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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1796 Placed on Calendar Senate (PCS)]

                                                       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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``America's Healthy 
Future Act of 2009''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

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

``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.
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.
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

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.
          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.
  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

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 all-urban 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.
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 low-income 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

  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.
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.
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.

                     TITLE I--HEALTH CARE COVERAGE

                  Subtitle A--Insurance Market Reforms

SEC. 1001. INSURANCE MARKET REFORMS IN THE INDIVIDUAL AND SMALL GROUP 
              MARKETS.

    The Social Security Act (42 U.S.C. 301 et seq.) is amended by 
adding at the end the following:

                ``TITLE XXII--HEALTH INSURANCE COVERAGE

``SEC. 2200. ENSURING ESSENTIAL AND AFFORDABLE HEALTH BENEFITS COVERAGE 
              FOR ALL AMERICANS.

    ``It is the purpose of this title to ensure that all Americans have 
access to affordable and essential health benefits coverage--
            ``(1) by requiring that all new health benefits plans 
        offered to individuals and employees in the individual and 
        small group markets be qualified health benefits plans that 
        meet the insurance rating reforms and essential health benefits 
        coverage requirements established under parts A and C;
            ``(2) by establishing State exchanges under part B that 
        provide individuals and employees in the individual and small 
        group markets greater access to qualified health benefits plans 
        and to information concerning these health plans;
            ``(3) by making health benefits coverage more affordable by 
        establishing premium credits and cost-sharing subsidies under 
        part C for individuals enrolling in a health benefits plan 
        through an exchange; and
            ``(4) by establishing the CO-OP program under part D to 
        encourage the establishment of nonprofit health care 
        cooperatives.

                      ``PART A--INSURANCE REFORMS

    ``Subpart 1--Requirements in Individual and Small Group Markets

``SEC. 2201. GENERAL REQUIREMENTS AND DEFINITIONS.

    ``(a) New Plans Must Be Qualified Health Benefits Plans.--Except as 
provided in subpart 3 (relating to preservation of existing coverage), 
each State shall provide that each health benefits plan which is 
offered in the individual or small group market within the State shall 
be a qualified health benefits plan.
    ``(b) Qualified Health Benefits Plan.--For purposes of this title, 
a health benefits plan which is offered in the individual or small 
group market shall be a qualified health benefits plan with respect to 
a State if--
            ``(1) the plan has in effect a certification (which may 
        include a seal or other indication of approval) issued or 
        recognized by the State that such plan meets the applicable 
        requirements of--
                    ``(A) this part (relating to requirements for 
                insurance market reforms); and
                    ``(B) part C (relating to requirements to make 
                health insurance affordable); and
            ``(2) the offeror of the plan--
                    ``(A) is licensed by the State (and in good 
                standing with the State) to offer a health benefits 
                plan in the State; and
                    ``(B) complies with such other requirements as the 
                Secretary or the State may establish pursuant to this 
                title for qualified health benefits plans.
    ``(c) Terms Relating to Health Benefits Plans.--In this title:
            ``(1) Health benefits plan.--
                    ``(A) In general.--The term `health benefits plan' 
                means health insurance coverage and a group health 
                plan.
                    ``(B) Exception for self-insured plans and mewas.--
                Except to the extent specifically provided by this 
                title, the term `health benefits plan' shall not 
                include a group health plan or multiple employer 
                welfare arrangement to the extent the plan is not 
                subject to State insurance regulation under section 514 
                of the Employee Retirement Income Security Act of 1974.
            ``(2) Health insurance coverage and issuer.--The terms 
        `health insurance coverage' and `health insurance issuer' have 
        the meanings given such terms by section 9832(b) of the 
        Internal Revenue Code of 1986.
            ``(3) Group health plan.--The term `group health plan' has 
        the meaning given such term by section 5000(b) of such Code.
            ``(4) Health benefits plan offeror.--The terms `health 
        benefits plan offeror' and `offeror' mean in the case of--
                    ``(A) health insurance coverage, the health 
                insurance issuer offering the coverage; and
                    ``(B) a group health plan--
                            ``(i) the plan sponsor; or
                            ``(ii) in the case of a plan maintained 
                        jointly by 1 or more employers and 1 or more 
                        employee organizations and with respect to 
                        which an employer is the primary source of 
                        financing, such employer.
    ``(d) Definitions Relating to Markets.--In this title:
            ``(1) Group market.--The term `group market' means the 
        health insurance market under which individuals obtain health 
        insurance coverage (directly or through any arrangement) on 
        behalf of themselves (and their dependents) through a group 
        health plan maintained by an employer.
            ``(2) Individual market.--The term `individual market' 
        means the market for health insurance coverage offered to 
        individuals other than in connection with a group health plan.
            ``(3) Large and small group markets.--The terms `large 
        group market' and `small group market' mean the health 
        insurance market under which individuals obtain health 
        insurance coverage (directly or through any arrangement) on 
        behalf of themselves (and their dependents) through a group 
        health plan maintained by a large employer (as defined in 
        section 2230(a)(1)) or by a small employer (as defined in 
        section 2230(a)(2)), respectively.

