817 and the 

23 Federal Supplementary Insurance Trust Fund 

24 under section 1841, to carry out this section; 

25 and 


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1 ‘‘(B) the effectiveness of the use of such 

2 funds.’’. 

3 (C) FLEXIBILITY IN PURSUING FRAUD

4 AND ABUSE.—Section 1893(a) of the Social Se5 curity Act (42 U.S.C. 1395ddd(a)) is amended 

6 by inserting ‘‘, or otherwise,’’ after ‘‘entities’’. 

7 (2) MEDICAID INTEGRITY PROGRAM.— 

8 (A) REQUIREMENT TO PROVIDE PERFORM9 ANCE STATISTICS.—Section 1936(c)(2) of the 

10 Social Security Act (42 U.S.C. 1396u–6(c)(2)) 

11 is amended— 

12 (i) by redesignating subparagraph (D) 

13 as subparagraph (E); and 

14 (ii) by inserting after subparagraph 

15 (C) the following new subparagraph: 

16 ‘‘(D) The entity agrees to provide the Sec17 retary and the Inspector General of the Depart18 ment of Health and Human Services with such 

19 performance statistics (including the number 

20 and amount of overpayments recovered, the 

21 number of fraud referrals, and the return on in22 vestment of such activities by the entity) as the 

23 Secretary or the Inspector General may re24 quest.’’. 


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1 (B) EVALUATIONS AND ANNUAL RE2 PORT.—Section 1936(e) of the Social Security 

3 Act (42 U.S.C. 1396u–7(e)) is amended— 

4 (i) by redesignating paragraph (4) as 

5 paragraph (5); and 

6 (ii) by inserting after paragraph (3) 

7 the following new paragraph: 

8 ‘‘(4) EVALUATIONS.—The Secretary shall con9 duct evaluations of eligible entities which the Sec10 retary contracts with under the Program not less 

11 frequently than every 3 years.’’. 

12 (k) EXPANDED APPLICATION OF HARDSHIP WAIV13 ERS FOR EXCLUSIONS.—Section 1128(c)(3)(B) of the So14 cial Security Act (42 U.S.C. 1320a–7(c)(3)(B)) is amend15 ed by striking ‘‘individuals entitled to benefits under part 

16 A of title XVIII or enrolled under part B of such title, 

17 or both’’ and inserting ‘‘beneficiaries (as defined in section 

18 1128A(i)(5)) of that program’’. 

19 SEC. 5003. ELIMINATION OF DUPLICATION BETWEEN THE 

20 HEALTHCARE INTEGRITY AND PROTECTION 

21 DATA BANK AND THE NATIONAL PRACTI22 TIONER DATA BANK. 

23 (a) INFORMATION REPORTED BY FEDERAL AGEN24 CIES AND HEALTH PLANS.—Section 1128E of the Social 

25 Security Act (42 U.S.C. 1320a–7e) is amended— 


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1 (1) by striking subsection (a) and inserting the 

2 following: 

3 ‘‘(a) IN GENERAL.—The Secretary shall maintain a 

4 national health care fraud and abuse data collection pro5 gram under this section for the reporting of certain final 

6 adverse actions (not including settlements in which no 

7 findings of liability have been made) against health care 

8 providers, suppliers, or practitioners as required by sub9 section (b), with access as set forth in subsection (d), and 

10 shall furnish the information collected under this section 

11 to the National Practitioner Data Bank established pursu12 ant to the Health Care Quality Improvement Act of 1986 

13 (42 U.S.C. 11101 et seq.).’’; 

14 (2) by striking subsection (d) and inserting the 

15 following: 

16 ‘‘(d) ACCESS TO REPORTED INFORMATION.— 

17 ‘‘(1) AVAILABILITY.—The information collected 

18 under this section shall be available from the Na19 tional Practitioner Data Bank to the agencies, au20 thorities, and officials which are provided under sec21 tion 1921(b) information reported under section 

22 1921(a). 

23 ‘‘(2) FEES FOR DISCLOSURE.—The Secretary 

24 may establish or approve reasonable fees for the dis25 closure of information under this section. The 


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1 amount of such a fee may not exceed the costs of 

2 processing the requests for disclosure and of pro3 viding such information. Such fees shall be available 

4 to the Secretary to cover such costs.’’; 

5 (3) by striking subsection (f) and inserting the 

6 following: 

7 ‘‘(f) APPROPRIATE COORDINATION.—In imple8 menting this section, the Secretary shall provide for the 

9 maximum appropriate coordination with part B of the 

10 Health Care Quality Improvement Act of 1986 (42 U.S.C. 

11 11131 et seq.) and section 1921.’’; and 

12 (4) in subsection (g)— 

13 (A) in paragraph (1)(A)— 

14 (i) in clause (iii)— 

15 (I) by striking ‘‘or State’’ each 

16 place it appears; 

17 (II) by redesignating subclauses 

18 (II) and (III) as subclauses (III) and 

19 (IV), respectively; and 

20 (III) by inserting after subclause 

21 (I) the following new subclause: 

22 ‘‘(II) any dismissal or closure of 

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1 dering their license or leaving the 

2 State or jurisdiction’’; and 

3 (ii) by striking clause (iv) and insert4 ing the following: 

5 ‘‘(iv) Exclusion from participation in a 

6 Federal health care program (as defined in 

7 section 1128B(f)).’’; 

8 (B) in paragraph (3)— 

9 (i) by striking subparagraphs (D) and 

10 (E); and 

11 (ii) by redesignating subparagraph 

12 (F) as subparagraph (D); and 

13 (C) in subparagraph (D) (as so redesig14 nated), by striking ‘‘or State’’. 

15 (b) INFORMATION REPORTED BY STATE LAW OR

16 FRAUD ENFORCEMENT AGENCIES.—Section 1921 of the 

17 Social Security Act (42 U.S.C. 1396r–2) is amended— 

18 (1) in subsection (a)— 

19 (A) in paragraph (1)— 

20 (i) by striking ‘‘SYSTEM.—The State’’ 

21 and all that follows through the semicolon 

22 and inserting SYSTEM.— 

23 ‘‘(A) LICENSING OR CERTIFICATION AC24 TIONS.—The State must have in effect a system 

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1 spect to formal proceedings (as defined by the 

2 Secretary in regulations) concluded against a 

3 health care practitioner or entity by a State li4 censing or certification agency:’’; 

5 (ii) by redesignating subparagraphs 

6 (A) through (D) as clauses (i) through 

7 (iv), respectively, and indenting appro8 priately; 

9 (iii) in subparagraph (A)(iii) (as so 

10 redesignated)— 

11 (I) by striking ‘‘the license of’’ 

12 and inserting ‘‘license or the right to 

13 apply for, or renew, a license by’’; and 

14 (II) by inserting ‘‘nonrenew15 ability,’’ after ‘‘voluntary surrender,’’; 

16 and 

17 (iv) by adding at the end the following 

18 new subparagraph: 

19 ‘‘(B) OTHER FINAL ADVERSE ACTIONS.— 

20 The State must have in effect a system of re21 porting information with respect to any final 

22 adverse action (not including settlements in 

23 which no findings of liability have been made) 

24 taken against a health care provider, supplier, 


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1 or practitioner by a State law or fraud enforce2 ment agency.’’; and 

3 (B) in paragraph (2), by striking ‘‘the au4 thority described in paragraph (1)’’ and insert5 ing ‘‘a State licensing or certification agency or 

6 State law or fraud enforcement agency’’; 

7 (2) in subsection (b)— 

8 (A) by striking paragraph (2) and insert9 ing the following: 

10 ‘‘(2) to State licensing or certification agencies 

11 and Federal agencies responsible for the licensing 

12 and certification of health care providers, suppliers, 

13 and licensed health care practitioners;’’; 

14 (B) in each of paragraphs (4) and (6), by 

15 inserting ‘‘, but only with respect to information 

16 provided pursuant to subsection (a)(1)(A)’’ be17 fore the comma at the end; 

18 (C) by striking paragraph (5) and insert19 ing the following: 

20 ‘‘(5) to State law or fraud enforcement agen21 cies,’’; 

22 (D) by redesignating paragraphs (7) and 

23 (8) as paragraphs (8) and (9), respectively; and 

24 (E) by inserting after paragraph (6) the 

25 following new paragraph: 


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1 ‘‘(7) to health plans (as defined in section 

2 1128C(c));’’; 

3 (3) by redesignating subsection (d) as sub4 section (h), and by inserting after subsection (c) the 

5 following new subsections: 

6 ‘‘(d) DISCLOSURE AND CORRECTION OF INFORMA7 TION.— 

8 ‘‘(1) DISCLOSURE.—With respect to informa9 tion reported pursuant to subsection (a)(1), the Sec10 retary shall— 

11 ‘‘(A) provide for disclosure of the informa12 tion, upon request, to the health care practi13 tioner who, or the entity that, is the subject of 

14 the information reported; and 

15 ‘‘(B) establish procedures for the case 

16 where the health care practitioner or entity dis17 putes the accuracy of the information reported. 

18 ‘‘(2) CORRECTIONS.—Each State licensing or 

19 certification agency and State law or fraud enforce20 ment agency shall report corrections of information 

21 already reported about any formal proceeding or 

22 final adverse action described in subsection (a), in 

23 such form and manner as the Secretary prescribes 

24 by regulation. 


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1 ‘‘(e) FEES FOR DISCLOSURE.—The Secretary may 

2 establish or approve reasonable fees for the disclosure of 

3 information under this section. The amount of such a fee 

4 may not exceed the costs of processing the requests for 

5 disclosure and of providing such information. Such fees 

6 shall be available to the Secretary to cover such costs. 

7 ‘‘(f) PROTECTION FROM LIABILITY FOR REPORT8 ING.—No person or entity, including any agency des9 ignated by the Secretary in subsection (b), shall be held 

10 liable in any civil action with respect to any reporting of 

11 information as required under this section, without knowl12 edge of the falsity of the information contained in the re13 port. 

14 ‘‘(g) REFERENCES.—For purposes of this section: 

15 ‘‘(1) STATE LICENSING OR CERTIFICATION

16 AGENCY.—The term ‘State licensing or certification 

17 agency’ includes any authority of a State (or of a 

18 political subdivision thereof) responsible for the li19 censing of health care practitioners (or any peer re20 view organization or private accreditation entity re21 viewing the services provided by health care practi22 tioners) or entities. 

23 ‘‘(2) STATE LAW OR FRAUD ENFORCEMENT

24 AGENCY.—The term ‘State law or fraud enforcement 

25 agency’ includes— 


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1 ‘‘(A) a State law enforcement agency; and 

2 ‘‘(B) a State medicaid fraud control unit 

3 (as defined in section 1903(q)). 

4 ‘‘(3) FINAL ADVERSE ACTION.— 

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), the term ‘final adverse action’ in7 cludes— 

8 ‘‘(i) civil judgments against a health 

9 care provider, supplier, or practitioner in 

10 State court related to the delivery of a 

11 health care item or service; 

12 ‘‘(ii) State criminal convictions related 

13 to the delivery of a health care item or 

14 service; 

15 ‘‘(iii) exclusion from participation in 

16 State health care programs (as defined in 

17 section 1128(h)); 

18 ‘‘(iv) any licensing or certification ac19 tion described in subsection (a)(1)(A) 

20 taken against a supplier by a State licens21 ing or certification agency; and 

22 ‘‘(v) any other adjudicated actions or 

23 decisions that the Secretary shall establish 

24 by regulation. 


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1 ‘‘(B) EXCEPTION.—Such term does not in2 clude any action with respect to a malpractice 

3 claim.’’; and 

4 (4) in subsection (h), as so redesignated, by 

5 striking ‘‘The Secretary’’ and all that follows 

6 through the period at the end and inserting ‘‘In im7 plementing this section, the Secretary shall provide 

8 for the maximum appropriate coordination with part 

9 B of the Health Care Quality Improvement Act of 

10 1986 (42 U.S.C. 11131 et seq.) and section 

11 1128E.’’. 

12 (c) CONFORMING AMENDMENT.—Section 

13 1128C(a)(1) of the Social Security Act (42 U.S.C. 1320a– 

14 7c(a)(1)) is amended— 

15 (1) in subparagraph (C), by adding ‘‘and’’ after 

16 the comma at the end; 

17 (2) in subparagraph (D), by striking ‘‘, and’’ 

18 and inserting a period; and 

19 (3) by striking subparagraph (E). 

20 (d) TRANSITION PROCESS; EFFECTIVE DATE.— 

21 (1) IN GENERAL.—Effective on the date of en22 actment of this Act, the Secretary of Health and 

23 Human Services (in this section referred to as the 

24 ‘‘Secretary’’) shall implement a transition process 

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1 tion period described in paragraph (5), the Secretary 

2 shall cease operating the Healthcare Integrity and 

3 Protection Data Bank established under section 

4 1128E of the Social Security Act (as in effect before 

5 the effective date specified in paragraph (6)) and 

6 shall transfer all data collected in the Healthcare In7 tegrity and Protection Data Bank to the National 

8 Practitioner Data Bank established pursuant to the 

9 Health Care Quality Improvement Act of 1986 (42 

10 U.S.C. 11101 et seq.). During such transition proc11 ess, the Secretary shall have in effect appropriate 

12 procedures to ensure that data collection and access 

13 to the Healthcare Integrity and Protection Data 

14 Bank and the National Practitioner Data Bank are 

15 not disrupted. 

16 (2) REGULATIONS.—The Secretary shall pro17 mulgate regulations to carry out the amendments 

18 made by subsections (a) and (b). 

19 (3) FUNDING.— 

20 (A) AVAILABILITY OF FEES.—Fees col21 lected pursuant to section 1128E(d)(2) of the 

22 Social Security Act prior to the effective date 

23 specified in paragraph (6) for the disclosure of 

24 information in the Healthcare Integrity and 

25 Protection Data Bank shall be available to the 


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1 Secretary, without fiscal year limitation, for 

2 payment of costs related to the transition proc3 ess described in paragraph (1). Any such fees 

4 remaining after the transition period is com5 plete shall be available to the Secretary, without 

6 fiscal year limitation, for payment of the costs 

7 of operating the National Practitioner Data 

8 Bank. 

9 (B) AVAILABILITY OF ADDITIONAL

10 FUNDS.—In addition to the fees described in 

11 subparagraph (A), any funds available to the 

12 Secretary or to the Inspector General of the 

13 Department of Health and Human Services for 

14 a purpose related to combating health care 

15 fraud, waste, or abuse shall be available to the 

16 extent necessary for operating the Healthcare 

17 Integrity and Protection Data Bank during the 

18 transition period, including systems testing and 

19 other activities necessary to ensure that infor20 mation formerly reported to the Healthcare In21 tegrity and Protection Data Bank will be acces22 sible through the National Practitioner Data 

23 Bank after the end of such transition period. 


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1 (4) SPECIAL PROVISION FOR ACCESS TO THE

2 NATIONAL PRACTITIONER DATA BANK BY THE DE3 PARTMENT OF VETERANS AFFAIRS.— 

4 (A) IN GENERAL.—Notwithstanding any 

5 other provision of law, during the 1-year period 

6 that begins on the effective date specified in 

7 paragraph (6), the information described in 

8 subparagraph (B) shall be available from the 

9 National Practitioner Data Bank to the Sec10 retary of Veterans Affairs without charge. 

11 (B) INFORMATION DESCRIBED.—For pur12 poses of subparagraph (A), the information de13 scribed in this subparagraph is the information 

14 that would, but for the amendments made by 

15 this section, have been available to the Sec16 retary of Veterans Affairs from the Healthcare 

17 Integrity and Protection Data Bank. 

18 (5) TRANSITION PERIOD DEFINED.—For pur19 poses of this subsection, the term ‘‘transition pe20 riod’’ means the period that begins on the date of 

21 enactment of this Act and ends on the later of— 

22 (A) the date that is 1 year after such date 

23 of enactment; or 

24 (B) the effective date of the regulations 

25 promulgated under paragraph (2). 


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1 (6) EFFECTIVE DATE.—The amendments made 

2 by subsections (a), (b), and (c) shall take effect on 

3 the first day after the final day of the transition pe4 riod. 

5 SEC. 5004. MAXIMUM PERIOD FOR SUBMISSION OF MEDI6 CARE CLAIMS REDUCED TO NOT MORE THAN 

7 12 MONTHS. 

8 (a) REDUCING MAXIMUM PERIOD FOR SUBMIS9 SION.— 

10 (1) PART A.—Section 1814(a) of the Social Se11 curity Act (42 U.S.C. 1395f(a)(1)) is amended— 

12 (A) in paragraph (1), by striking ‘‘period 

13 of 3 calendar years’’ and all that follows 

14 through the semicolon and inserting ‘‘period 

15 ending 1 calendar year after the date of serv16 ice;’’; and 

17 (B) by adding at the end the following new 

18 sentence: ‘‘In applying paragraph (1), the Sec19 retary may specify exceptions to the 1 calendar 

20 year period specified in such paragraph.’’ 

21 (2) PART B.— 

22 (A) Section 1842(b)(3) of such Act (42 

23 U.S.C. 1395u(b)(3)(B)) is amended— 

24 (i) in subparagraph (B), in the flush 

25 language following clause (ii), by striking 


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1 ‘‘close of the calendar year following the 

2 year in which such service is furnished 

3 (deeming any service furnished in the last 

4 3 months of any calendar year to have 

5 been furnished in the succeeding calendar 

6 year)’’ and inserting ‘‘period ending 1 cal7 endar year after the date of service’’; and 

8 (ii) by adding at the end the following 

9 new sentence: ‘‘In applying subparagraph 

10 (B), the Secretary may specify exceptions 

11 to the 1 calendar year period specified in 

12 such subparagraph.’’ 

13 (B) Section 1835(a) of such Act (42 

14 U.S.C. 1395n(a)) is amended— 

15 (i) in paragraph (1), by striking ‘‘pe16 riod of 3 calendar years’’ and all that fol17 lows through the semicolon and inserting 

18 ‘‘period ending 1 calendar year after the 

19 date of service;’’; and 

20 (ii) by adding at the end the following 

21 new sentence: ‘‘In applying paragraph (1), 

22 the Secretary may specify exceptions to the 

23 1 calendar year period specified in such 

24 paragraph.’’ 