``SEC. 2202. PROHIBITION ON PREEXISTING CONDITION EXCLUSIONS.

    ``(a) Prohibition.--A health benefits plan shall be treated as a 
qualified health benefits plan only if the plan does not--
            ``(1) impose any preexisting condition exclusion with 
        respect to the plan; or
            ``(2) otherwise impose any limit or condition on the 
        coverage under the plan with respect to an individual or 
        dependent of an individual based on any health status-related 
        factors in relation to the individual or dependent.
    ``(b) Preexisting Condition Exclusion.--For purposes of this 
section, the term `preexisting condition exclusion' means, with respect 
to coverage, a limitation or exclusion of benefits relating to a 
condition based on the fact that the condition was present before the 
date of enrollment for such coverage, whether or not any medical 
advice, diagnosis, care, or treatment was recommended or received 
before such date.
    ``(c) Health Status-related Factors.--For purposes of this section, 
the term `health status-related factors' means health status, medical 
condition (including both physical and mental illnesses), claims 
experience, receipt of health care, medical history, genetic 
information, evidence of insurability (including conditions arising out 
of acts of domestic violence), and disability.

``SEC. 2203. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.

    ``(a) In General.--Except as provided in this section, a health 
benefits plan shall be treated as a qualified health benefits plan only 
if the offeror of the plan--
            ``(1) in the case of a plan offered--
                    ``(A) in the individual market in a State, must 
                accept every individual that applies for enrollment in 
                the plan;
                    ``(B) in the small group market in a State, must 
                accept--
                            ``(i) every small employer in the State 
                        that applies for enrollment of its employees 
                        under the plan; and
                            ``(ii) every individual who is eligible to 
                        enroll in the plan by reason of a relationship 
                        to the employer as is determined--
                                    ``(I) in accordance with the terms 
                                of such plan;
                                    ``(II) as provided by the offeror 
                                under rules of the offeror that are 
                                uniformly applicable to small employers 
                                in the small group market within a 
                                State; and
                                    ``(III) in accordance with all 
                                applicable State laws governing the 
                                offeror and the small group market; and
            ``(2) must renew or continue in force coverage under the 
        plan at the option of the individual or small employer, as 
        applicable.
An offeror of a plan shall not be treated as meeting the requirements 
of this subsection unless the plan also accepts, renews, or continues 
in force coverage of an individual who is eligible for enrollment in 
the plan by reason of their relationship to the named insured under the 
plan.
    ``(b) Special Rules for Guaranteed Issue.--
            ``(1) Enrollment.--Each offeror of a health benefits plan 
        shall establish annual and special enrollment periods meeting 
        the requirements of section 2236(d)(2) and may restrict 
        enrollment described in subsection (a)(1) to such enrollment 
        periods.
            ``(2) Capacity limits.--For purposes of applying subsection 
        (a)(1), if, as determined under regulations prescribed by the 
        Secretary, a plan has a capacity limit, the plan may limit 
        enrollment to that capacity limit but only if the plan selects 
        individuals for enrollment on the basis of the order in which 
        the individuals applied for enrollment and in a manner that 
        does not discriminate in any manner prohibited under section 
        2202.
    ``(c) Guaranteed Renewability.--For purposes of applying subsection 
(a)(2)--
            ``(1) rescissions of coverage shall be treated in the same 
        manner as non-renewals of coverage; and
            ``(2) the premium rate at the time of renewal shall be 
        determined using only the same categories of rate adjustment 
        factors that were used at issue.
The Secretary may prescribe rules for the application of paragraph (2) 
during any period during which the reforms under this subpart are being 
phased in by a State.

``SEC. 2204. PREMIUM RATING RULES.

    ``(a) In General.--A health benefits plan shall be treated as a 
qualified health benefits plan only if the premium rate charged for any 
benefit level of the plan may not vary except as provided in this 
section.
    ``(b) Limits Based on Specific Ratios.--
            ``(1) In general.--In the case of a health benefits plan 
        offered in a rating area, the premium rate charged under the 
        plan may vary only as provided in paragraphs (2) and (3).
            ``(2) By family enrollment.--The premium rate may vary by 
        family enrollment (such as variations within categories and 
        compositions of families) so long as the ratio of the premium 
        for the following types of enrollment to the premium for 
        individual enrollment does not exceed the following ratios:
                    ``(A) Individual, 1 to 1.
                    ``(B) Adult with child, 1.8 to 1.
                    ``(C) Two adults, 2 to 1.
                    ``(D) Family, 3 to 1.
            ``(3) Age and tobacco use.--Within any family enrollment 
        category, the portion of the premium attributable to each 
        individual covered by the health benefits plan in that category 
        may vary as follows:
                    ``(A) Limited age variation permitted.--By age 
                (within the standard age bands established under 
                subsection (c)) so long as the ratio of the highest 
                such premium to the lowest such premium does not exceed 
                the ratio of 4 to 1.
                    ``(B) Tobacco use.--By tobacco use so long as the 
                ratio of the highest such premium to the lowest such 
                premium does not exceed the ratio of 1.5 to 1.
    ``(c) Standard Age Categories.--The Secretary shall establish 
standard age bands between which premium rates may vary as provided in 
subsection (b)(3)(A).
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed to allow a health benefits plan to vary a premium rate on the 
basis of health status-related factors, gender, class of business, 
claims experience, or any other factor not described in subsection (b).

``SEC. 2205. USE OF UNIFORM OUTLINE OF COVERAGE DOCUMENTS.

    ``A health benefits plan shall provide an outline of the plan's 
health insurance coverage meeting the standards of uniformity adopted 
by the Secretary under section 1503 of the America's Healthy Future Act 
of 2009 to--
            ``(1) an applicant at the time of application;
            ``(2) an enrollee at the time of enrollment; and
            ``(3) a policyholder or certificate holder of the plan at 
        the time the policy is issued or the certificate is delivered.

          ``Subpart 2--Reforms Relating to Allocation of Risks

``SEC. 2211. RATING AREAS; POOLING OF RISKS; PHASE IN OF RATING RULES 
              IN SMALL GROUP MARKETS.

    ``(a) Rating Areas.--
            ``(1) In general.--Each State shall establish 1 or more 
        rating areas within that State for purposes of applying the 
        requirements of this title.
            ``(2) Secretarial review.--The Secretary shall review the 
        rating areas established by each State under subsection (a) to 
        ensure the adequacy of such areas for purposes of carrying out 
        the requirements of this title. If the Secretary determines a 
        State's rating areas are not so adequate, the Secretary may 
        establish rating areas for that State.
    ``(b) Single Risk Pool.--
            ``(1) In general.--For purposes of applying the insurance 
        reform requirements under subpart 1--
                    ``(A) Individual market.--The offeror of an insured 
                qualified health benefits plan offered in the 
                individual market in an area covered by an exchange 
                shall consider all enrollees in the plan, including 
                individuals who do not purchase such a plan through an 
                exchange, to be members of a single risk pool.
                    ``(B) Small group market.--The offeror of a 
                qualified health benefits plan offered in the small 
                group market in an area covered by an exchange shall 
                consider all enrollees in the plan, including 
                individuals who do not purchase such a plan through an 
                exchange, to be members of a single risk pool.
            ``(2) State election.--A State may elect to combine the 
        individual and small group markets within the State for 
        purposes of applying this subsection.
    ``(c) Phase in of Insurance Reform Rules in Small Group Market.--
Upon request to, and approval by, the Secretary, each State shall phase 
in the application to the small group market of the insurance reform 
requirements under subpart 1 over a consecutive period of years (not 
greater than 5) beginning July 1, 2013.

``SEC. 2212. RISK ADJUSTMENT.