25 (b) EFFECTIVE DATE.— 


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

2 subsection (a) shall apply to services furnished on or 

3 after January 1, 2010. 

4 (2) SERVICES FURNISHED BEFORE 2010.—In 

5 the case of services furnished before January 1, 

6 2010, a bill or request for payment under section 

7 1814(a)(1), 1842(b)(3)(B), or 1835(a) shall be filed 

8 not later that December 31, 2010. 

9 SEC. 5005. PHYSICIANS WHO ORDER ITEMS OR SERVICES 

10 REQUIRED TO BE MEDICARE ENROLLED PHY11 SICIANS OR ELIGIBLE PROFESSIONALS. 

12 (a) DME.—Section 1834(a)(11)(B) of the Social Se13 curity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

14 striking ‘‘physician’’ and inserting ‘‘physician enrolled 

15 under section 1866(j) or an eligible professional under sec16 tion 1848(k)(3)(B) that is enrolled under section 

17 1866(j)’’. 

18 (b) HOME HEALTH SERVICES.— 

19 (1) PART A.—Section 1814(a)(2) of such Act 

20 (42 U.S.C. 1395(a)(2)) is amended in the matter 

21 preceding subparagraph (A) by inserting ‘‘in the 

22 case of services described in subparagraph (C), a 

23 physician enrolled under section 1866(j) or an eligi24 ble professional under section 1848(k)(3)(B),’’ be25 fore ‘‘or, in the case of services’’. 


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1 (2) PART B.—Section 1835(a)(2) of such Act 

2 (42 U.S.C. 1395n(a)(2)) is amended in the matter 

3 preceding subparagraph (A) by inserting ‘‘, or in the 

4 case of services described in subparagraph (A), a 

5 physician enrolled under section 1866(j) or an eligi6 ble professional under section 1848(k)(3)(B),’’ after 

7 ‘‘a physician’’. 

8 (c) APPLICATION TO OTHER ITEMS OR SERVICES.— 

9 The Secretary may extend the requirement applied by the 

10 amendments made by subsections (a) and (b) to durable 

11 medical equipment and home health services (relating to 

12 requiring certifications and written orders to be made by 

13 enrolled physicians and health professions) to all other 

14 categories of items or services under title XVIII of the 

15 Social Security Act (42 U.S.C. 1395 et seq.), including 

16 covered part D drugs as defined in section 1860D–2(e) 

17 of such Act (42 U.S.C. 1395w–102), that are ordered, pre18 scribed, or referred by a physician enrolled under section 

19 1866(j) of such Act (42 U.S.C. 1395cc(j)) or an eligible 

20 professional under section 1848(k)(3)(B) of such Act (42 

21 U.S.C. 1395w–4(k)(3)(B)). 

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

23 this section shall apply to written orders and certifications 

24 made on or after July 1, 2010. 


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1 SEC. 5006. REQUIREMENT FOR PHYSICIANS TO PROVIDE 

2 DOCUMENTATION ON REFERRALS TO PRO3 GRAMS AT HIGH RISK OF WASTE AND ABUSE. 

4 (a) PHYSICIANS AND OTHER SUPPLIERS.—Section 

5 1842(h) of the Social Security Act (42 U.S.C. 1395u(h)) 

6 is amended by adding at the end the following new para7 graph 

8 ‘‘(9) The Secretary may revoke enrollment, for a pe9 riod of not more than one year for each act, for a physi10 cian or supplier under section 1866(j) if such physician 

11 or supplier fails to maintain and, upon request of the Sec12 retary, provide access to documentation relating to written 

13 orders or requests for payment for durable medical equip14 ment, certifications for home health services, or referrals 

15 for other items or services written or ordered by such phy16 sician or supplier under this title, as specified by the Sec17 retary.’’. 

18 (b) PROVIDERS OF SERVICES.—Section 1866(a)(1) 

19 of such Act (42 U.S.C. 1395cc) is further amended— 

20 (1) in subparagraph (U), by striking at the end 

21 ‘‘and’’; 

22 (2) in subparagraph (V), by striking the period 

23 at the end and adding ‘‘; and’’; and 

24 (3) by adding at the end the following new sub25 paragraph: 


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1 ‘‘(W) maintain and, upon request of the 

2 Secretary, provide access to documentation re3 lating to written orders or requests for payment 

4 for durable medical equipment, certifications for 

5 home health services, or referrals for other 

6 items or services written or ordered by the pro7 vider under this title, as specified by the Sec8 retary.’’. 

9 (c) OIG PERMISSIVE EXCLUSION AUTHORITY.—Sec10 tion 1128(b)(11) of the Social Security Act (42 U.S.C. 

11 1320a–7(b)(11)) is amended by inserting ‘‘, ordering, re12 ferring for furnishing, or certifying the need for’’ after 

13 ‘‘furnishing’’. 

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

15 this section shall apply to orders, certifications, and refer16 rals made on or after January 1, 2010. 

17 SEC. 5007. FACE TO FACE ENCOUNTER WITH PATIENT RE18 QUIRED BEFORE PHYSICIANS MAY CERTIFY 

19 ELIGIBILITY FOR HOME HEALTH SERVICES 

20 OR DURABLE MEDICAL EQUIPMENT UNDER 

21 MEDICARE. 

22 (a) CONDITION OF PAYMENT FOR HOME HEALTH

23 SERVICES.— 

24 (1) PART A.—Section 1814(a)(2)(C) of such 

25 Act is amended— 


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1 (A) by striking ‘‘and such services’’ and in2 serting ‘‘such services’’; and 

3 (B) by inserting after ‘‘care of a physi4 cian’’ the following: ‘‘, and, in the case of a cer5 tification made by a physician after January 1, 

6 2010, prior to making such certification the 

7 physician must document that the physician 

8 himself or herself has had a face-to-face en9 counter (including through use of telehealth, 

10 subject to the requirements in section 1834(m), 

11 and other than with respect to encounters that 

12 are incident to services involved) with the indi13 vidual within a reasonable timeframe as deter14 mined by the Secretary’’. 

15 (2) PART B.—Section 1835(a)(2)(A) of the So16 cial Security Act is amended— 

17 (A) by striking ‘‘and’’ before ‘‘(iii)’’; and 

18 (B) by inserting after ‘‘care of a physi19 cian’’ the following: ‘‘, and (iv) in the case of 

20 a certification after January 1, 2010, prior to 

21 making such certification the physician must 

22 document that the physician has had a face-to23 face encounter (including through use of tele24 health and other than with respect to encoun25 ters that are incident to services involved) with 


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1 the individual during the 6-month period pre2 ceding such certification, or other reasonable 

3 timeframe as determined by the Secretary’’. 

4 (b) CONDITION OF PAYMENT FOR DURABLE MED5 ICAL EQUIPMENT.—Section 1834(a)(11)(B) of the Social 

6 Security Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

7 adding at the end the following: ‘‘and shall require that 

8 such an order be written pursuant to the physician docu9 menting that the physician has had a face-to-face encoun10 ter (including through use of telehealth and other than 

11 with respect to encounters that are incident to services in12 volved) with the individual involved during the 6-month 

13 period preceding such written order, or other reasonable 

14 timeframe as determined by the Secretary’’. 

15 (c) APPLICATION TO OTHER AREAS UNDER MEDI16 CARE.—The Secretary may apply the face-to-face encoun17 ter requirement described in the amendments made by 

18 subsections (a) and (b) to other items and services for 

19 which payment is provided under title XVIII of the Social 

20 Security Act based upon a finding that such an decision 

21 would reduce the risk of waste, fraud, or abuse. 

22 (d) APPLICATION TO MEDICAID.—The requirements 

23 pursuant to the amendments made by subsections (a) and 

24 (b) shall apply in the case of physicians making certifi25 cations for home health services under title XIX of the 


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1 Social Security Act in the same manner and to the same 

2 extent as such requirements apply in the case of physi3 cians making such certifications under title XVIII of such 

4 Act. 

5 SEC. 5008. ENHANCED PENALTIES. 

6 (a) CIVIL MONETARY PENALTIES FOR FALSE STATE7 MENTS OR DELAYING INSPECTIONS.—Section 1128A(a) 

8 of the Social Security Act (42 U.S.C. 1320a–7a(a)), as 

9 amended by section 5002(d)(2)(A), is amended— 

10 (1) by inserting after paragraph (10) the fol11 lowing new paragraphs: 

12 ‘‘(11) knowingly makes, uses, or causes to be 

13 made or used, a false record or statement material 

14 to a false or fraudulent claim for payment for items 

15 and services furnished under a Federal health care 

16 program; or 

17 ‘‘(12) fails to grant timely access, upon reason18 able request (as defined by the Secretary in regula19 tions), to the Inspector General of the Department 

20 of Health and Human Services, for the purpose of 

21 audits, investigations, evaluations, or other statutory 

22 functions of the Inspector General of the Depart23 ment of Health and Human Services;’’; and 

24 (2) in the first sentence (as so amended)— 


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1 (A) by striking ‘‘or in cases under para2 graph (9)’’ and inserting ‘‘in cases under para3 graph (9)’’; and 

4 (B) by striking ‘‘a material fact)’’ and in5 serting ‘‘a material fact, in cases under para6 graph (11), $50,000 for each false record or 

7 statement, or in cases under paragraph (12), 

8 $15,000 for each day of the failure described in 

9 such paragraph)’’. 

10 (b) MEDICARE ADVANTAGE AND PART D PLANS.— 

11 (1) ENSURING TIMELY INSPECTIONS RELATING

12 TO CONTRACTS WITH MA ORGANIZATIONS.—Section 

13 1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) 

14 is amended— 

15 (A) in subparagraph (A), by inserting 

16 ‘‘timely’’ before ‘‘inspect’’; and 

17 (B) in subparagraph (B), by inserting 

18 ‘‘timely’’ before ‘‘audit and inspect’’. 

19 (2) MARKETING VIOLATIONS.—Section 

20 1857(g)(1) of the Social Security Act (42 U.S.C. 

21 1395w—27(g)(1)) is amended— 

22 (A) in subparagraph (F), by striking ‘‘or’’ 

23 at the end; 

24 (B) by inserting after subparagraph (G) 

25 the following new subparagraphs: 


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1 ‘‘(H) except as provided under subpara2 graph (C) or (D) of section 1860D–1(b)(1), en3 rolls an individual in any plan under this part 

4 without the prior consent of the individual or 

5 the designee of the individual; 

6 ‘‘(I) transfers an individual enrolled under 

7 this part from one plan to another without the 

8 prior consent of the individual or the designee 

9 of the individual or solely for the purpose of 

10 earning a commission; 

11 ‘‘(J) fails to comply with marketing re12 strictions described in subsections (h) and (j) of 

13 section 1851 or applicable implementing regula14 tions or guidance; or 

15 ‘‘(K) employs or contracts with any indi16 vidual or entity who engages in the conduct de17 scribed in subparagraphs (A) through (J) of 

18 this paragraph;’’; and 

19 (C) by adding at the end the following new 

20 sentence: ‘‘The Secretary may provide, in addi21 tion to any other remedies authorized by law, 

22 for any of the remedies described in paragraph 

23 (2), if the Secretary determines that any em24 ployee or agent of such organization, or any 

25 provider or supplier who contracts with such orVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01399 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 ganization, has engaged in any conduct de2 scribed in subparagraphs (A) through (K) of 

3 this paragraph.’’. 

4 (3) PROVISION OF FALSE INFORMATION.—Sec5 tion 1857(g)(2)(A) of the Social Security Act (42 

6 U.S.C. 1395w—27(g)(2)(A)) is amended by insert7 ing ‘‘except with respect to a determination under 

8 subparagraph (E), an assessment of not more than 

9 the amount claimed by such plan or plan sponsor 

10 based upon the misrepresentation or falsified infor11 mation involved,’’ after ‘‘for each such determina12 tion,’’. 

13 (c) OBSTRUCTION OF PROGRAM AUDITS.—Section 

14 1128(b)(2) of the Social Security Act (42 U.S.C. 1320a– 

15 7(b)(2)) is amended— 

16 (1) in the heading, by inserting ‘‘OR AUDIT’’ 

17 after ‘‘INVESTIGATION’’; and 

18 (2) by striking ‘‘investigation into’’ and all that 

19 follows through the period and inserting ‘‘investiga20 tion or audit related to—’’ 

21 ‘‘(i) any offense described in para22 graph (1) or in subsection (a); or 

23 ‘‘(ii) the use of funds received, directly 

24 or indirectly, from any Federal health care 


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1 program (as defined in section 

2 1128B(f)).’’. 

3 (d) EFFECTIVE DATE.— 

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section 

6 shall apply to acts committed on or after January 1, 

7 2010. 

8 (2) EXCEPTION.—The amendments made by 

9 subsection (b)(1) take effect on the date of enact10 ment of this Act. 

11 SEC. 5009. MEDICARE SELF-REFERRAL DISCLOSURE PRO12 TOCOL. 

13 (a) DEVELOPMENT OF SELF-REFERRAL DISCLO14 SURE PROTOCOL.— 

15 (1) IN GENERAL.—The Secretary of Health and 

16 Human Services, in cooperation with the Inspector 

17 General of the Department of Health and Human 

18 Services, shall establish, not later than 6 months 

19 after the date of the enactment of this Act, a pro20 tocol to enable health care providers of services and 

21 suppliers to disclose an actual or potential violation 

22 of section 1877 of the Social Security Act (42 

23 U.S.C. 1395nn) pursuant to a self-referral disclosure 

24 protocol (in this section referred to as an ‘‘SRDP’’). 


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1 The SRDP shall include direction to health care pro2 viders of services and suppliers on— 

3 (A) a specific person, official, or office to 

4 whom such disclosures shall be made; and 

5 (B) instruction on the implication of the 

6 SRDP on corporate integrity agreements and 

7 corporate compliance agreements. 

8 (2) PUBLICATION ON INTERNET WEBSITE OF

9 SRDP INFORMATION.—The Secretary of Health and 

10 Human Services shall post information on the public 

11 Internet website of the Centers for Medicare & Med12 icaid Services to inform relevant stakeholders of how 

13 to disclose actual or potential violations pursuant to 

14 an SRDP. 

15 (3) RELATION TO ADVISORY OPINIONS.—The 

16 SRDP shall be separate from the advisory opinion 

17 process set forth in regulations implementing section 

18 1877(g) of the Social Security Act. 

19 (b) REDUCTION IN AMOUNTS OWED.—The Secretary 

20 of Health and Human Services is authorized to reduce the 

21 amount due and owing for all violations under section 

22 1877 of the Social Security Act to an amount less than 

23 that specified in subsection (g) of such section. In estab24 lishing such amount for a violation, the Secretary may 

25 consider the following factors: 


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1 (1) The nature and extent of the improper or 

2 illegal practice. 

3 (2) The timeliness of such self-disclosure. 

4 (3) The cooperation in providing additional in5 formation related to the disclosure. 

6 (4) Such other factors as the Secretary con7 siders appropriate. 

8 (c) REPORT.—Not later than 18 months after the 

9 date on which the SRDP protocol is established under sub10 section (a)(1), the Secretary shall submit to Congress a 

11 report on the implementation of this section. Such report 

12 shall include— 

13 (1) the number of health care providers of serv14 ices and suppliers making disclosures pursuant to 

15 the SRDP; 

16 (2) the amounts collected pursuant to the 

17 SRDP; 

18 (3) the types of violations reported under the 

19 SRDP; and 

20 (4) such other information as may be necessary 

21 to evaluate the impact of this section. 


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1 SEC. 5010. ADJUSTMENTS TO THE MEDICARE DURABLE 

2 MEDICAL EQUIPMENT, PROSTHETICS, 

3 ORTHOTICS, AND SUPPLIES COMPETITIVE 

4 ACQUISITION PROGRAM. 

5 (a) EXPANSION OF ROUND 2 OF THE DME COM6 PETITIVE BIDDING PROGRAM.—Section 1847(a)(1) of the 

7 Social Security Act (42 U.S.C. 1395w–3(a)(1)) is amend8 ed— 

9 (1) in subparagraph (B)(i)(II), by striking ‘‘70’’ 

10 and inserting ‘‘91’’; and 

11 (2) in subparagraph (D)(ii)— 

12 (A) in subclause (I), by striking ‘‘and’’ at 

13 the end; 

14 (B) by redesignating subclause (II) as sub15 clause (III); and 

16 (C) by inserting after subclause (I) the fol17 lowing new subclause: 

18 ‘‘(II) the Secretary shall include 

19 the next 21 largest metropolitan sta20 tistical areas by total population 

21 (after those selected under subclause 

22 (I)) for such round; and’’. 

23 (b) REQUIREMENT TO EITHER COMPETITIVELY BID

24 AREAS OR USE COMPETITIVE BID PRICES BY 2016.— 

25 Section 1834(a)(1)(F) of the Social Security Act (42 

26 U.S.C. 1395m(a)(1)(F)) is amended— 


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1 (1) in clause (i), by striking ‘‘and’’ at the end; 

2 (2) in clause (ii)— 

3 (A) by inserting ‘‘(and, in the case of cov4 ered items furnished on or after January 1, 

5 2016, subject to clause (iii), shall)’’ after 

6 ‘‘may’’; and 

7 (B) by striking the period at the end and 

8 inserting ‘‘; and’’; and 

9 (3) by adding at the end the following new 

10 clause: 

11 ‘‘(iii) in the case of covered items fur12 nished on or after January 1, 2016, the 

13 Secretary may continue to make such ad14 justments described in clause (ii) as, under 

15 such competitive acquisition programs, ad16 ditional covered items are phased in or in17 formation is updated as contracts under 

18 section 1847 are recompeted in accordance 

19 with section 1847(b)(3)(B).’’. 

20 SEC. 5011. EXPANSION OF THE RECOVERY AUDIT CON21 TRACTOR (RAC) PROGRAM. 

22 (a) EXPANSION TO MEDICAID.— 

23 (1) STATE PLAN AMENDMENT.—Section 

24 1902(a)(42) of the Social Security Act (42 U.S.C. 