    ``(a) In General.--Each State shall adopt a risk adjustment model 
described in subsection (b) to implement procedures for the application 
of risk adjustment among qualified health benefit plans and 
grandfathered health benefits plans offered in both the individual and 
small group market. Such procedures shall apply to such qualified 
health benefit plans whether or not purchased through an exchange.
    ``(b) Risk Adjustment Models.--
            ``(1) In general.--The Secretary shall establish 1 or more 
        risk adjustment models for proper adjustments of premium 
        amounts payable among offerors of qualified health benefits 
        plans that take into account (in a manner specified by the 
        Secretary) the differences in the risk characteristics of 
        individuals and employers enrolled under the different plans so 
        as to minimize the impact of adverse selection of enrollees 
        among the plans.
            ``(2) State option.--A State may--
                    ``(A) adopt a risk adjustment model established 
                under paragraph (1); or
                    ``(B) establish its own risk adjustment model for 
                purposes of subsection (a), but only if the State 
                establishes to the satisfaction of the Secretary that 
                such model will produce results substantially similar 
                to the results of risk adjustment models established 
                under paragraph (1) and will not increase costs to the 
                Federal government.
            ``(3) Operation of risk adjustment system.--A State may 
        select an entity certified under subsection (c) to implement 
        and operate its risk adjustment model under this section.
    ``(c) Certification of Entities Conducting Risk Adjustment.--The 
Secretary shall certify entities which the Secretary determines have 
the required expertise to implement the risk adjustment models adopted 
or established under subsection (b). The Secretary may not certify any 
entity which is a health benefits plan offeror or any entity owned or 
operated by such an offeror.

``SEC. 2213. ESTABLISHMENT OF TRANSITIONAL REINSURANCE PROGRAM FOR 
              INDIVIDUAL MARKETS IN EACH STATE.