25 1396a(a)(42)) is amended— 


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1 (A) by striking ‘‘that the records’’ and in2 serting ‘‘that— 

3 ‘‘(A) the records’’; 

4 (B) by inserting ‘‘and’’ after the semicolon; 

5 and 

6 (C) by adding at the end the following: 

7 ‘‘(B) not later than December 31, 2010, 

8 the State shall— 

9 ‘‘(i) establish a program under which 

10 the State contracts (consistent with State 

11 law and in the same manner as the Sec12 retary enters into contracts with recovery 

13 audit contractors under section 1893(h), 

14 subject to such exceptions or requirements 

15 as the Secretary may require for purposes 

16 of this title or a particular State) with 1 

17 or more recovery audit contractors for the 

18 purpose of identifying underpayments and 

19 overpayments and recouping overpayments 

20 under the State plan and under any waiver 

21 of the State plan with respect to all serv22 ices for which payment is made to any en23 tity under such plan or waiver; and 

24 ‘‘(ii) provide assurances satisfactory 

25 to the Secretary that— 


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1 ‘‘(I) under such contracts, pay2 ment shall be made to such a con3 tractor only from amounts recovered; 

4 ‘‘(II) from such amounts recov5 ered, payment— 

6 ‘‘(aa) shall be made on a 

7 contingent basis for collecting 

8 overpayments; and 

9 ‘‘(bb) may be made in such 

10 amounts as the State may specify 

11 for identifying underpayments; 

12 ‘‘(III) the State has an adequate 

13 process for entities to appeal any ad14 verse determination made by such 

15 contractors; and 

16 ‘‘(IV) such program is carried 

17 out in accordance with such require18 ments as the Secretary shall specify, 

19 including— 

20 ‘‘(aa) for purposes of section 

21 1903(a)(7), that amounts ex22 pended by the State to carry out 

23 the program shall be considered 

24 amounts expended as necessary 

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1 ministration of the State plan or 

2 a waiver of the plan; 

3 ‘‘(bb) that section 1903(d) 

4 shall apply to amounts recovered 

5 under the program; and 

6 ‘‘(cc) that the State and any 

7 such contractors under contract 

8 with the State shall coordinate 

9 such recovery audit efforts with 

10 other contractors or entities per11 forming audits of entities receiv12 ing payments under the State 

13 plan or waiver in the State, in14 cluding efforts with Federal and 

15 State law enforcement with re16 spect to the Department of Jus17 tice, including the Federal Bu18 reau of Investigations, the In19 spector General of the Depart20 ment of Health and Human 

21 Services, and the State medicaid 

22 fraud control unit; and’’. 

23 (2) COORDINATION; REGULATIONS.— 

24 (A) IN GENERAL.—The Secretary of 

25 Health and Human Services, acting through the 


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1 Administrator of the Centers for Medicare & 

2 Medicaid Services, shall coordinate the expan3 sion of the Recovery Audit Contractor program 

4 to Medicaid with States, particularly with re5 spect to each State that enters into a contract 

6 with a recovery audit contractor for purposes of 

7 the State’s Medicaid program prior to Decem8 ber 31, 2010. 

9 (B) REGULATIONS.—The Secretary of 

10 Health and Human Services shall promulgate 

11 regulations to carry out this subsection and the 

12 amendments made by this subsection, including 

13 with respect to conditions of Federal financial 

14 participation, as specified by the Secretary. 

15 (b) EXPANSION TO MEDICARE PARTS C AND D.— 

16 Section 1893(h) of the Social Security Act (42 U.S.C. 

17 1395ddd(h)) is amended— 

18 (1) in paragraph (1), in the matter preceding 

19 subparagraph (A), by striking ‘‘part A or B’’ and in20 serting ‘‘this title’’; 

21 (2) in paragraph (2), by striking ‘‘parts A and 

22 B’’ and inserting ‘‘this title’’; 

23 (3) in paragraph (3), by inserting ‘‘(not later 

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1 lating to payments made under part C or D)’’ after 

2 ‘‘2010’’; 

3 (4) in paragraph (4), in the matter preceding 

4 subparagraph (A), by striking ‘‘part A or B’’ and in5 serting ‘‘this title’’; and 

6 (5) by adding at the end the following: 

7 ‘‘(9) SPECIAL RULES RELATING TO PARTS C

8 AND D.—The Secretary shall enter into contracts 

9 under paragraph (1) to require recovery audit con10 tractors to— 

11 ‘‘(A) ensure that each MA plan under part 

12 C has an anti- fraud plan in effect and to re13 view the effectiveness of each such anti-fraud 

14 plan; 

15 ‘‘(B) ensure that each prescription drug 

16 plan under part D has an anti- fraud plan in 

17 effect and to review the effectiveness of each 

18 such anti-fraud plan; 

19 ‘‘(C) examine claims for reinsurance pay20 ments under section 1860D–15(b) to determine 

21 whether prescription drug plans submitting 

22 such claims incurred costs in excess of the al23 lowable reinsurance costs permitted under para24 graph (2) of that section; and 


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1 ‘‘(D) review estimates submitted by pre2 scription drug plans by private plans with re3 spect to the enrollment of high cost bene4 ficiaries (as defined by the Secretary) and to 

5 compare such estimates with the numbers of 

6 such beneficiaries actually enrolled by such 

7 plans.’’. 

8 (c) ANNUAL REPORT.—The Secretary of Health and 

9 Human Services, acting through the Administrator of the 

10 Centers for Medicare & Medicaid Services, shall submit 

11 an annual report to Congress concerning the effectiveness 

12 of the Recovery Audit Contractor program under Medicaid 

13 and Medicare and shall include such reports recommenda14 tions for expanding or improving the program. 

15 Subtitle B—Additional Medicaid 

16 Provisions 

17 SEC. 5101. TERMINATION OF PROVIDER PARTICIPATION 

18 UNDER MEDICAID IF TERMINATED UNDER 

19 MEDICARE OR OTHER STATE PLAN. 

20 Section 1902(a)(39) of the Social Security Act (42 

21 U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting after 

22 ‘‘1128A,’’ the following: ‘‘terminate the participation of 

23 any individual or entity in such program if (subject to 

24 such exceptions as are permitted with respect to exclusion 

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1 pation of such individual or entity is terminated under title 

2 XVIII or any other State plan under this title,’’. 

3 SEC. 5102. MEDICAID EXCLUSION FROM PARTICIPATION 

4 RELATING TO CERTAIN OWNERSHIP, CON5 TROL, AND MANAGEMENT AFFILIATIONS. 

6 Section 1902(a) of the Social Security Act (42 U.S.C. 

7 1396a(a)), as amended by section 5001(b), is amended by 

8 inserting after paragraph (75) the following: 

9 ‘‘(76) provide that the State agency described 

10 in paragraph (9) exclude, with respect to a period, 

11 any individual or entity from participation in the 

12 program under the State plan if such individual or 

13 entity owns, controls, or manages an entity that (or 

14 if such entity is owned, controlled, or managed by an 

15 individual or entity that)— 

16 ‘‘(A) has unpaid overpayments (as defined 

17 by the Secretary) under this title during such 

18 period determined by the Secretary or the State 

19 agency to be delinquent; 

20 ‘‘(B) is suspended or excluded from par21 ticipation under or whose participation is termi22 nated under this title during such period; or 

23 ‘‘(C) is affiliated with an individual or enti24 ty that has been suspended or excluded from 

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1 tion is terminated under this title during such 

2 period;’’. 

3 SEC. 5103. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 

4 ALTERNATE PAYEES REQUIRED TO REG5 ISTER UNDER MEDICAID. 

6 (a) IN GENERAL.—Section 1902(a) of the Social Se7 curity Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended 

8 by section 5102(a), is amended by inserting after para9 graph (76), the following: 

10 ‘‘(77) provide that any agent, clearinghouse, or 

11 other alternate payee (as defined by the Secretary) 

12 that submits claims on behalf of a health care pro13 vider must register with the State and the Secretary 

14 in a form and manner specified by the Secretary; 

15 and’’. 

16 SEC. 5104. REQUIREMENT TO REPORT EXPANDED SET OF 

17 DATA ELEMENTS UNDER MMIS TO DETECT 

18 FRAUD AND ABUSE. 

19 (a) IN GENERAL.—Section 1903(r)(1)(F) of the So20 cial Security Act (42 U.S.C. 1396b(r)(1)(F)) is amended 

21 by inserting after ‘‘necessary’’ the following: ‘‘and includ22 ing, for data submitted to the Secretary on or after Janu23 ary 1, 2010, data elements from the automated data sys24 tem that the Secretary determines to be necessary for proVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01413 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 gram integrity, program oversight, and administration, at 

2 such frequency as the Secretary shall determine’’. 

3 (b) MANAGED CARE ORGANIZATIONS.— 

4 (1) IN GENERAL.—Section 1903(m)(2)(A)(xi) 

5 of the Social Security Act (42 U.S.C. 

6 1396b(m)(2)(A)(xi)) is amended by inserting ‘‘and 

7 for the provision of such data to the State at a fre8 quency and level of detail to be specified by the Sec9 retary’’ after ‘‘patients’’. 

10 (2) EFFECTIVE DATE.—The amendment made 

11 by paragraph (1) shall apply with respect to contract 

12 years beginning on or after January 1, 2010. 

13 SEC. 5105. PROHIBITION ON PAYMENTS TO INSTITUTIONS 

14 OR ENTITIES LOCATED OUTSIDE OF THE 

15 UNITED STATES. 

16 Section 1902(a) of the Social Security Act (42 U.S.C. 

17 1396b(a)), as amended by section 5103, is amended by 

18 inserting after paragraph (77) the following new para19 graph: 

20 ‘‘(78) provide that the State shall not provide 

21 any payments for items or services provided under 

22 the State plan or under a waiver to any financial in23 stitution or entity located outside of the United 

24 States.’’. 


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1 SEC. 5106. OVERPAYMENTS. 

2 (a) EXTENSION OF PERIOD FOR COLLECTION OF

3 OVERPAYMENTS DUE TO FRAUD.— 

4 (1) IN GENERAL.—Section 1903(d)(2) of the 

5 Social Security Act (42 U.S.C. 1396b(d)(2)) is 

6 amended— 

7 (A) in subparagraph (C)— 

8 (i) in the first sentence, by striking 

9 ‘‘60 days’’ and inserting ‘‘1 year’’; and 

10 (ii) in the second sentence, by striking 

11 ‘‘60 days’’ and inserting ‘‘1-year period’’; 

12 and 

13 (B) in subparagraph (D)— 

14 (i) in inserting ‘‘(i)’’ after ‘‘(D)’’; and 

15 (ii) by adding at the end the fol16 lowing: 

17 ‘‘(ii) In any case where the State is unable to recover 

18 a debt which represents an overpayment (or any portion 

19 thereof) made to a person or other entity due to fraud 

20 within 1 year of discovery because there is not a final de21 termination of the amount of the overpayment under an 

22 administrative or judicial process (as applicable), includ23 ing as a result of a judgment being under appeal, no ad24 justment shall be made in the Federal payment to such 

25 State on account of such overpayment (or portion thereof) 

26 before the date that is 30 days after the date on which 


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1 a final judgment (including, if applicable, a final deter2 mination on an appeal) is made.’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by this subsection take effect on the date of enact5 ment of this Act and apply to overpayments discov6 ered on or after that date. 

7 (b) CORRECTIVE ACTION.—The Secretary shall pro8 mulgate regulations that require States to correct Feder9 ally identified claims overpayments, of an ongoing or re10 curring nature, with new Medicaid Management Informa11 tion System (MMIS) edits, audits, or other appropriate 

12 corrective action. 

13 SEC. 5107. MANDATORY STATE USE OF NATIONAL CORRECT 

14 CODING INITIATIVE. 

15 Section 1903(r) of the Social Security Act (42 U.S.C. 

16 1396b(r)) is amended— 

17 (1) in paragraph (1)(B)— 

18 (A) in clause (ii), by striking ‘‘and’’ at the 

19 end; 

20 (B) in clause (iii), by adding ‘‘and’’ after 

21 the semi-colon; and 

22 (C) by adding at the end the following new 

23 clause: 

24 ‘‘(iv) effective for claims filed on or 

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1 ible methodologies of the National Correct 

2 Coding Initiative administered by the Sec3 retary (or any successor initiative to pro4 mote correct coding and to control im5 proper coding leading to inappropriate pay6 ment) and such other methodologies of 

7 that Initiative (or such other national cor8 rect coding methodologies) as the Sec9 retary identifies in accordance with para10 graph (4);’’; and 

11 (2) by adding at the end the following new 

12 paragraph: 

13 ‘‘(4) For purposes of paragraph (1)(B)(iv), the Sec14 retary shall do the following: 

15 ‘‘(A) Not later than September 1, 2010: 

16 ‘‘(i) Identify those methodologies of the 

17 National Correct Coding Initiative administered 

18 by the Secretary (or any successor initiative to 

19 promote correct coding and to control improper 

20 coding leading to inappropriate payment) which 

21 are compatible to claims filed under this title. 

22 ‘‘(ii) Identify those methodologies of such 

23 Initiative (or such other national correct coding 

24 methodologies) that should be incorporated into 

25 claims filed under this title with respect to 


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1 items or services for which States provide med2 ical assistance under this title and no national 

3 correct coding methodologies have been estab4 lished under such Initiative with respect to title 

5 XVIII. 

6 ‘‘(iii) Notify States of— 

7 ‘‘(I) the methodologies identified 

8 under subparagraphs (A) and (B) (and of 

9 any other national correct coding meth10 odologies identified under subparagraph 

11 (B)); and 

12 ‘‘(II) how States are to incorporate 

13 such methodologies into claims filed under 

14 this title. 

15 ‘‘(B) Not later than March 1, 2011, submit a 

16 report to Congress that includes the notice to States 

17 under clause (iii) of subparagraph (A) and an anal18 ysis supporting the identification of the methodolo19 gies made under clauses (i) and (ii) of subparagraph 

20 (A).’’. 

21 SEC. 5108. GENERAL EFFECTIVE DATE. 

22 (a) IN GENERAL.—Except as otherwise provided in 

23 this subtitle, this subtitle and the amendments made by 

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1 gard to whether final regulations to carry out such amend2 ments and subtitle have been promulgated by that date. 

3 (b) DELAY IF STATE LEGISLATION REQUIRED.—In 

4 the case of a State plan for medical assistance under title 

5 XIX of the Social Security Act or a child health plan 

6 under title XXI of such Act which the Secretary of Health 

7 and Human Services determines requires State legislation 

8 (other than legislation appropriating funds) in order for 

9 the plan to meet the additional requirement imposed by 

10 the amendments made by this subtitle, the State plan or 

11 child health plan shall not be regarded as failing to comply 

12 with the requirements of such title solely on the basis of 

13 its failure to meet this additional requirement before the 

14 first day of the first calendar quarter beginning after the 

15 close of the first regular session of the State legislature 

16 that begins after the date of the enactment of this Act. 

17 For purposes of the previous sentence, in the case of a 

18 State that has a 2-year legislative session, each year of 

19 such session shall be deemed to be a separate regular ses20 sion of the State legislature. 


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1 TITLE VI—REVENUE 

2 PROVISIONS 

3 Subtitle A—Revenue Offset 

4 Provisions 

5 SEC. 6001. EXCISE TAX ON HIGH COST EMPLOYER-SPON6 SORED HEALTH COVERAGE. 

7 (a) IN GENERAL.—Chapter 43 of the Internal Rev8 enue Code of 1986, as amended by section 1306, is 

9 amended by adding at the end the following: 

10 ‘‘SEC. 4980I. EXCISE TAX ON HIGH COST EMPLOYER-SPON11 SORED HEALTH COVERAGE. 

12 ‘‘(a) IMPOSITION OF TAX.—If— 

13 ‘‘(1) an employee is covered under any applica14 ble employer-sponsored coverage of an employer at 

15 any time during a taxable period, and 

16 ‘‘(2) there is any excess benefit with respect to 

17 the coverage, 

18 there is hereby imposed a tax equal to 40 percent of the 

19 excess benefit. 

20 ‘‘(b) EXCESS BENEFIT.—For purposes of this sec21 tion— 

22 ‘‘(1) IN GENERAL.—The term ‘excess benefit’ 

23 means, with respect to any applicable employer-spon24 sored coverage made available by an employer to an 

25 employee during any taxable period, the sum of the 


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1 excess amounts determined under paragraph (2) for 

2 months during the taxable period. 

3 ‘‘(2) MONTHLY EXCESS AMOUNT.—The excess 

4 amount determined under this paragraph for any 

5 month is the excess (if any) of— 

6 ‘‘(A) the aggregate cost of the applicable 

7 employer-sponsored coverage of the employee 

8 for the month, over 

‘‘(B) an amount equal to 1 9 ⁄12 of the annual 

10 limitation under paragraph (3) for the calendar 

11 year in which the month occurs. 

12 ‘‘(3) ANNUAL LIMITATION.—For purposes of 

13 this subsection— 

14 ‘‘(A) IN GENERAL.—The annual limitation 

15 under this paragraph for any calendar year is 

16 the dollar limit determined under subparagraph 

17 (C) for the calendar year. 

18 ‘‘(B) APPLICABLE ANNUAL LIMITATION.— 

19 The annual limitation which applies for any 

20 month shall be determined on the basis of the 

21 type of coverage (as determined under sub22 section (f)(1)) provided to the employee by the 

23 employer as of the beginning of the month. 

24 ‘‘(C) APPLICABLE DOLLAR LIMIT.—Except 

25 as provided in subparagraph (D)— 


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1 ‘‘(i) 2013.—In the case of 2013, the 

2 dollar limit under this subparagraph is— 

3 ‘‘(I) in the case of an employee 

4 with self-only coverage, $8,000, and 

5 ‘‘(II) in the case of an employee 

6 with coverage other than self-only cov7 erage, $21,000. 

8 ‘‘(ii) EXCEPTION FOR CERTAIN RE9 TIRED EMPLOYEES AND EMPLOYEES EN10 GAGED IN HIGH-RISK PROFESSIONS.—In 

11 the case of an individual receiving retiree 

12 coverage who has attained age 55, and an 

13 employee (other than such an individual) 

14 who participates in a plan which covers 

15 employees engaged in a high-risk profes16 sion— 

17 ‘‘(I) the dollar amount in clause 

18 (i)(I) (determined after the applica19 tion of subparagraph (D)) shall be in20 creased by $1,850, and 

21 ‘‘(II) the dollar amount in clause 

22 (i)(II) (determined after the applica23 tion of such subparagraph) shall be 

24 increased by $5,000. 


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1 ‘‘(iii) SUBSEQUENT YEARS.—In the 

2 case of any calendar year after 2013, the 

3 dollar limit under this subparagraph is an 

4 amount equal to the sum of the applicable 

5 dollar amount in effect for the calendar 

6 year preceding such year under clause (i) 

7 and the dollar amount of any increase 

8 under clause (ii) as in effect for the cal9 endar year preceding such year, except 

10 that each such amount shall be increased 

11 by an amount equal to the product of— 

12 ‘‘(I) such amount, multiplied by 

13 ‘‘(II) the cost-of-living adjust14 ment determined under section 1(f)(3) 

15 for such year (determined by 

16 substitituting the calendar year that 

17 is 2 years before such year for ‘1992’ 

18 in subparagraph (B) thereof), in19 creased by 1 percentage point. 

20 If the amount determined under this 

21 clause is not a multiple of $50, such 

22 amount shall be rounded to the nearest 

23 multiple of $50. 

24 ‘‘(D) TRANSITION RULE FOR STATES WITH

25 HIGHEST COVERAGE COSTS.— 


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1 ‘‘(i) IN GENERAL.—If an employee is 

2 a resident of a high cost State on the first 

3 day of any month beginning in 2013, 

4 2014, or 2015, the annual limitation under 

5 this paragraph for such month with re6 spect to such employee shall be an amount 

7 equal to the applicable percentage of the 

8 annual limitation (determined without re9 gard to this subparagraph or subparagraph 

10 (C)(ii)). 

11 ‘‘(ii) APPLICABLE PERCENTAGE.—The 

12 applicable percentage is 120 percent for 

13 2013, 110 percent for 2014, and 105 per14 cent for 2015. 

15 ‘‘(iii) HIGH COST STATE.—The term 

16 ‘high cost State’ means each of the 17 

17 States which the Secretary of Health and 

18 Human Services, in consultation with the 

19 Secretary, estimates had the highest aver20 age cost during 2012 for employer-spon21 sored coverage under health plans. The 

22 Secretary’s estimate shall be made on the 

23 basis of aggregate premiums paid in the 

24 State for such health plans, determined 


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1 using the most recent data available as of 

2 August 31, 2012. 

3 ‘‘(c) LIABILITY TO PAY TAX.— 

4 ‘‘(1) IN GENERAL.—Each coverage provider 

5 shall pay the tax imposed by subsection (a) on its 

6 applicable share of the excess benefit with respect to 

7 an employee for any taxable period. 

8 ‘‘(2) COVERAGE PROVIDER.—For purposes of 

9 this subsection, the term ‘coverage provider’ means 

10 each of the following: 

11 ‘‘(A) HEALTH INSURANCE COVERAGE.—If 

12 the applicable employer-sponsored coverage con13 sists of coverage under a group health plan 

14 which provides health insurance coverage, the 

15 health insurance issuer. 

16 ‘‘(B) HSA CONTRIBUTIONS.—If the appli17 cable employer-sponsored coverage consists of 

18 coverage under an arrangement under which 

19 the employer makes contributions described in 

20 subsection (b) or (d) of section 106, the em21 ployer. 

22 ‘‘(C) OTHER COVERAGE.—In the case of 

23 any other applicable employer-sponsored cov24 erage, the person that administers the plan ben25 efits. 


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1 ‘‘(3) APPLICABLE SHARE.—For purposes of 

2 this subsection, a coverage provider’s applicable 

3 share of an excess benefit for any taxable period is 

4 the amount which bears the same ratio to the 

5 amount of such excess benefit as— 

6 ‘‘(A) the cost of the applicable employer7 sponsored coverage provided by the provider to 

8 the employee during such period, bears to 

9 ‘‘(B) the aggregate cost of all applicable 

10 employer-sponsored coverage provided to the 

11 employee by all coverage providers during such 

12 period. 

13 ‘‘(4) RESPONSIBILITY TO CALCULATE TAX AND

14 APPLICABLE SHARES.— 

15 ‘‘(A) IN GENERAL.—Each employer shall— 

16 ‘‘(i) calculate for each taxable period 

17 the amount of the excess benefit subject to 

18 the tax imposed by subsection (a) and the 

19 applicable share of such excess benefit for 

20 each coverage provider, and 

21 ‘‘(ii) notify, at such time and in such 

22 manner as the Secretary may prescribe, 

23 the Secretary and each coverage provider 

24 of the amount so determined for the pro25 vider. 


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1 ‘‘(B) SPECIAL RULE FOR MULTIEMPLOYER

2 PLANS.—In the case of applicable employer3 sponsored coverage made available to employees 

4 through a multiemployer plan (as defined in 

5 section 414(f)), the plan sponsor shall make the 

6 calculations, and provide the notice, required 

7 under subparagraph (A). 

8 ‘‘(d) APPLICABLE EMPLOYER-SPONSORED COV9 ERAGE; COST.—For purposes of this section— 

10 ‘‘(1) APPLICABLE EMPLOYER-SPONSORED COV11 ERAGE.— 

12 ‘‘(A) IN GENERAL.—The term ‘applicable 

13 employer-sponsored coverage’ means, with re14 spect to any employee, coverage under any 

15 group health plan made available to the em16 ployee by an employer which is excludable from 

17 the employee’s gross income under section 106, 

18 or would be so excludable if it were employer19 provided coverage (within the meaning of such 

20 section 106). 

21 ‘‘(B) EXCEPTIONS.—The term ‘applicable 

22 employer-sponsored coverage’ shall not in23 clude— 


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1 ‘‘(i) any coverage (whether through 

2 insurance or otherwise) for disability or 

3 long-term care, or 

4 ‘‘(ii) any coverage described in section 

5 9832(c)(3) the payment for which is not 

6 excludable from gross income and for 

7 which a deduction under section 162(l) is 

8 not allowable. 

9 ‘‘(C) COVERAGE INCLUDES EMPLOYEE

10 PAID PORTION.—Coverage shall be treated as 

11 applicable employer-sponsored coverage without 

12 regard to whether the employer or employee 

13 pays for the coverage. 

14 ‘‘(D) SELF-EMPLOYED INDIVIDUAL.—In 

15 the case of an individual who is an employee 

16 within the meaning of section 401(c)(1), cov17 erage under any group health plan providing 

18 health insurance coverage shall be treated as 

19 applicable employer-sponsored coverage if a de20 duction is allowable under section 162(l) with 

21 respect to all or any portion the cost of the cov22 erage. 

23 ‘‘(E) GOVERNMENTAL PLANS INCLUDED.— 

24 Applicable employer-sponsored coverage shall 

25 include coverage under any group health plan 


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1 established and maintained for its civilian em2 ployees by the Government of the United 

3 States, by the government of any State or polit4 ical subdivision thereof, or by any agency or in5 strumentality of any such government. 

6 ‘‘(2) DETERMINATION OF COST.— 

7 ‘‘(A) IN GENERAL.—The cost of applicable 

8 employer-sponsored coverage shall be deter9 mined under rules similar to the rules of section 

10 4980B(f)(4), except that in determining such 

11 cost, any portion of the cost of such coverage 

12 which is attributable to the tax imposed under 

13 this section shall not be taken into account. In 

14 the case of such coverage which provides cov15 erage to retired employees, the employer may 

16 elect to treat a retired employee who has not at17 tained the age of 65 and a retired employee 

18 who has attained the age of 65 as similarly sit19 uated beneficiaries. 

20 ‘‘(B) HEALTH FSAS.—In the case of appli21 cable employer-sponsored coverage consisting of 

22 coverage under a flexible spending arrangement 

23 (as defined in section 106(c)(2)), the cost of the 

24 coverage shall be equal to the sum of— 


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1 ‘‘(i) the amount of employer contribu2 tions under any salary reduction election 

3 under the arrangement, plus 

4 ‘‘(ii) the amount determined under 

5 subparagraph (A) with respect to any re6 imbursement under the arrangement in ex7 cess of the contributions described in 

8 clause (i). 

9 ‘‘(C) HSAS.—In the case of applicable em10 ployer-sponsored coverage consisting of cov11 erage under an arrangement under which the 

12 employer makes contributions described in sub13 section (b) or (d) of section 106, the cost of the 

14 coverage shall be equal to the amount of em15 ployer contributions under the arrangement. 

16 ‘‘(D) ALLOCATION ON A MONTHLY

17 BASIS.—If cost is determined on other than a 

18 monthly basis, the cost shall be allocated to 

19 months in a taxable period on such basis as the 

20 Secretary may prescribe. 

21 ‘‘(e) PENALTY FOR FAILURE TO PROPERLY CAL22 CULATE EXCESS BENEFIT.— 

23 ‘‘(1) IN GENERAL.—If, for any taxable period, 

24 the tax imposed by subsection (a) exceeds the tax 

25 determined under such subsection with respect to 


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1 the total excess benefit calculated by the employer or 

2 plan sponsor under subsection (c)(4)— 

3 ‘‘(A) each coverage provider shall pay the 

4 tax on its applicable share (determined in the 

5 same manner as under subsection (c)(4)) of the 

6 excess, but no penalty shall be imposed on the 

7 provider with respect to such amount, and 

8 ‘‘(B) the employer or plan sponsor shall, in 

9 addition to any tax imposed by subsection (a), 

10 pay a penalty in an amount equal to such ex11 cess, plus interest at the underpayment rate de12 termined under section 6621 for the period be13 ginning on the due date for the payment of tax 

14 imposed by subsection (a) to which the excess 

15 relates and ending on the date of payment of 

16 the penalty. 

17 ‘‘(2) LIMITATIONS ON PENALTY.— 

18 ‘‘(A) PENALTY NOT TO APPLY WHERE

19 FAILURE NOT DISCOVERED EXERCISING REA20 SONABLE DILIGENCE.—No penalty shall be im21 posed by paragraph (1)(B) on any failure to 

22 properly calculate the excess benefit during any 

23 period for which it is established to the satisfac24 tion of the Secretary that the employer or plan 

25 sponsor neither knew, nor exercising reasonable 


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1 diligence would have known, that such failure 

2 existed. 

3 ‘‘(B) PENALTY NOT TO APPLY TO FAIL4 URES CORRECTED WITHIN 30 DAYS.—No pen5 alty shall be imposed by paragraph (1)(B) on 

6 any such failure if— 

7 ‘‘(i) such failure was due to reason8 able cause and not to willful neglect, and 

9 ‘‘(ii) such failure is corrected during 

10 the 30-day period beginning on the 1st 

11 date that the employer knew, or exercising 

12 reasonable diligence would have known, 

13 that such failure existed. 

14 ‘‘(C) WAIVER BY SECRETARY.—In the case 

15 of any such failure which is due to reasonable 

16 cause and not to willful neglect, the Secretary 

17 may waive part or all of the penalty imposed by 

18 paragraph (1), to the extent that the payment 

19 of such penalty would be excessive or otherwise 

20 inequitable relative to the failure involved. 

21 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.— 

22 For purposes of this section— 

23 ‘‘(1) COVERAGE DETERMINATIONS.— 

24 ‘‘(A) IN GENERAL.—Except as provided in 

25 subparagraph (B), an employee shall be treated 


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1 as having self-only coverage with respect any 

2 applicable employer-sponsored coverage of an 

3 employer. 

4 ‘‘(B) COVERAGE UNDER ESSENTIAL BENE5 FITS PACKAGE.—An employee shall be treated 

6 as having coverage other than self-only coverage 

7 only if the employee is enrolled in coverage 

8 other than self-only coverage in a group health 

9 plan which provides at least an essential bene10 fits package (as defined in section 2242 of the 

11 Social Security Act). 

12 ‘‘(2) EMPLOYEES ENGAGED IN HIGH-RISK PRO13 FESSION.—The term ‘employees engaged in a high14 risk profession’ means law enforcement officers, fire15 fighters, members of a rescue squad or ambulance 

16 crew, and individuals engaged in the construction, 

17 mining, agriculture (not including food processing), 

18 forestry, and fishing industries. 

19 ‘‘(3) GROUP HEALTH PLAN.—The term ‘group 

20 health plan’ has the meaning given such term by 

21 section 5000(b)(1). 

22 ‘‘(4) HEALTH INSURANCE COVERAGE; HEALTH

23 INSURANCE ISSUER.— 

24 ‘‘(A) HEALTH INSURANCE COVERAGE.— 

25 The term ‘health insurance coverage’ has the 


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1 meaning given such term by section 9832(b)(1) 

2 (applied without regard to subparagraph (B) 

3 thereof, except as provided by the Secretary in 

4 regulations). 

5 ‘‘(B) HEALTH INSURANCE ISSUER.—The 

6 term ‘health insurance issuer’ has the meaning 

7 given such term by section 9832(b)(2). 

8 ‘‘(5) PERSON THAT ADMINISTERS THE PLAN

9 BENEFITS.—The term ‘person that administers the 

10 plan benefits’ shall include the plan sponsor if the 

11 plan sponsor administers benefits under the plan. 

12 ‘‘(6) PLAN SPONSOR.—The term ‘plan sponsor’ 

13 has the meaning given such term in section 3(16)(B) 

14 of the Employee Retirement Income Security Act of 

15 1974. 

16 ‘‘(7) TAXABLE PERIOD.—The term ‘taxable pe17 riod’ means the calendar year or such shorter period 

18 as the Secretary may prescribe. The Secretary may 

19 have different taxable periods for employers of vary20 ing sizes. 

21 ‘‘(8) AGGREGATION RULES.—All employers 

22 treated as a single employer under subsection (b), 

23 (c), (m), or (o) of section 414 shall be treated as a 

24 single employer. 


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1 ‘‘(9) DENIAL OF DEDUCTION.—For denial of 

2 deduction for the tax imposed by this section, see 

3 section 275(a)(6). 

4 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

5 such regulations as may be necessary to carry out this 

6 section.’’. 

7 (b) CLERICAL AMENDMENT.—The table of sections 

8 for chapter 43 of such Code, as amended by section 1306, 

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

‘‘Sec. 4980I. Excise tax on high cost employer-sponsored health coverage.’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2012. 

13 SEC. 6002. INCLUSION OF COST OF EMPLOYER-SPONSORED 

14 HEALTH COVERAGE ON W–2. 

15 (a) IN GENERAL.—Section 6051(a) of the Internal 

16 Revenue Code of 1986 (relating to receipts for employees) 

17 is amended by striking ‘‘and’’ at the end of paragraph 

18 (12), by striking the period at the end of paragraph (13) 

19 and inserting ‘‘, and’’, and by adding after paragraph (13) 

20 the following new paragraph: 

21 ‘‘(14) the aggregate cost (determined under 

22 rules similar to the rules of section 4980B(f)(4)) of 

23 applicable employer-sponsored coverage (as defined 

24 in section 4980I(d)(1)), except that this paragraph 

25 shall not apply to— 


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1 ‘‘(A) coverage to which paragraphs (11) 

2 and (12) apply, or 

3 ‘‘(B) the amount of any salary reduction 

4 contributions to a flexible spending arrange5 ment (within the meaning of section 125).’’. 

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

7 this section shall apply to taxable years beginning after 

8 December 31, 2009. 

9 SEC. 6003. DISTRIBUTIONS FOR MEDICINE QUALIFIED 

10 ONLY IF FOR PRESCRIBED DRUG OR INSU11 LIN. 

12 (a) HSAS.—Subparagraph (A) of section 223(d)(2) 

13 of the Internal Revenue Code of 1986 is amended by add14 ing at the end the following: ‘‘Such term shall include an 

15 amount paid for medicine or a drug only if such medicine 

16 or drug is a prescribed drug (determined without regard 

17 to whether such drug is available without a prescription) 

18 or is insulin.’’. 

19 (b) ARCHER MSAS.—Subparagraph (A) of section 

20 220(d)(2) of the Internal Revenue Code of 1986 is amend21 ed by adding at the end the following: ‘‘Such term shall 

22 include an amount paid for medicine or a drug only if such 

23 medicine or drug is a prescribed drug (determined without 

24 regard to whether such drug is available without a pre25 scription) or is insulin.’’. 


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1 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS

2 AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec3 tion 106 of the Internal Revenue Code of 1986 is amended 

4 by adding at the end the following new subsection: 

5 ‘‘(f) REIMBURSEMENTS FOR MEDICINE RESTRICTED

6 TO PRESCRIBED DRUGS AND INSULIN.—For purposes of 

7 this section and section 105, reimbursement for expenses 

8 incurred for a medicine or a drug shall be treated as a 

9 reimbursement for medical expenses only if such medicine 

10 or drug is a prescribed drug (determined without regard 

11 to whether such drug is available without a prescription) 

12 or is insulin.’’. 

13 (d) EFFECTIVE DATES.— 

14 (1) DISTRIBUTIONS FROM SAVINGS AC15 COUNTS.—The amendments made by subsections (a) 

16 and (b) shall apply to amounts paid with respect to 

17 taxable years beginning after December 31, 2009. 

18 (2) REIMBURSEMENTS.—The amendment made 

19 by subsection (c) shall apply to expenses incurred 

20 with respect to taxable years beginning after Decem21 ber 31, 2009. 


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1 SEC. 6004. INCREASE IN ADDITIONAL TAX ON DISTRIBU2 TIONS FROM HSAS NOT USED FOR QUALIFIED 

3 MEDICAL EXPENSES. 

4 (a) IN GENERAL.—Section 223(f)(4)(A) of the Inter5 nal Revenue Code of 1986 is amended by striking ‘‘10 per6 cent’’ and inserting ‘‘20 percent’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall apply to distributions made after Decem9 ber 31, 2010. 

10 SEC. 6005. LIMITATION ON HEALTH FLEXIBLE SPENDING 

11 ARRANGEMENTS UNDER CAFETERIA PLANS. 

12 (a) IN GENERAL.—Section 125 of the Internal Rev13 enue Code of 1986 is amended— 

14 (1) by redesignating subsections (i) and (j) as 

15 subsections (j) and (k), respectively, and 

16 (2) by inserting after subsection (h) the fol17 lowing new subsection: 

18 ‘‘(i) LIMITATION ON HEALTH FLEXIBLE SPENDING

19 ARRANGEMENTS.—For purposes of this section, if a ben20 efit is provided under a cafeteria plan through employer 

21 contributions to a health flexible spending arrangement, 

22 such benefit shall not be treated as a qualified benefit un23 less the cafeteria plan provides that an employee may not 

24 elect for any taxable year to have salary reduction con25 tributions in excess of $2,500 made to such arrange26 ment.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2010. 