    ``(a) In General.--Each State shall, not later than July 1, 2013--
            ``(1) include in the Model Regulation, Federal standard, or 
        State law or regulation the State adopts and has in effect 
        under section 2225(a)(2) the provisions described in subsection 
        (b); and
            ``(2) establish (or enter into a contract with) 1 or more 
        applicable reinsurance entities to carry out the reinsurance 
        program under this section.
    ``(b) Model Regulation.--
            ``(1) In general.--In establishing the Model Regulation 
        under section 2225 to carry out this part, the Secretary shall 
        request the National Association of Insurance Commissioners 
        (the `NAIC') to include provisions that enable States to 
        establish and maintain a program under which--
                    ``(A) the offerors of health benefits plans that 
                are offered in the individual market are required to 
                make payments to an applicable reinsurance entity for 
                any plan year beginning in the 36-month period 
                beginning July 1, 2013; and
                    ``(B) the applicable reinsurance entity collects 
                payments under subparagraph (A) and uses amounts so 
                collected to make reinsurance payments to offerors of 
                health benefits plans described in subparagraph (A) 
                that cover high risk individuals for any plan year 
                beginning in such 36-month period.
        If the NAIC does not include such provisions as part of the 
        Model Regulation , the Secretary shall include such provisions 
        in a Federal standard under section 2225(a)(1)(B).
            ``(2) High-risk individual; payment amounts.--The following 
        shall be included in the provisions under paragraph (1):
                    ``(A) Determination of high-risk individuals.--The 
                method by which individuals will be identified as high 
                risk individuals for purposes of the reinsurance 
                program established under this section. Such method 
                shall provide for identification of individuals as 
                high-risk individuals on the basis of--
                            ``(i) a list of at least 50 but not more 
                        than 100 medical conditions that are identified 
                        as high-risk conditions and that may be based 
                        on the identification of diagnostic and 
                        procedure codes that are indicative of 
                        individuals with pre-existing, high-risk 
                        conditions; or
                            ``(ii) any other comparable objective 
                        method of identification recommended by the 
                        American Academy of Actuaries.
                    ``(B) Payment amount.--
                            ``(i) In general.--The formula for 
                        determining the amount of payments that will be 
                        paid to the offerors of health benefits plans 
                        that insure high-risk individuals. Such formula 
                        shall provide for the equitable allocation of 
                        available funds through reconciliation and may 
                        be designed--
                                    ``(I) to provide a schedule of 
                                payments that specifies the amount that 
                                will be paid for each of the conditions 
                                identified under subparagraph (A); or
                                    ``(II) to use any other comparable 
                                method for determining payment amounts 
                                that is recommended by the American 
                                Academy of Actuaries and that 
                                encourages the use of care coordination 
                                and care management programs for high 
                                risk conditions.
                            ``(ii) Coordination with cost-sharing and 
                        risk adjustment payments.--Such provisions 
                        shall provide methods to coordinate the payment 
                        system under this section with any cost-sharing 
                        requirements of a plan and the risk-adjustment 
                        program under section 2212.
            ``(3) Determination of required contributions.--
                    ``(A) In general.--The provisions under paragraph 
                (1) shall include the method for determining the amount 
                each offeror of a health benefits plan participating in 
                the reinsurance program under this section is required 
                to contribute under paragraph (1)(A) for each plan year 
                beginning in the 36-month period beginning July 1, 
                2013. The contribution amount for any plan year may be 
                based on the percentage of revenue of each offeror or 
                on a specified amount per enrollee and may be required 
                to be paid in advance or periodically throughout the 
                plan year.
                    ``(B) Specific requirements.--The method under this 
                paragraph shall be designed so that--
                            ``(i) the contribution amount for each 
                        offeror proportionally reflects each offeror's 
                        fully insured commercial book of business for 
                        all major medical products and third party 
                        administration fees;
                            ``(ii) the contribution amount can include 
                        an additional amount to fund the administrative 
                        expenses of the applicable reinsurance entity;
                            ``(iii) subject to clause (iv), the 
                        aggregate contribution amounts for all States 
                        shall, based on the best estimates of the NAIC 
                        or the Secretary, whichever is applicable, and 
                        without regard to amounts described in clause 
                        (ii), equal $10,000,000,000 for plan years 
                        beginning in the 12-month period beginning July 
                        1, 2013, $6,000,000,000 for plan years 
                        beginning in the 12-month period beginning July 
                        1, 2014, and $4,000,000,000 for plan years 
                        beginning in the 12-month period beginning July 
                        1, 2015; and
                            ``(iv) in addition to the aggregate 
                        contribution amounts under clause (iii), each 
                        offeror's contribution amount reflects its 
                        proportionate share of the $5,000,000,000 
                        amount used to fund the retiree reinsurance 
                        program under section 2216.
                Nothing in this subparagraph shall be construed to 
                preclude a State from collecting additional amounts 
                from offerors on a voluntary basis.
            ``(4) Expenditure of funds.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the provisions under paragraph (1) 
                shall provide that--
                            ``(i) the contribution amounts collected 
                        for any 12-month period may be allocated and 
                        used in any of the three 12-month periods for 
                        which amounts are collected based on the 
                        reinsurance needs of a particular period or to 
                        reflect experience in a prior period; and
                            ``(ii) amounts remaining unexpended as of 
                        June 30, 2016, may be used to make payments 
                        under any reinsurance program of a State in the 
                        individual market in effect in the 24-month 
                        period beginning on July 1, 2016.
                    ``(B) Transfers to secretary for retiree 
                reinsurance.--The provisions under paragraph (1) shall 
                provide that each applicable reinsurance entity shall 
                transfer to the Secretary amounts collected that are 
                allocable to amounts required to be collected under 
                paragraph (3)(B)(iv).
    ``(c) Applicable Reinsurance Entity.--For purposes of this 
section--
            ``(1) In general.--The term `applicable reinsurance entity' 
        means a not-for-profit organization--
                    ``(A) the purpose of which is to help stabilize 
                premiums for coverage in the individual market in a 
                State during the first 3 years of operation of an 
                exchange for that market within the State when the risk 
                of adverse selection related to new rating rules and 
                market changes is greatest; and
                    ``(B) the duties of which shall be to carry out the 
                reinsurance program under this section by coordinating 
                the funding and operation of the risk-spreading 
                mechanisms designed to implement the reinsurance 
                program.
            ``(2) State discretion.--A State may have more than 1 
        applicable reinsurance entity to carry out the reinsurance 
        program under this section within the State and 2 or more 
        States may enter into agreements to provide for an applicable 
        reinsurance entity to carry out such program in all such 
        States.
            ``(3) Entities are tax-exempt.--An applicable reinsurance 
        entity established under this section shall be treated as an 
        organization exempt from taxation under section 501(a) of the 
        Internal Revenue Code of 1986. The preceding sentence shall not 
        apply to the tax imposed by section 511 such Code (relating to 
        tax on unrelated business taxable income of an exempt 
        organization).
    ``(d) Coordination With State High-risk Pools.--The State shall 
eliminate or modify any State high-risk pool to the extent necessary to 
carry out the reinsurance program established under this section. The 
State may coordinate the State high-risk pool with such program to the 
extent not inconsistent with the provisions of this section.