4 SEC. 6006. EXPANSION OF INFORMATION REPORTING RE5 QUIREMENTS. 

6 (a) IN GENERAL.—Section 6041 of the Internal Rev7 enue Code of 1986 is amended by adding at the end the 

8 following new subsections: 

9 ‘‘(h) APPLICATION TO CORPORATIONS.—Notwith10 standing any regulation prescribed by the Secretary before 

11 the date of the enactment of this subsection, for purposes 

12 of this section the term ‘person’ includes any corporation 

13 that is not an organization exempt from tax under section 

14 501(a). 

15 ‘‘(i) REGULATIONS.—The Secretary may prescribe 

16 such regulations and other guidance as may be appro17 priate or necessary to carry out the purposes of this sec18 tion, including rules to prevent duplicative reporting of 

19 transactions.’’. 

20 (b) PAYMENTS FOR PROPERTY AND OTHER GROSS

21 PROCEEDS.—Subsection (a) of section 6041 of the Inter22 nal Revenue Code of 1986 is amended— 

23 (1) by inserting ‘‘amounts in consideration for 

24 property,’’ after ‘‘wages,’’, 


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1 (2) by inserting ‘‘gross proceeds,’’ after ‘‘emolu2 ments, or other’’, and 

3 (3) by inserting ‘‘gross proceeds,’’ after ‘‘setting 

4 forth the amount of such’’. 

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

6 this section shall apply to payments made after December 

7 31, 2011. 

8 SEC. 6007. ADDITIONAL REQUIREMENTS FOR CHARITABLE 

9 HOSPITALS. 

10 (a) REQUIREMENTS TO QUALIFY AS SECTION

11 501(C)(3) CHARITABLE HOSPITAL ORGANIZATION.—Sec12 tion 501 of the Internal Revenue Code of 1986 (relating 

13 to exemption from tax on corporations, certain trusts, etc.) 

14 is amended by redesignating subsection (r) as subsection 

15 (s) and by inserting after subsection (q) the following new 

16 subsection: 

17 ‘‘(r) ADDITIONAL REQUIREMENTS FOR CERTAIN

18 HOSPITALS.— 

19 ‘‘(1) IN GENERAL.—A hospital organization to 

20 which this subsection applies shall not be treated as 

21 described in subsection (c)(3) unless the organiza22 tion— 

23 ‘‘(A) meets the community health needs 

24 assessment requirements described in para25 graph (3), 


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1 ‘‘(B) meets the financial assistance policy 

2 requirements described in paragraph (4), 

3 ‘‘(C) meets the requirements on charges 

4 described in paragraph (5), and 

5 ‘‘(D) meets the billing and collection re6 quirement described in paragraph (6). 

7 ‘‘(2) HOSPITAL ORGANIZATIONS TO WHICH

8 SUBSECTION APPLIES.— 

9 ‘‘(A) IN GENERAL.—This subsection shall 

10 apply to— 

11 ‘‘(i) an organization which operates a 

12 facility which is required by a State to be 

13 licensed, registered, or similarly recognized 

14 as a hospital, and 

15 ‘‘(ii) any other organization which the 

16 Secretary determines has the provision of 

17 hospital care as its principal function or 

18 purpose constituting the basis for its ex19 emption under subsection (c)(3) (deter20 mined without regard to this subsection). 

21 ‘‘(B) ORGANIZATIONS WITH MORE THAN 1

22 HOSPITAL FACILITY.—If a hospital organization 

23 operates more than 1 hospital facility— 


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1 ‘‘(i) the organization shall meet the 

2 requirements of this subsection separately 

3 with respect to each such facility, and 

4 ‘‘(ii) shall not be treated as described 

5 in subsection (c)(3) with respect to any 

6 such facility for which such requirements 

7 are not separately met. 

8 ‘‘(3) COMMUNITY HEALTH NEEDS ASSESS9 MENTS.— 

10 ‘‘(A) IN GENERAL.—An organization meets 

11 the requirements of this paragraph with respect 

12 to any taxable year only if the organization— 

13 ‘‘(i) has conducted a community 

14 health needs assessment which meets the 

15 requirements of subparagraph (B) in such 

16 taxable year or in either of the 2 taxable 

17 years immediately preceding such taxable 

18 year, 

19 ‘‘(ii) has adopted an implementation 

20 strategy to meet the community health 

21 needs identified through such assessment. 

22 ‘‘(B) COMMUNITY HEALTH NEEDS ASSESS23 MENT.—A community health needs assessment 

24 meets the requirements of this paragraph if 

25 such community health needs assessment— 


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1 ‘‘(i) takes into account input from 

2 persons who represent the broad interests 

3 of the community served by the hospital 

4 facility, including those with special knowl5 edge of or expertise in public health, and 

6 ‘‘(ii) is made widely available to the 

7 public. 

8 ‘‘(4) FINANCIAL ASSISTANCE POLICY.—An or9 ganization meets the requirements of this paragraph 

10 if the organization establishes the following policies: 

11 ‘‘(A) FINANCIAL ASSISTANCE POLICY.—A 

12 written financial assistance policy which in13 cludes— 

14 ‘‘(i) eligibility criteria for financial as15 sistance, and whether such assistance in16 cludes free or discounted care, 

17 ‘‘(ii) the basis for calculating amounts 

18 charged to patients, 

19 ‘‘(iii) the method for applying for fi20 nancial assistance, 

21 ‘‘(iv) in the case of an organization 

22 which does not have a separate billing and 

23 collections policy, the actions the organiza24 tion may take in the event of non-payment, 


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1 including collections action and reporting 

2 to credit agencies, and 

3 ‘‘(v) measures to widely publicize the 

4 policy within the community to be served 

5 by the organization. 

6 ‘‘(B) POLICY RELATING TO EMERGENCY

7 MEDICAL CARE.—A written policy requiring the 

8 organization to provide, without discrimination, 

9 care for emergency medical conditions (within 

10 the meaning of section 1867 of the Social Secu11 rity Act (42 U.S.C. 1395dd)), or other medi12 cally necessary care, to individuals regardless of 

13 their eligibility under the financial assistance 

14 policy described in subparagraph (A). 

15 ‘‘(5) LIMITATION ON CHARGES.—An organiza16 tion meets the requirements of this paragraph if the 

17 organization— 

18 ‘‘(A) limits amounts charged for emer19 gency or other medically necessary care pro20 vided to individuals eligible for assistance under 

21 the financial assistance policy described in para22 graph (4)(A) to not more than the lowest 

23 amounts charged to individuals who have insur24 ance covering such care, and 

25 ‘‘(B) prohibits the use of gross charges. 


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1 ‘‘(6) BILLING AND COLLECTION REQUIRE2 MENTS.—An organization meets the requirement of 

3 this paragraph only if the organization does not en4 gage in extraordinary collection actions before the 

5 organization has made reasonable efforts to deter6 mine whether the individual is eligible for assistance 

7 under the financial assistance policy described in 

8 paragraph (4)(A). 

9 ‘‘(7) REGULATORY AUTHORITY.—The Secretary 

10 shall issue such regulations and guidance as may be 

11 necessary to carry out the provisions of this sub12 section, including guidance relating to what con13 stitutes reasonable efforts to determine the eligibility 

14 of a patient under a financial assistance policy for 

15 purposes of paragraph (6).’’. 

16 (b) EXCISE TAX FOR FAILURES TO MEET HOSPITAL

17 EXEMPTION REQUIREMENTS.— 

18 (1) IN GENERAL.—Subchapter D of chapter 42 

19 of the Internal Revenue Code of 1986 (relating to 

20 failure by certain charitable organizations to meet 

21 certain qualification requirements) is amended by 

22 adding at the end the following new section: 


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1 ‘‘SEC. 4959. TAXES ON FAILURES BY HOSPITAL ORGANIZA2 TIONS. 

3 ‘‘If a hospital organization to which section 501(r) 

4 applies fails to meet the requirement of section 501(r)(3) 

5 for any taxable year, there is imposed on the organization 

6 a tax equal to $50,000.’’. 

7 (2) CONFORMING AMENDMENT.—The table of 

8 sections for subchapter D of chapter 42 of such 

9 Code is amended by adding at the end the following 

10 new item: 

‘‘Sec. 4959. Taxes on failures by hospital organizations.’’. 

11 (c) MANDATORY REVIEW OF TAX EXEMPTION FOR

12 HOSPITALS.—The Secretary of the Treasury or the Sec13 retary’s delegate shall review at least once every 3 years 

14 the community benefit activities of each hospital organiza15 tion to which section 501(r) of the Internal Revenue Code 

16 of 1986 (as added by this section) applies. 

17 (d) ADDITIONAL REPORTING REQUIREMENTS.— 

18 (1) COMMUNITY HEALTH NEEDS ASSESSMENTS

19 AND AUDITED FINANCIAL STATEMENTS.—Section 

20 6033(b) of the Internal Revenue Code of 1986 (re21 lating to certain organizations described in section 

22 501(c)(3)) is amended by striking ‘‘and’’ at the end 

23 of paragraph (14), by redesignating paragraph (15) 

24 as paragraph (16), and by inserting after paragraph 

25 (14) the following new paragraph: 


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1 ‘‘(15) in the case of an organization to which 

2 the requirements of section 501(r) apply for the tax3 able year— 

4 ‘‘(A) a description of how the organization 

5 is addressing the needs identified in each com6 munity health needs assessment conducted 

7 under section 501(r)(3) and a description of 

8 any such needs that are not being addressed to9 gether with the reasons why such needs are not 

10 being addressed, and 

11 ‘‘(B) the audited financial statements of 

12 such organization (or, in the case of an organi13 zation the financial statements of which are in14 cluded in a consolidated financial statement 

15 with other organizations, such consolidated fi16 nancial statement).’’. 

17 (2) TAXES.—Section 6033(b)(10) of such Code 

18 is amended by striking ‘‘and’’ at the end of subpara19 graph (B), by inserting ‘‘and’’ at the end of sub20 paragraph (C), and by adding at the end the fol21 lowing new subparagraph: 

22 ‘‘(D) section 4959 (relating to taxes on 

23 failures by hospital organizations),’’. 

24 (e) REPORTS.— 


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1 (1) REPORT ON LEVELS OF CHARITY CARE.— 

2 The Secretary of the Treasury, in consultation with 

3 the Secretary of Health and Human Services, shall 

4 submit to the Committees on Ways and Means, 

5 Education and Labor, and Energy and Commerce of 

6 the House of Representatives and to the Committees 

7 on Finance and Health, Education, Labor, and Pen8 sions of the Senate an annual report on the fol9 lowing: 

10 (A) Information with respect to private 

11 tax-exempt, taxable, and government-owned 

12 hospitals regarding— 

13 (i) levels of charity care provided, 

14 (ii) bad debt expenses, 

15 (iii) unreimbursed costs for services 

16 provided with respect to means-tested gov17 ernment programs, and 

18 (iv) unreimbursed costs for services 

19 provided with respect to non-means tested 

20 government programs. 

21 (B) Information with respect to private 

22 tax-exempt hospitals regarding costs incurred 

23 for community benefit activities. 

24 (2) REPORT ON TRENDS.— 


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1 (A) STUDY.—The Secretary of the Treas2 ury, in consultation with the Secretary of 

3 Health and Human Services, shall conduct a 

4 study on trends in the information required to 

5 be reported under paragraph (1). 

6 (B) REPORT.—Not later than 5 years after 

7 the date of the enactment of this Act, the Sec8 retary of the Treasury, in consultation with the 

9 Secretary of Health and Human Services, shall 

10 submit a report on the study conducted under 

11 subparagraph (A) to the Committees on Ways 

12 and Means, Education and Labor, and Energy 

13 and Commerce of the House of Representatives 

14 and to the Committees on Finance and Health, 

15 Education, Labor, and Pensions of the Senate. 

16 (f) EFFECTIVE DATES.— 

17 (1) IN GENERAL.—Except as provided in para18 graphs (2) and (3), the amendments made by this 

19 section shall apply to taxable years beginning after 

20 the date of the enactment of this Act. 

21 (2) COMMUNITY HEALTH NEEDS ASSESS22 MENT.—The requirements of section 501(r)(3) of 

23 the Internal Revenue Code of 1986, as added by 

24 subsection (a), shall apply to taxable years beginning 


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1 after the date which is 2 years after the date of the 

2 enactment of this Act. 

3 (3) EXCISE TAX.—The amendments made by 

4 subsection (b) shall apply to failures occurring after 

5 the date of the enactment of this Act. 

6 SEC. 6008. IMPOSITION OF ANNUAL FEE ON BRANDED PRE7 SCRIPTION PHARMACEUTICAL MANUFAC8 TURERS AND IMPORTERS. 

9 (a) IMPOSITION OF FEE.— 

10 (1) IN GENERAL.—Each covered entity engaged 

11 in the business of manufacturing or importing 

12 branded prescription drugs shall pay to the Sec13 retary of the Treasury not later than the annual 

14 payment date of each calendar year beginning after 

15 2009 a fee in an amount determined under sub16 section (b). 

17 (2) ANNUAL PAYMENT DATE.—For purposes of 

18 this section, the term ‘‘annual payment date’’ means 

19 with respect to any calendar year the date deter20 mined by the Secretary, but in no event later than 

21 September 30 of such calendar year. 

22 (b) DETERMINATION OF FEE AMOUNT.— 

23 (1) IN GENERAL.—With respect to each covered 

24 entity, the fee under this section for any calendar 


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1 year shall be equal to an amount that bears the 

2 same ratio to $2,300,000,000 as— 

3 (A) the covered entity’s branded prescrip4 tion drug sales taken into account during the 

5 preceding calendar year, bear to 

6 (B) the aggregate branded prescription 

7 drug sales of all covered entities taken into ac8 count during such preceding calendar year. 

9 (2) SALES TAKEN INTO ACCOUNT.—For pur10 poses of paragraph (1), the branded prescription 

11 drug sales taken into account during any calendar 

12 year with respect to any covered entity shall be de13 termined in accordance with the following table: 

With respect to a covered entity’s aggregate branded 

prescription drug sales during the calendar year that 

are: 

The percentage of 

such sales taken into 

account is: 

Not more than $5,000,000 .................................... 0 percent 

More than $5,000,000 but not more than 

$125,000,000.

10 percent 

More than $125,000,000 but not more than 

$225,000,000.

40 percent 

More than $225,000,000 but not more than 

$400,000,000.

75 percent 

More than $400,000,000 ....................................... 100 percent. 

14 (3) SECRETARIAL DETERMINATION.—The Sec15 retary of the Treasury shall calculate the amount of 

16 each covered entity’s fee for any calendar year under 

17 paragraph (1). In calculating such amount, the Sec18 retary of the Treasury shall determine such covered 

19 entity’s branded prescription drug sales on the basis 


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1 of reports submitted under subsection (g) and 

2 through the use of any other source of information 

3 available to the Secretary of the Treasury. 

4 (c) TRANSFER OF FEES TO MEDICARE PART B 

5 TRUST FUND.—There is hereby appropriated to the Fed6 eral Supplementary Medical Insurance Trust Fund estab7 lished under section 1841 of the Social Security Act an 

8 amount equal to the fees received by the Secretary of the 

9 Treasury under subsection (a). 

10 (d) COVERED ENTITY.— 

11 (1) IN GENERAL.—For purposes of this section, 

12 the term ‘‘covered entity’’ means any manufacturer 

13 or importer with gross receipts from branded pre14 scription drug sales. 

15 (2) CONTROLLED GROUPS.— 

16 (A) IN GENERAL.—For purposes of this 

17 subsection, all persons treated as a single em18 ployer under subsection (a) or (b) of section 52 

19 of the Internal Revenue Code of 1986 or sub20 section (m) or (o) of section 414 of such Code 

21 shall be treated as a single covered entity. 

22 (B) INCLUSION OF FOREIGN CORPORA23 TIONS.—For purposes of subparagraph (A), in 

24 applying subsections (a) and (b) of section 52 

25 of such Code to this section, section 1563 of 


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1 such Code shall be applied without regard to 

2 subsection (b)(2)(C) thereof. 

3 (e) BRANDED PRESCRIPTION DRUG SALES.—For 

4 purposes of this section— 

5 (1) IN GENERAL.—The term ‘‘branded prescrip6 tion drug sales’’ means sales of branded prescription 

7 drugs to any specified government program or pur8 suant to coverage under any such program. 

9 (2) BRANDED PRESCRIPTION DRUGS.— 

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

11 prescription drug’’ means— 

12 (i) any prescription drug the applica13 tion for which was submitted under section 

14 505(b) of the Federal Food, Drug, and 

15 Cosmetic Act (21 U.S.C. 355(b)), or 

16 (ii) any biological product the license 

17 for which was submitted under section 

18 351(a) of the Public Health Service Act 

19 (42 U.S.C. 262(a)). 

20 (B) PRESCRIPTION DRUG.—For purposes 

21 of subparagraph (A)(i), the term ‘‘prescription 

22 drug’’ means any drug which is subject to sec23 tion 503(b) of the Federal Food, Drug, and 

24 Cosmetic Act (21 U.S.C. 353(b)). 


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1 (3) EXCLUSION OF ORPHAN DRUG SALES.—The 

2 term ‘‘branded prescription drug sales’’ shall not in3 clude sales of any drug or biological product with re4 spect to which a credit was allowed for any taxable 

5 year under section 45C of the Internal Revenue 

6 Code of 1986. The preceding sentence shall not 

7 apply with respect to any such drug or biological 

8 product after the date on which such drug or bio9 logical product is approved by the Food and Drug 

10 Administration for marketing for any indication 

11 other than the treatment of the rare disease or con12 dition with respect to which such credit was allowed. 

13 (4) SPECIFIED GOVERNMENT PROGRAM.—The 

14 term ‘‘specified government program’’ means— 

15 (A) the Medicare Part D program under 

16 part D of title XVIII of the Social Security Act, 

17 (B) the Medicare Part B program under 

18 part B of title XVIII of the Social Security Act, 

19 (C) the Medicaid program under title XIX 

20 of the Social Security Act, 

21 (D) any program under which branded 

22 prescription drugs are procured by the Depart23 ment of Veterans Affairs, 


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1 (E) any program under which branded pre2 scription drugs are procured by the Department 

3 of Defense, or 

4 (F) the TRICARE retail pharmacy pro5 gram under section 1074g of title 10, United 

6 States Code. 

7 (f) TAX TREATMENT OF FEES.—The fees imposed 

8 by this section— 

9 (1) for purposes of subtitle F of the Internal 

10 Revenue Code of 1986, shall be treated as excise 

11 taxes with respect to which only civil actions for re12 fund under procedures of such subtitle shall apply, 

13 and 

14 (2) for purposes of section 275 of such Code 

15 shall be considered to be a tax described in section 

16 275(a)(6). 

17 (g) REPORTING REQUIREMENT.—Not later than the 

18 date determined by the Secretary of the Treasury fol19 lowing the end of any calendar year, the Secretary of 

20 Health and Human Services, the Secretary of Veterans 

21 Affairs, and the Secretary of Defense shall report to the 

22 Secretary of the Treasury, in such manner as the Sec23 retary of the Treasury prescribes, the total branded pre24 scription drug sales for each covered entity with respect 


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1 to each specified government program under such Sec2 retary’s jurisdiction using the following methodology: 

3 (1) MEDICARE PART D PROGRAM.—The Sec4 retary of Health and Human Services shall report, 

5 for each covered entity and for each branded pre6 scription drug of the covered entity covered by the 

7 Medicare Part D program, the product of— 

8 (A) the per-unit ingredient cost, as re9 ported to the Secretary of Health and Human 

10 Services by prescription drug plans and Medi11 care Advantage prescription drug plans, minus 

12 any per-unit rebate, discount, or other price 

13 concession provided by the covered entity, as re14 ported to the Secretary of Health and Human 

15 Services by the prescription drug plans and 

16 Medicare Advantage prescription drug plans, 

17 and 

18 (B) the number of units of the branded 

19 prescription drug paid for under the Medicare 

20 Part D program. 

21 (2) MEDICARE PART B PROGRAM.—The Sec22 retary of Health and Human Services shall report, 

23 for each covered entity and for each branded pre24 scription drug of the covered entity covered by the 


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1 Medicare Part B program under section 1862(a) of 

2 the Social Security Act, the product of— 

3 (A) the per-unit average sales price (as de4 fined in section 1847A(c) of the Social Security 

5 Act) or the per-unit Part B payment rate for 

6 a separately paid branded prescription drug 

7 without a reported average sales price, and 

8 (B) the number of units of the branded 

9 prescription drug paid for under the Medicare 

10 Part B program. 

11 The Centers for Medicare and Medicaid Services 

12 shall establish a process for determining the units 

13 and the allocated price for purposes of this section 

14 for those branded prescription drugs that are not 

15 separately payable or for which National Drug 

16 Codes are not reported. 

17 (3) MEDICAID PROGRAM.—The Secretary of 

18 Health and Human Services shall report, for each 

19 covered entity and for each branded prescription 

20 drug of the covered entity covered under the Med21 icaid program, the product of— 

22 (A) the per-unit ingredient cost paid to 

23 pharmacies by States for the branded prescrip24 tion drug dispensed to Medicaid beneficiaries, 

25 minus any per-unit rebate paid by the covered 


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1 entity under section 1927 of the Social Security 

2 Act and any State supplemental rebate, and 

3 (B) the number of units of the branded 

4 prescription drug paid for under the Medicaid 

5 program. 

6 (4) DEPARTMENT OF VETERANS AFFAIRS PRO7 GRAMS.—The Secretary of Veterans Affairs shall re8 port, for each covered entity and for each branded 

9 prescription drug of the covered entity the total 

10 amount paid for each such branded prescription 

11 drug procured by the Department of Veterans Af12 fairs for its beneficiaries. 

13 (5) DEPARTMENT OF DEFENSE PROGRAMS AND

14 TRICARE.—The Secretary of Defense shall report, 

15 for each covered entity and for each branded pre16 scription drug of the covered entity, the sum of— 

17 (A) the total amount paid for each such 

18 branded prescription drug procured by the De19 partment of Defense for its beneficiaries, and 

20 (B) for each such branded prescription 

21 drug dispensed under the TRICARE retail 

22 pharmacy program, the product of— 

23 (i) the per-unit ingredient cost, minus 

24 any per-unit rebate paid by the covered en25 tity, and 


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1 (ii) the number of units of the brand2 ed prescription drug dispensed under such 

3 program. 

4 (h) SECRETARY.—For purposes of this section, the 

5 term ‘‘Secretary’’ includes the Secretary’s delegate. 

6 (i) GUIDANCE.—The Secretary of the Treasury shall 

7 publish guidance necessary to carry out the purposes of 

8 this section. 

9 (j) APPLICATION OF SECTION.—This section shall 

10 apply to any branded prescription drug sales after Decem11 ber 31, 2008. 

12 (k) CONFORMING AMENDMENT.—Section 1841(a) of 

13 the Social Security Act is amended by inserting ‘‘or sec14 tion 6008(c) of the America’s Healthy Future Act of 

15 2009’’ after ‘‘this part’’. 

16 SEC. 6009. IMPOSITION OF ANNUAL FEE ON MEDICAL DE17 VICE MANUFACTURERS AND IMPORTERS. 

18 (a) IMPOSITION OF FEE.— 

19 (1) IN GENERAL.—Each covered entity engaged 

20 in the business of manufacturing or importing med21 ical devices shall pay to the Secretary not later than 

22 the annual payment date of each calendar year be23 ginning after 2009 a fee in an amount determined 

24 under subsection (b). 


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1 (2) ANNUAL PAYMENT DATE.—For purposes of 

2 this section, the term ‘‘annual payment date’’ means 

3 with respect to any calendar year the date deter4 mined by the Secretary, but in no event later than 

5 September 30 of such calendar year. 

6 (b) DETERMINATION OF FEE AMOUNT.— 

7 (1) IN GENERAL.—With respect to each covered 

8 entity, the fee under this section for any calendar 

9 year shall be equal to an amount that bears the 

10 same ratio to $4,000,000,000 as— 

11 (A) the covered entity’s gross receipts from 

12 medical device sales taken into account during 

13 the preceding calendar year, bear to 

14 (B) the aggregate gross receipts of all cov15 ered entities from medical device sales taken 

16 into account during such preceding calendar 

17 year. 

18 (2) GROSS RECEIPTS FROM SALES TAKEN INTO

19 ACCOUNT.—For purposes of paragraph (1), the 

20 gross receipts from medical device sales taken into 

21 account during any calendar year with respect to 

22 any covered entity shall be determined in accordance 

23 with the following table: 

With respect to a covered entity’s aggregate gross receipts from medical device sales during the calendar 

year that are: 

The percentage of 

gross receipts taken 

into account is: 

Not more than $5,000,000 .................................... 0 percent 


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With respect to a covered entity’s aggregate gross receipts from medical device sales during the calendar 

year that are: 

The percentage of 

gross receipts taken 

into account is: 

More than $5,000,000 but not more than 

$25,000,000.

50 percent 

More than $25,000,000 ......................................... 100 percent. 

1 (3) SECRETARIAL DETERMINATION.—The Sec2 retary shall calculate the amount of each covered en3 tity’s fee for any calendar year under paragraph (1). 

4 In calculating such amount, the Secretary shall de5 termine such covered entity’s gross receipts from 

6 medical device sales on the basis of reports sub7 mitted by the covered entity under subsection (f) 

8 and through the use of any other source of informa9 tion available to the Secretary. 

10 (c) COVERED ENTITY.— 

11 (1) IN GENERAL.—For purposes of this section, 

12 the term ‘‘covered entity’’ means any manufacturer 

13 or importer with gross receipts from medical device 

14 sales. 

15 (2) CONTROLLED GROUPS.— 

16 (A) IN GENERAL.—For purposes of this 

17 subsection, all persons treated as a single em18 ployer under subsection (a) or (b) of section 52 

19 of the Internal Revenue Code of 1986 or sub20 section (m) or (o) of section 414 of such Code 

21 shall be treated as a single covered entity. 


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1 (B) INCLUSION OF FOREIGN CORPORA2 TIONS.—For purposes of subparagraph (A), in 

3 applying subsections (a) and (b) of section 52 

4 of such Code to this section, section 1563 of 

5 such Code shall be applied without regard to 

6 subsection (b)(2)(C) thereof. 

7 (d) MEDICAL DEVICE SALES.—For purposes of this 

8 section— 

9 (1) IN GENERAL.—The term ‘‘medical device 

10 sales’’ means sales for use in the United States of 

11 any medical device, other than the sales of a medical 

12 device that— 

13 (A) has been classified in class II under 

14 section 513 of the Federal Food, Drug, and 

15 Cosmetic Act (21 U.S.C. 360c) and is primarily 

16 sold to consumers at retail for not more than 

17 $100 per unit, or 

18 (B) has been classified in class I under 

19 such section. 

20 (2) UNITED STATES.—For purposes of para21 graph (1), the term ‘‘United States’’ means the sev22 eral States, the District of Columbia, the Common23 wealth of Puerto Rico, and the possessions of the 

24 United States. 


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1 (3) MEDICAL DEVICE.—For purposes of para2 graph (1), the term ‘‘medical device’’ means any de3 vice (as defined in section 201(h) of the Federal 

4 Food, Drug, and Cosmetic Act (21 U.S.C. 321(h))) 

5 intended for humans. 

6 (e) TAX TREATMENT OF FEES.—The fees imposed 

7 by this section— 

8 (1) for purposes of subtitle F of the Internal 

9 Revenue Code of 1986, shall be treated as excise 

10 taxes with respect to which only civil actions for re11 fund under procedures of such subtitle shall apply, 

12 and 

13 (2) for purposes of section 275 of such Code 

14 shall be considered to be a tax described in section 

15 275(a)(6). 

16 (f) REPORTING REQUIREMENT.—Not later than the 

17 date determined by the Secretary following the end of any 

18 calendar year, each covered entity shall report to the Sec19 retary, in such manner as the Secretary prescribes, the 

20 gross receipts from medical device sales of such covered 

21 entity during such calendar year. 

22 (g) SECRETARY.—For purposes of this section, the 

23 term ‘‘Secretary’’ means the Secretary of the Treasury or 

24 the Secretary’s delegate. 


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1 (h) GUIDANCE.—The Secretary shall publish guid2 ance necessary to carry out the purposes of this section, 

3 including identification of medical devices described in 

4 subsection (d)(1)(A) and with respect to the treatment of 

5 gross receipts from sales of medical devices to another cov6 ered entity. 

7 (i) APPLICATION OF SECTION.—This section shall 

8 apply to any medical device sales after December 31, 

9 2008. 

10 SEC. 6010. IMPOSITION OF ANNUAL FEE ON HEALTH INSUR11 ANCE PROVIDERS. 

12 (a) IMPOSITION OF FEE.— 

13 (1) IN GENERAL.—Each covered entity engaged 

14 in the business of providing health insurance shall 

15 pay to the Secretary not later than the annual pay16 ment date of each calendar year beginning after 

17 2009 a fee in an amount determined under sub18 section (b). 

19 (2) ANNUAL PAYMENT DATE.—For purposes of 

20 this section, the term ‘‘annual payment date’’ means 

21 with respect to any calendar year the date deter22 mined by the Secretary, but in no event later than 

23 September 30 of such calendar year. 

24 (b) DETERMINATION OF FEE AMOUNT.— 


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1 (1) IN GENERAL.—With respect to each covered 

2 entity, the fee under this section for any calendar 

3 year shall be equal to an amount that bears the 

4 same ratio to $6,700,000,000 as— 

5 (A) the covered entity’s net premiums writ6 ten during the preceding calendar year with re7 spect to health insurance for any United States 

8 health risk, bear to 

9 (B) the aggregate net premiums of all cov10 ered entities written during such preceding cal11 endar year with respect to such health insur12 ance. 

13 (2) SECRETARIAL DETERMINATION.—The Sec14 retary shall calculate the amount of each covered en15 tity’s fee for any calendar year under paragraph (1). 

16 In calculating such amount, the Secretary shall de17 termine such covered entity’s net premiums written 

18 with respect to any United States health risk on the 

19 basis of reports submitted by the covered entity 

20 under subsection (f) and through the use of any 

21 other source of information available to the Sec22 retary. 

23 (c) COVERED ENTITY.— 

24 (1) IN GENERAL.—For purposes of this section, 

25 the term ‘‘covered entity’’ means any entity which 


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1 provides health insurance for any United States 

2 health risk. 

3 (2) EXCLUSION.—Such term does not include— 

4 (A) any employer to the extent that such 

5 employer self-insures its employees’ health 

6 risks, or 

7 (B) any governmental entity. 

8 (3) CONTROLLED GROUPS.— 

9 (A) IN GENERAL.—For purposes of this 

10 subsection, all persons treated as a single em11 ployer under subsection (a) or (b) of section 52 

12 of the Internal Revenue Code of 1986 or sub13 section (m) or (o) of section 414 of such Code 

14 shall be treated as a single covered entity (or 

15 employer for purposes of paragraph (2)). 

16 (B) INCLUSION OF FOREIGN CORPORA17 TIONS.—For purposes of subparagraph (A), in 

18 applying subsections (a) and (b) of section 52 

19 of such Code to this section, section 1563 of 

20 such Code shall be applied without regard to 

21 subsection (b)(2)(C) thereof. 

22 (d) UNITED STATES HEALTH RISK.—For purposes 

23 of this section, the term ‘‘United States health risk’’ 

24 means the health risk of any individual who is— 

25 (1) a United States citizen, 


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1 (2) a resident of the United States (within the 

2 meaning of section 7701(b)(1)(A) of the Internal 

3 Revenue Code of 1986), or 

4 (3) located in the United States, with respect to 

5 the period such individual is so located. 

6 (e) TAX TREATMENT OF FEES.—The fees imposed 

7 by this section— 

8 (1) for purposes of subtitle F of the Internal 

9 Revenue Code of 1986, shall be treated as excise 

10 taxes with respect to which only civil actions for re11 fund under procedures of such subtitle shall apply, 

12 and 

13 (2) for purposes of section 275 of such Code 

14 shall be considered to be a tax described in section 

15 275(a)(6). 

16 (f) REPORTING REQUIREMENT.—Not later than the 

17 date determined by the Secretary following the end of any 

18 calendar year, each covered entity shall report to the Sec19 retary, in such manner as the Secretary prescribes, the 

20 covered entity’s net premiums written during such cal21 endar year with respect to health insurance for any United 

22 States health risk. 

23 (g) ADDITIONAL DEFINITIONS.—For purposes of this 

24 section— 


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1 (1) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of the Treasury or the Secretary’s del3 egate. 

4 (2) UNITED STATES.—The term ‘‘United 

5 States’’ means the several States, the District of Co6 lumbia, the Commonwealth of Puerto Rico, and the 

7 possessions of the United States. 

8 (h) GUIDANCE.—The Secretary shall publish guid9 ance necessary to carry out the purposes of this section. 

10 (i) APPLICATION OF SECTION.—This section shall 

11 apply to any net premiums written after December 31, 

12 2008, with respect to health insurance for any United 

13 States health risk. 

14 SEC. 6011. STUDY AND REPORT OF EFFECT ON VETERANS 

15 HEALTH CARE. 

16 (a) IN GENERAL.—The Secretary of Veterans Affairs 

17 shall conduct a study on the effect (if any) of the provi18 sions of sections 6008, 6009, and 6010 on— 

19 (1) the cost of medical care provided to vet20 erans, and 

21 (2) veterans’ access to medical devices and 

22 branded prescription drugs. 

23 (b) REPORT.—The Secretary of Veterans Affairs 

24 shall report the results of the study under subsection (a) 

25 to the Committee on Ways and Means of the House of 


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1 Representatives and to the Committee on Finance of the 

2 Senate not later than December 31, 2012. 

3 SEC. 6012. ELIMINATION OF DEDUCTION FOR EXPENSES 

4 ALLOCABLE TO MEDICARE PART D SUBSIDY. 

5 (a) IN GENERAL.—Section 139A of the Internal Rev6 enue Code of 1986 is amended by striking the second sen7 tence. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2010. 

11 SEC. 6013. MODIFICATION OF ITEMIZED DEDUCTION FOR 

12 MEDICAL EXPENSES. 

13 (a) IN GENERAL.—Subsection (a) of section 213 of 

14 the Internal Revenue Code of 1986 is amended by striking 

15 ‘‘7.5 percent’’ and inserting ‘‘10 percent’’. 

16 (b) TEMPORARY WAIVER OF INCREASE FOR CERTAIN

17 SENIORS.—Section 213 of the Internal Revenue Code of 

18 1986 is amended by adding at the end the following new 

19 subsection: 

20 ‘‘(f) SPECIAL RULE FOR 2013, 2014, 2015, AND

21 2016.—In the case of a taxable year beginning after De22 cember 31, 2012, and ending before January 1, 2017, sub23 section (a) shall be applied with respect to a taxpayer by 

24 substituting ‘7.5 percent’ for ‘10 percent’ if such taxpayer 


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1 or such taxpayer’s spouse has attained age 65 before the 

2 close of such taxable year.’’. 

3 (c) CONFORMING AMENDMENT.—Section 

4 56(b)(1)(B) of the Internal Revenue Code of 1986 is 

5 amended by striking ‘‘by substituting ‘10 percent’ for ‘7.5 

6 percent’ ’’ and inserting ‘‘without regard to subsection (f) 

7 of such section’’. 

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

9 this section shall apply to taxable year beginning after De10 cember 31, 2012. 

11 SEC. 6014. LIMITATION ON EXCESSIVE REMUNERATION 

12 PAID BY CERTAIN HEALTH INSURANCE PRO13 VIDERS. 

14 (a) IN GENERAL.—Section 162(m) of the Internal 

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

16 the following new subparagraph: 

17 ‘‘(6) SPECIAL RULE FOR APPLICATION TO CER18 TAIN HEALTH INSURANCE PROVIDERS.— 

19 ‘‘(A) IN GENERAL.—No deduction shall be 

20 allowed under this chapter— 

21 ‘‘(i) in the case of applicable indi22 vidual remuneration which is for any dis23 qualified taxable year beginning after De24 cember 31, 2012, and which is attributable 

25 to services performed by an applicable indiVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01470 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 vidual during such taxable year, to the ex2 tent that the amount of such remuneration 

3 exceeds $500,000, or 

4 ‘‘(ii) in the case of deferred deduction 

5 remuneration for any taxable year begin6 ning after December 31, 2012, for services 

7 performed by an applicable individual dur8 ing any disqualified taxable year beginning 

9 after December 31, 2009, to the extent 

10 that the amount of such remuneration ex11 ceeds $500,000 reduced (but not below 

12 zero) by the sum of— 

13 ‘‘(I) the applicable individual re14 muneration for such taxable year, plus 

15 ‘‘(II) the portion of the deferred 

16 deduction remuneration for such serv17 ices which was taken into account 

18 under this clause in a preceding tax19 able year. 

20 ‘‘(B) DISQUALIFIED TAXABLE YEAR.—For 

21 purposes of this paragraph, the term ‘disquali22 fied taxable year’ means, with respect to any 

23 employer, any taxable year for which such em24 ployer is a covered health insurance provider. 


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1 ‘‘(C) COVERED HEALTH INSURANCE PRO2 VIDER.—For purposes of this paragraph— 

3 ‘‘(i) IN GENERAL.—The term ‘covered 

4 health insurance provider’ means— 

5 ‘‘(I) with respect to taxable years 

6 beginning after December 31, 2009, 

7 and before January 1, 2013, any em8 ployer which is a health insurance 

9 issuer (as defined in section 

10 9832(b)(2)) and which receives pre11 miums from providing health insur12 ance coverage (as defined in section 

13 9832(b)(1)), and 

14 ‘‘(II) with respect to taxable 

15 years beginning after December 31, 

16 2012, any employer which is a health 

17 insurance issuer (as defined in section 

18 9832(b)(2)) and with respect to which 

19 not less than 25 percent of the gross 

20 premiums received from providing 

21 health insurance coverage (as defined 

22 in section 9832(b)(1)) is from essen23 tial health benefits coverage (as de24 fined in section 5000A(f)(1)). 


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1 ‘‘(ii) AGGREGATION RULES.—Two or 

2 more persons who are treated as a single 

3 employer under subsection (b), (c), (m), or 

4 (o) of section 414 shall be treated as a sin5 gle employer, except that in applying sec6 tion 1563(a) for purposes of any such sub7 section, paragraphs (2) and (3) thereof 

8 shall be disregarded. 

9 ‘‘(D) APPLICABLE INDIVIDUAL REMUNERA10 TION.—For purposes of this paragraph, the 

11 term ‘applicable individual remuneration’ 

12 means, with respect to any applicable individual 

13 for any disqualified taxable year, the aggregate 

14 amount allowable as a deduction under this 

15 chapter for such taxable year (determined with16 out regard to this subsection) for remuneration 

17 (as defined in paragraph (4)(D)) for services 

18 performed by such individual (whether or not 

19 during the taxable year). Such term shall not 

20 include any deferred deduction remuneration 

21 with respect to services performed during the 

22 disqualified taxable year. 

23 ‘‘(E) DEFERRED DEDUCTION REMUNERA24 TION.—For purposes of this paragraph, the 

25 term and ‘deferred deduction remuneration’ 


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1 means remuneration which would be applicable 

2 individual remuneration for services performed 

3 in a disqualified taxable year but for the fact 

4 that the deduction under this chapter (deter5 mined without regard to this paragraph) for 

6 such remuneration is allowable in a subsequent 

7 taxable year. 

8 ‘‘(F) APPLICABLE INDIVIDUAL.—For pur9 poses of this paragraph, the term ‘applicable in10 dividual’ means, with respect to any covered 

11 health insurance provider for any disqualified 

12 taxable year, any individual— 

13 ‘‘(i) who is an officer, director, or em14 ployee in such taxable year, or 

15 ‘‘(ii) who provides services for or on 

16 behalf of such covered health insurance 

17 provider during such taxable year. 

18 ‘‘(G) COORDINATION.—Rules similar to 

19 the rules of subparagraphs (F) and (G) of para20 graph (4) shall apply for purposes of this para21 graph. 

22 ‘‘(H) REGULATORY AUTHORITY.—The Sec23 retary may prescribe such guidance, rules, or 

24 regulations as are necessary to carry out the 

25 purposes of this paragraph.’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2009, with respect to services performed 

4 after such date. 

5 Subtitle B—Other Provisions 

6 SEC. 6021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY 

7 INDIAN TRIBAL GOVERNMENTS. 

8 (a) IN GENERAL.—Part III of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 

10 by inserting after section 139C the following new section: 

11 ‘‘SEC. 139D. INDIAN HEALTH CARE BENEFITS. 

12 ‘‘(a) GENERAL RULE.—Except as otherwise provided 

13 in this section, gross income does not include the value 

14 of any qualified Indian health care benefit. 

15 ‘‘(b) QUALIFIED INDIAN HEALTH CARE BENEFIT.— 

16 For purposes of this section, the term ‘qualified Indian 

17 health care benefit’ means— 

18 ‘‘(1) any health service or benefit provided or 

19 purchased, directly or indirectly, by the Indian 

20 Health Service through a grant to or a contract or 

21 compact with an Indian tribe or tribal organization, 

22 or through a third-party program funded by the In23 dian Health Service, 

24 ‘‘(2) medical care provided or purchased by, or 

25 amounts to reimburse for such medical care provided 


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1 by, an Indian tribe or tribal organization for, or to, 

2 a member of an Indian tribe, including a spouse or 

3 dependent of such a member, 

4 ‘‘(3) coverage under accident or health insur5 ance (or an arrangement having the effect of acci6 dent or health insurance), or an accident or health 

7 plan, provided by an Indian tribe or tribal organiza8 tion for medical care to a member of an Indian 

9 tribe, include a spouse or dependent of such a mem10 ber, and 

11 ‘‘(4) any other medical care provided by an In12 dian tribe or tribal organization that supplements, 

13 replaces, or substitutes for a program or service re14 lating to medical care provided by the Federal gov15 ernment to Indian tribes or members of such a tribe. 

16 ‘‘(c) DEFINITIONS.—For purposes of this section— 

17 ‘‘(1) INDIAN TRIBE.—The term ‘Indian tribe’ 

18 has the meaning given such term by section 

19 45A(c)(6). 

20 ‘‘(2) TRIBAL ORGANIZATION.—The term ‘tribal 

21 organization’ has the meaning given such term by 

22 section 4(l) of the Indian Self-Determination and 

23 Education Assistance Act. 

24 ‘‘(3) MEDICAL CARE.—The term ‘medical care’ 

25 has the same meaning as when used in section 213. 


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1 ‘‘(4) ACCIDENT OR HEALTH INSURANCE; ACCI2 DENT OR HEALTH PLAN.—The terms ‘accident or 

3 health insurance’ and ‘accident or health plan’ have 

4 the same meaning as when used in section 105. 

5 ‘‘(5) DEPENDENT.—The term ‘dependent’ has 

6 the meaning given such term by section 152, deter7 mined without regard to subsections (b)(1), (b)(2), 

8 and (d)(1)(B) thereof. 

9 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—Gross income 

10 of a beneficiary of any qualified Indian health care benefit 

11 shall include the amount of any such benefit which is not 

12 includible in gross income of such beneficiary, or for which 

13 a deduction is allowable to such beneficiary, under any 

14 other provision of this chapter.’’. 

15 (b) CLERICAL AMENDMENT.—The table of sections 

16 for part III of subchapter B of chapter 1 of the Internal 

17 Revenue Code of 1986 is amended by inserting after the 

18 item relating to section 139C the following new item: 

‘‘Sec. 139D. Indian health care benefits.’’. 

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

20 this section shall apply to benefits and coverage provided 

21 after the date of the enactment of this Act. 

22 (d) NO INFERENCE.—Nothing in the amendments 

23 made by this section shall be construed to create an infer24 ence with respect to the exclusion from gross income of— 


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1 (1) benefits provided by an Indian tribe or trib2 al organization that are not within the scope of this 

3 section, and 

4 (2) benefits provided prior to the date of the 

5 enactment of this Act. 

6 SEC. 6022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS 

7 FOR SMALL BUSINESSES. 

8 (a) IN GENERAL.—Section 125 of the Internal Rev9 enue Code of 1986 (relating to cafeteria plans), as amend10 ed by this Act, is amended by redesignating subsections 

11 (j) and (k) as subsections (k) and (l), respectively, and 

12 by inserting after subsection (i) the following new sub13 section: 

14 ‘‘(j) SIMPLE CAFETERIA PLANS FOR SMALL BUSI15 NESSES.— 

16 ‘‘(1) IN GENERAL.—An eligible employer main17 taining a simple cafeteria plan with respect to which 

18 the requirements of this subsection are met for any 

19 year shall be treated as meeting any applicable non20 discrimination requirement during such year. 

21 ‘‘(2) SIMPLE CAFETERIA PLAN.—For purposes 

22 of this subsection, the term ‘simple cafeteria plan’ 

23 means a cafeteria plan— 

24 ‘‘(A) which is established and maintained 

25 by an eligible employer, and 


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1 ‘‘(B) with respect to which the contribution 

2 requirements of paragraph (3), and the eligi3 bility and participation requirements of para4 graph (4), are met. 

5 ‘‘(3) CONTRIBUTIONS REQUIREMENTS.— 

6 ‘‘(A) IN GENERAL.—The requirements of 

7 this paragraph are met if, under the plan the 

8 employer is required, without regard to whether 

9 a qualified employee makes any salary reduc10 tion contribution, to make a contribution to 

11 provide qualified benefits under the plan on be12 half of each qualified employee in an amount 

13 equal to— 

14 ‘‘(i) a uniform percentage (not less 

15 than 2 percent) of the employee’s com16 pensation for the plan year, or 

17 ‘‘(ii) an amount which is not less than 

18 the lesser of— 

19 ‘‘(I) 6 percent of the employee’s 

20 compensation for the plan year, or 

21 ‘‘(II) twice the amount of the sal22 ary reduction contributions of each 

23 qualified employee. 

24 ‘‘(B) MATCHING CONTRIBUTIONS ON BE25 HALF OF HIGHLY COMPENSATED AND KEY EMVerDate Nov 24 2008 22:48 Oct 19, 2009 Jkt 089200 PO 00000 Frm 01479 Fmt 6652 Sfmt 6201 E:\BILLS\S1796.PCS S1796

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1 PLOYEES.—The requirements of subparagraph 

2 (A)(ii) shall not be treated as met if, under the 

3 plan, the rate of contributions with respect to 

4 any salary reduction contribution of a highly 

5 compensated or key employee at any rate of 

6 contribution is greater than that with respect to 

7 an employee who is not a highly compensated or 

8 key employee. 

9 ‘‘(C) ADDITIONAL CONTRIBUTIONS.—Sub10 ject to subparagraph (B), nothing in this para11 graph shall be treated as prohibiting an em12 ployer from making contributions to provide 

13 qualified benefits under the plan in addition to 

14 contributions required under subparagraph (A). 

15 ‘‘(D) DEFINITIONS.—For purposes of this 

16 paragraph— 

17 ‘‘(i) SALARY REDUCTION CONTRIBU18 TION.—The term ‘salary reduction con19 tribution’ means, with respect to a cafe20 teria plan, any amount which is contrib21 uted to the plan at the election of the em22 ployee and which is not includible in gross 

23 income by reason of this section. 

24 ‘‘(ii) QUALIFIED EMPLOYEE.—The 

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1 spect to a cafeteria plan, any employee who 

2 is not a highly compensated or key em3 ployee and who is eligible to participate in 

4 the plan. 

5 ‘‘(iii) HIGHLY COMPENSATED EM6 PLOYEE.—The term ‘highly compensated 

7 employee’ has the meaning given such term 

8 by section 414(q). 

9 ‘‘(iv) KEY EMPLOYEE.—The term ‘key 

10 employee’ has the meaning given such term 

11 by section 416(i). 

12 ‘‘(4) MINIMUM ELIGIBILITY AND PARTICIPA13 TION REQUIREMENTS.— 

14 ‘‘(A) IN GENERAL.—The requirements of 

15 this paragraph shall be treated as met with re16 spect to any year if, under the plan— 

17 ‘‘(i) all employees who had at least 

18 1,000 hours of service for the preceding 

19 plan year are eligible to participate, and 

20 ‘‘(ii) each employee eligible to partici21 pate in the plan may, subject to terms and 

22 conditions applicable to all participants, 

23 elect any benefit available under the plan. 

24 ‘‘(B) CERTAIN EMPLOYEES MAY BE EX25 CLUDED.—For purposes of subparagraph 


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1 (A)(i), an employer may elect to exclude under 

2 the plan employees— 

3 ‘‘(i) who have not attained the age of 

4 21 before the close of a plan year, 

5 ‘‘(ii) who have less than 1 year of 

6 service with the employer as of any day 

7 during the plan year, 

8 ‘‘(iii) who are covered under an agree9 ment which the Secretary of Labor finds to 

10 be a collective bargaining agreement if 

11 there is evidence that the benefits covered 

12 under the cafeteria plan were the subject 

13 of good faith bargaining between employee 

14 representatives and the employer, or 

15 ‘‘(iv) who are described in section 

16 410(b)(3)(C) (relating to nonresident 

17 aliens working outside the United States). 

18 A plan may provide a shorter period of service 

19 or younger age for purposes of clause (i) or (ii). 

20 ‘‘(5) ELIGIBLE EMPLOYER.—For purposes of 

21 this subsection— 

22 ‘‘(A) IN GENERAL.—The term ‘eligible em23 ployer’ means, with respect to any year, any 

24 employer if such employer employed an average 

25 of 100 or fewer employees on business days 


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1 during either of the 2 preceding years. For pur2 poses of this subparagraph, a year may only be 

3 taken into account if the employer was in exist4 ence throughout the year. 

5 ‘‘(B) EMPLOYERS NOT IN EXISTENCE DUR6 ING PRECEDING YEAR.—If an employer was not 

7 in existence throughout the preceding year, the 

8 determination under subparagraph (A) shall be 

9 based on the average number of employees that 

10 it is reasonably expected such employer will em11 ploy on business days in the current year. 

12 ‘‘(C) GROWING EMPLOYERS RETAIN

13 TREATMENT AS SMALL EMPLOYER.— 

14 ‘‘(i) IN GENERAL.—If— 

15 ‘‘(I) an employer was an eligible 

16 employer for any year (a ‘qualified 

17 year’), and 

18 ‘‘(II) such employer establishes a 

19 simple cafeteria plan for its employees 

20 for such year, 

21 then, notwithstanding the fact the em22 ployer fails to meet the requirements of 

23 subparagraph (A) for any subsequent year, 

24 such employer shall be treated as an eligi25 ble employer for such subsequent year with 


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1 respect to employees (whether or not em2 ployees during a qualified year) of any 

3 trade or business which was covered by the 

4 plan during any qualified year. 

5 ‘‘(ii) EXCEPTION.—This subpara6 graph shall cease to apply if the employer 

7 employs an average of 200 or more em8 ployees on business days during any year 

9 preceding any such subsequent year. 

10 ‘‘(D) SPECIAL RULES.— 

11 ‘‘(i) PREDECESSORS.—Any reference 

12 in this paragraph to an employer shall in13 clude a reference to any predecessor of 

14 such employer. 

15 ‘‘(ii) AGGREGATION RULES.—All per16 sons treated as a single employer under 

17 subsection (a) or (b) of section 52, or sub18 section (n) or (o) of section 414, shall be 

19 treated as one person. 

20 ‘‘(6) APPLICABLE NONDISCRIMINATION RE21 QUIREMENT.—For purposes of this subsection, the 

22 term ‘applicable nondiscrimination requirement’ 

23 means any requirement under subsection (b) of this 

24 section, section 79(d), section 105(h), or paragraph 

25 (2), (3), (4), or (8) of section 129(d). 


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1 ‘‘(7) COMPENSATION.—The term ‘compensa2 tion’ has the meaning given such term by section 

3 414(s).’’. 

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

5 this section shall apply to years beginning after December 

6 31, 2010. 

7 SEC. 6023. QUALIFYING THERAPEUTIC DISCOVERY 

8 PROJECT CREDIT. 

9 (a) IN GENERAL.—Subpart E of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986 is amended by inserting after section 48C the fol12 lowing new section: 

13 ‘‘SEC. 48D. QUALIFYING THERAPEUTIC DISCOVERY 

14 PROJECT CREDIT. 

15 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

16 qualifying therapeutic discovery project credit for any tax17 able year is an amount equal to 50 percent of the qualified 

18 investment for such taxable year with respect to any quali19 fying therapeutic discovery project of an eligible taxpayer. 

20 ‘‘(b) QUALIFIED INVESTMENT.— 

21 ‘‘(1) IN GENERAL.—For purposes of subsection 

22 (a), the qualified investment for any taxable year is 

23 the aggregate amount of the costs paid or incurred 

24 in such taxable year for expenses necessary for and 


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1 directly related to the conduct of a qualifying thera2 peutic discovery project. 

3 ‘‘(2) LIMITATION.—The amount which is treat4 ed as qualified investment for all taxable years with 

5 respect to any qualifying therapeutic discovery 

6 project shall not exceed the amount certified by the 

7 Secretary as eligible for the credit under this sec8 tion. 

9 ‘‘(3) EXCLUSIONS.—The qualified investment 

10 for any taxable year with respect to any qualifying 

11 therapeutic discovery project shall not take into ac12 count any cost— 

13 ‘‘(A) for remuneration for an employee de14 scribed in section 162(m)(3), 

15 ‘‘(B) for interest expenses, 

16 ‘‘(C) for facility maintenance expenses, 

17 ‘‘(D) which is identified as a service cost 

18 under section 1.263A-1(e)(4) of title 26, Code 

19 of Federal Regulations, or 

20 ‘‘(E) for any other expense as determined 

21 by the Secretary as appropriate to carry out the 

22 purposes of this section. 

23 ‘‘(4) CERTAIN PROGRESS EXPENDITURE RULES

24 MADE APPLICABLE.—In the case of costs described 

25 in paragraph (1) that are paid for property of a 


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1 character subject to an allowance for depreciation, 

2 rules similar to the rules of subsections (c)(4) and 

3 (d) of section 46 (as in effect on the day before the 

4 date of the enactment of the Revenue Reconciliation 

5 Act of 1990) shall apply for purposes of this section. 

6 ‘‘(5) APPLICATION OF SUBSECTION.—An invest7 ment shall be considered a qualified investment 

8 under this subsection only if such investment is 

9 made in a taxable year beginning in 2009 or 2010. 

10 ‘‘(c) DEFINITIONS.— 

11 ‘‘(1) QUALIFYING THERAPEUTIC DISCOVERY

12 PROJECT.—The term ‘qualifying therapeutic dis13 covery project’ means a project which is designed— 

14 ‘‘(A) to treat or prevent diseases or condi15 tions by conducting pre-clinical activities, clin16 ical trials, and clinical studies, or carrying out 

17 research protocols, for the purpose of securing 

18 approval of a product under section 505(b) of 

19 the Federal Food, Drug, and Cosmetic Act or 

20 section 351(a) of the Public Health Service Act, 

21 ‘‘(B) to diagnose diseases or conditions or 

22 to determine molecular factors related to dis23 eases or conditions by developing molecular 

24 diagnostics to guide therapeutic decisions, or 


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1 ‘‘(C) to develop a product, process, or tech2 nology to further the delivery or administration 

3 of therapeutics. 

4 ‘‘(2) ELIGIBLE TAXPAYER.— 

5 ‘‘(A) IN GENERAL.—The term ‘eligible tax6 payer’ means a taxpayer which employs not 

7 more than 250 employees in all businesses of 

8 the taxpayer at the time of the submission of 

9 the application under subsection (d)(2). 

10 ‘‘(B) AGGREGATION RULES.—All persons 

11 treated as a single employer under subsection 

12 (a) or (b) of section 52, or subsection (m) or 

13 (o) of section 414, shall be so treated for pur14 poses of this paragraph. 

15 ‘‘(3) FACILITY MAINTENANCE EXPENSES.—The 

16 term ‘facility maintenance expenses’ means costs 

17 paid or incurred to maintain a facility, including— 

18 ‘‘(A) mortgage or rent payments, 

19 ‘‘(B) insurance payments, 

20 ‘‘(C) utility and maintenance costs, and 

21 ‘‘(D) costs of employment of maintenance 

22 personnel. 

23 ‘‘(d) QUALIFYING THERAPEUTIC DISCOVERY

24 PROJECT PROGRAM.— 

25 ‘‘(1) ESTABLISHMENT.— 


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1 ‘‘(A) IN GENERAL.—Not later than 60 

2 days after the date of the enactment of this sec3 tion, the Secretary, in consultation with the 

4 Secretary of Health and Human Services, shall 

5 establish a qualifying therapeutic discovery 

6 project program to consider and award certifi7 cations for qualified investments eligible for 

8 credits under this section to qualifying thera9 peutic discovery project sponsors. 

10 ‘‘(B) LIMITATION.—The total amount of 

11 credits that may be allocated under the pro12 gram shall not exceed $1,000,000,000 for the 

13 2-year period beginning with 2009. 

14 ‘‘(2) CERTIFICATION.— 

15 ‘‘(A) APPLICATION PERIOD.—Each appli16 cant for certification under this paragraph shall 

17 submit an application containing such informa18 tion as the Secretary may require during the 

19 period beginning on the date the Secretary es20 tablishes the program under paragraph (1). 

21 ‘‘(B) TIME FOR REVIEW OF APPLICA22 TIONS.—The Secretary shall take action to ap23 prove or deny any application under subpara24 graph (A) within 30 days of the submission of 

25 such application. 


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1 ‘‘(C) MULTI-YEAR APPLICATIONS.—An ap2 plication for certification under subparagraph 

3 (A) may include a request for an allocation of 

4 credits for more than 1 of the years described 

5 in paragraph (1)(B). 

6 ‘‘(3) SELECTION CRITERIA.—In determining 

7 the qualifying therapeutic discovery projects with re8 spect to which qualified investments may be certified 

9 under this section, the Secretary— 

10 ‘‘(A) shall take into consideration only 

11 those projects that show reasonable potential— 

12 ‘‘(i) to result in new therapies— 

13 ‘‘(I) to treat areas of unmet med14 ical need, or 

15 ‘‘(II) to prevent, detect, or treat 

16 chronic or acute diseases and condi17 tions, 

18 ‘‘(ii) to reduce long-term health care 

19 costs in the United States, or 

20 ‘‘(iii) to significantly advance the goal 

21 of curing cancer within the 30-year period 

22 beginning on the date the Secretary estab23 lishes the program under paragraph (1), 

24 and 


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1 ‘‘(B) shall take into consideration which 

2 projects have the greatest potential— 

3 ‘‘(i) to create and sustain (directly or 

4 indirectly) high quality, high-paying jobs in 

5 the United States, and 

6 ‘‘(ii) to advance United States com7 petitiveness in the fields of life, biological, 

8 and medical sciences. 

9 ‘‘(4) DISCLOSURE OF ALLOCATIONS.—The Sec10 retary shall, upon making a certification under this 

11 subsection, publicly disclose the identity of the appli12 cant and the amount of the credit with respect to 

13 such applicant. 

14 ‘‘(e) SPECIAL RULES.— 

15 ‘‘(1) BASIS ADJUSTMENT.—For purposes of 

16 this subtitle, if a credit is allowed under this section 

17 for an expenditure related to property of a character 

18 subject to an allowance for depreciation, the basis of 

19 such property shall be reduced by the amount of 

20 such credit. 

21 ‘‘(2) DENIAL OF DOUBLE BENEFIT.— 

22 ‘‘(A) BONUS DEPRECIATION.—A credit 

23 shall not be allowed under this section for any 

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1 lowed under section 168(k), 1400L(b)(1), or 

2 1400N(d)(1). 

3 ‘‘(B) DEDUCTIONS.—No deduction under 

4 this subtitle shall be allowed for the portion of 

5 the expenses otherwise allowable as a deduction 

6 taken into account in determining the credit 

7 under this section for the taxable year which is 

8 equal to the amount of the credit determined 

9 for such taxable year under subsection (a) at10 tributable to such portion. This subparagraph 

11 shall not apply to expenses related to property 

12 of a character subject to an allowance for de13 preciation the basis of which is reduced under 

14 paragraph (1), or which are described in section 

15 280C(g). 

16 ‘‘(C) CREDIT FOR RESEARCH ACTIVI17 TIES.— 

18 ‘‘(i) IN GENERAL.—Except as pro19 vided in clause (ii), any expenses taken 

20 into account under this section for a tax21 able year shall not be taken into account 

22 for purposes of determining the credit al23 lowable under section 41 or 45C for such 

24 taxable year. 


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1 ‘‘(ii) EXPENSES INCLUDED IN DETER2 MINING BASE PERIOD RESEARCH EX3 PENSES.—Any expenses for any taxable 

4 year which are qualified research expenses 

5 (within the meaning of section 41(b)) shall 

6 be taken into account in determining base 

7 period research expenses for purposes of 

8 applying section 41 to subsequent taxable 

9 years. 

10 ‘‘(f) COORDINATION WITH DEPARTMENT OF TREAS11 URY LOANS.—In the case of any investment with respect 

12 to which the Secretary makes a loan under section 6023(e) 

13 of the America’s Healthy Future Act of 2009— 

14 ‘‘(1) DENIAL OF CREDIT.—No credit shall be 

15 determined under this section with respect to such 

16 investment for the taxable year in which such loan 

17 is made or any subsequent taxable year. 

18 ‘‘(2) RECAPTURE OF CREDITS FOR PROGRESS

19 EXPENDITURES MADE BEFORE LOAN.—If a credit 

20 was determined under this section with respect to 

21 such investment for any taxable year ending before 

22 such loan is made— 

23 ‘‘(A) the tax imposed under subtitle A on 

24 the taxpayer for the taxable year in which such 


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1 loan is made shall be increased by so much of 

2 such credit as was allowed under section 38, 

3 ‘‘(B) the general business carryforwards 

4 under section 39 shall be adjusted so as to re5 capture the portion of such credit which was 

6 not so allowed, and 

7 ‘‘(C) the amount of such loan shall be de8 termined without regard to any reduction in the 

9 basis of any property of a character subject to 

10 an allowance for depreciation by reason of such 

11 credit.’’. 

12 (b) INCLUSION AS PART OF INVESTMENT CREDIT.— 

13 Section 46 of the Internal Revenue Code of 1986 is 

14 amended— 

15 (1) by adding a comma at the end of paragraph 

16 (2), 

17 (2) by striking the period at the end of para18 graph (5) and inserting ‘‘, and’’, and 

19 (3) by adding at the end the following new 

20 paragraph: 

21 ‘‘(6) the qualifying therapeutic discovery project 

22 credit.’’. 

23 (c) CONFORMING AMENDMENTS.— 

24 (1) Section 49(a)(1)(C) of the Internal Revenue 

25 Code of 1986 is amended— 


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1 (A) by striking ‘‘and’’ at the end of clause 

2 (iv), 

3 (B) by striking the period at the end of 

4 clause (v) and inserting ‘‘, and’’, and 

5 (C) by adding at the end the following new 

6 clause: 

7 ‘‘(vi) the basis of any property to 

8 which paragraph (1) of section 48D(e) ap9 plies which is part of a qualifying thera10 peutic discovery project under such section 

11 48D.’’. 

12 (2) Section 280C of such Code is amended by 

13 adding at the end the following new subsection: 

14 ‘‘(g) QUALIFYING THERAPEUTIC DISCOVERY

15 PROJECT CREDIT.— 

16 ‘‘(1) IN GENERAL.—No deduction shall be al17 lowed for that portion of the qualified investment (as 

18 defined in section 48D(b)) otherwise allowable as a 

19 deduction for the taxable year which— 

20 ‘‘(A) would be qualified research expenses 

21 (as defined in section 41(b)), basic research ex22 penses (as defined in section 41(e)(2)), or quali23 fied clinical testing expenses (as defined in sec24 tion 45C(b)) if the credit under section 41 or 


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1 section 45C were allowed with respect to such 

2 expenses for such taxable year, and 

3 ‘‘(B) is equal to the amount of the credit 

4 determined for such taxable year under section 

5 48D(a), reduced by— 

6 ‘‘(i) the amount disallowed as a de7 duction by reason of section 48D(e)(2)(B), 

8 and 

9 ‘‘(ii) the amount of any basis reduc10 tion under section 48D(e)(1). 

11 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP12 ITALIZES RATHER THAN DEDUCTS EXPENSES.—In 

13 the case of expenses described in paragraph (1)(A) 

14 taken into account in determining the credit under 

15 section 48D for the taxable year, if— 

16 ‘‘(A) the amount of the portion of the 

17 credit determined under such section with re18 spect to such expenses, exceeds 

19 ‘‘(B) the amount allowable as a deduction 

20 for such taxable year for such expenses (deter21 mined without regard to paragraph (1)), 

22 the amount chargeable to capital account for the 

23 taxable year for such expenses shall be reduced by 

24 the amount of such excess. 


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1 ‘‘(3) CONTROLLED GROUPS.—Paragraph (3) of 

2 subsection (b) shall apply for purposes of this sub3 section.’’. 

4 (d) CLERICAL AMENDMENT.—The table of sections 

5 for subpart E of part IV of subchapter A of chapter 1 

6 of the Internal Revenue Code of 1986 is amended by in7 serting after the item relating to section 48C the following 

8 new item: 

‘‘Sec. 48D. Qualifying therapeutic discovery project credit.’’. 

9 (e) LOANS FOR QUALIFIED INVESTMENTS IN THERA10 PEUTIC DISCOVERY PROJECTS IN LIEU OF TAX CRED11 ITS.— 

12 (1) IN GENERAL.—Upon application, the Sec13 retary of the Treasury shall, subject to the require14 ments of this subsection, provide a loan to each per15 son who makes a qualified investment in a qualifying 

16 therapeutic discovery project in the amount of 50 

17 percent of such investment. No loan shall be made 

18 under this subsection with respect to any investment 

19 unless such investment is made during a taxable 

20 year beginning in 2009 or 2010. The Secretary of 

21 the Treasury may by regulations prescribe terms for 

22 any loan made under this paragraph. 

23 (2) APPLICATION.— 

24 (A) IN GENERAL.—At the stated election 

25 of the applicant, an application for certification 


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1 under section 48D(d)(2) of the Internal Rev2 enue Code of 1986 for a credit under such sec3 tion for the taxable year of the applicant which 

4 begins in 2009 shall be considered to be an ap5 plication for a loan under paragraph (1) for 

6 such taxable year. 

7 (B) TAXABLE YEARS BEGINNING IN

8 2010.—An application for a loan under para9 graph (1) for a taxable year beginning in 2010 

10 shall be submitted— 

11 (i) not earlier than the day after the 

12 last day of such taxable year, and 

13 (ii) not later than the due date (in14 cluding extensions) for filing the return of 

15 tax for such taxable year. 

16 (C) INFORMATION TO BE SUBMITTED.—An 

17 application for a loan under paragraph (1) shall 

18 include such information and be in such form 

19 as the Secretary may require to state the 

20 amount of the credit allowable (but for the re21 ceipt of a loan under this subsection) under sec22 tion 48D for the taxable year for the qualified 

23 investment with respect to which such applica24 tion is made. 

25 (3) TIME FOR PAYMENT OF LOAN PROCEEDS.— 


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1 (A) IN GENERAL.—The Secretary of the 

2 Treasury shall make payment of the amount of 

3 any loan under paragraph (1) during the 30- 

4 day period beginning on the later of— 

5 (i) the date of the application for such 

6 loan, or 

7 (ii) the date the qualified investment 

8 for which the loan is being made is made. 

9 (B) REGULATIONS.—In the case of invest10 ments of an ongoing nature, the Secretary shall 

11 issue regulations to determine the date on 

12 which a qualified investment shall be deemed to 

13 have been made for purposes of this paragraph. 

14 (4) QUALIFIED INVESTMENT.—For purposes of 

15 this subsection, the term ‘‘qualified investment’’ 

16 means a qualified investment that is certified under 

17 section 48D(d) of the Internal Revenue Code of 

18 1986 for purposes of the credit under such section 

19 48D. 

20 (5) APPLICATION OF CERTAIN RULES.— 

21 (A) IN GENERAL.—In making loans under 

22 this subsection, the Secretary of the Treasury 

23 shall apply rules similar to the rules of section 

24 50 of the Internal Revenue Code of 1986. In 

25 applying such rules, any increase in tax under 


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1 chapter 1 of such Code by reason of an invest2 ment ceasing to be a qualified investment shall 

3 be imposed on the person to whom the loan was 

4 made. 

5 (B) SPECIAL RULES.— 

6 (i) RECAPTURE OF EXCESSIVE LOAN

7 AMOUNTS.—If the amount of a loan made 

8 under this subsection exceeds the amount 

9 allowable as a loan under this subsection, 

10 such excess shall be recaptured under sub11 paragraph (A) as if the investment to 

12 which such excess portion of the loan re13 lates had ceased to be a qualified invest14 ment immediately after such loan was 

15 made. 

16 (ii) LOAN INFORMATION NOT TREAT17 ED AS RETURN INFORMATION.—In no 

18 event shall the amount of a loan made 

19 under paragraph (1), the identity of the 

20 person to whom such loan was made, or a 

21 description of the investment with respect 

22 to which such loan was made be treated as 

23 return information for purposes of section 

24 6103 of the Internal Revenue Code of 

25 1986. 


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•S 1796 PCS

1 (6) EXCEPTION FOR CERTAIN NON-TAX2 PAYERS.—The Secretary of the Treasury shall not 

3 make any loan under this subsection to— 

4 (A) any Federal, State, or local govern5 ment (or any political subdivision, agency, or 

6 instrumentality thereof), 

7 (B) any organization described in section 

8 501(c) of the Internal Revenue Code of 1986 

9 and exempt from tax under section 501(a) of 

10 such Code, 

11 (C) any entity referred to in paragraph (4) 

12 of section 54(j) of such Code, or 

13 (D) any partnership or other pass-thru en14 tity any partner (or other holder of an equity 

15 or profits interest) of which is described in sub16 paragraph (A), (B) or (C). 

17 In the case of a partnership or other pass-thru enti18 ty described in subparagraph (D), partners and 

19 other holders of any equity or profits interest shall 

20 provide to such partnership or entity such informa21 tion as the Secretary of the Treasury may require to 

22 carry out the purposes of this paragraph. 

23 (7) SECRETARY.—Any reference in this sub24 section to the Secretary of the Treasury shall be 

25 treated as including the Secretary’s delegate. 


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1 (8) OTHER TERMS.—Any term used in this sub2 section which is also used in section 48D of the In3 ternal Revenue Code of 1986 shall have the same 

4 meaning for purposes of this subsection as when 

5 used in such section. 

6 (9) DENIAL OF DOUBLE BENEFIT.—No credit 

7 shall be allowed under section 46(6) of the Internal 

8 Revenue Code of 1986 by reason of section 48D of 

9 such Code for any investment for which a loan is 

10 awarded under this subsection. 

11 (10) APPROPRIATIONS.—There is hereby appro12 priated to the Secretary of the Treasury such sums 

13 as may be necessary to carry out this subsection. 

14 (11) TERMINATION.—The Secretary of the 

15 Treasury shall not make any loan to any person 

16 under this subsection unless the application of such 

17 person for such loan is received before January 1, 

18 2013. 

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

20 subsections (a) through (d) of this section shall apply to 

21 amounts paid or incurred after December 31, 2008, in 

22 taxable years beginning after such date. 


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Calendar No. 184 

111TH CONGRESS 

1ST SESSION S. 1796 

[Report No. 111–89] 

A BILL 

To provide affordable, quality health care for all 

spending, and for other purposes. Americans and reduce the growth in health care 

OCTOBER 19, 2009 

Read twice and placed on the calendar 


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