``SEC. 2214. ESTABLISHMENT OF RISK CORRIDORS FOR PLANS IN INDIVIDUAL 
              AND SMALL GROUP MARKETS.

    ``(a) In General.--The Secretary shall establish and administer a 
program of risk corridors for plan years beginning during the 36-month 
period beginning on July 1, 2013, under which a qualified health 
benefits plan offered in the individual or small group market may elect 
(before the beginning of such 36-month period) to participate in a 
payment adjustment system based on the ratio of the allowable costs of 
the plan to the plan's aggregate premiums. Such program shall be based 
on the program for regional participating provider organizations under 
part D of title XVIII.
    ``(b) Payment Methodology.--
            ``(1) Payments out.--The Secretary shall provide under the 
        program established under subsection (a) that if--
                    ``(A) a participating plan's allowable costs for 
                any plan year are more than 103 percent but not more 
                than 108 percent of the target amount, the Secretary 
                shall pay to the plan an amount equal to 50 percent of 
                the target amount in excess of 103 percent of the 
                target amount; and
                    ``(B) a participating plan's allowable costs for 
                any plan year are more than 108 percent of the target 
                amount, the Secretary shall pay to the plan an amount 
                equal to the sum of 2.5 percent of the target amount 
                plus 80 percent of allowable costs in excess of 108 
                percent of the target amount.
            ``(2) Payments in.--The Secretary shall provide under the 
        program established under subsection (a) that if--
                    ``(A) a participating plan's allowable costs for 
                any plan year are less than 97 percent but not less 
                than 92 percent of the target amount, the plan shall 
                pay to the Secretary an amount equal to 50 percent of 
                the excess of 97 percent of the target amount over the 
                allowable costs; and
                    ``(B) a participating plan's allowable costs for 
                any plan year are less than 92 percent of the target 
                amount, the plan shall pay to the Secretary an amount 
                equal to the sum of 2.5 percent of the target amount 
                plus 80 percent of the excess of 92 percent of the 
                target amount over the allowable costs.
    ``(c) Definitions.--In this section:
            ``(1) Allowable costs.--
                    ``(A) In general.--The amount of allowable costs of 
                a plan for any year is an amount equal to the total 
                costs (other than administrative costs) of the plan in 
                providing benefits covered by the plan.
                    ``(B) Reduction for risk adjustment and reinsurance 
                payments.--Allowable costs shall be reduced by any risk 
                adjustment and reinsurance payments received under 
                section 2212 and 2213.
            ``(2) Target amount.--The target amount of a plan for any 
        year is an amount equal to the total premiums (including any 
        premium credits or subsidies under any governmental program) 
        reduced by the administrative costs of the plan.

``SEC. 2215. TEMPORARY HIGH RISK POOLS FOR INDIVIDUALS WITH PREEXISTING 
              CONDITIONS.

    ``(a) Establishment of High Risk Pools.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this title, the Secretary shall establish 1 or 
        more high risk pools that--
                    ``(A) provide to all eligible individuals health 
                insurance coverage (or comparable coverage) that does 
                not impose any preexisting condition exclusion with 
                respect to such coverage for all eligible individuals; 
                and
                    ``(B) provide for health benefits coverage and 
                premium rates described under subsection (b).
            ``(2) Administration.--The Secretary may carry out this 
        section--
                    ``(A) directly; or
                    ``(B) through agreements, grants, or contracts with 
                States or other persons the Secretary determines 
                appropriate.
    ``(b) Coverage and Premium Rates.--Except as provided in subsection 
(c)(2)--
            ``(1) Coverage.--The Secretary shall provide that the 
        health benefits coverage provided to an eligible individual 
        through a high risk pool under this section shall--
                    ``(A) consist of the essential benefits package 
                described in section 2242; and
                    ``(B) provide the bronze level of coverage 
                described in section 2243(b)(1).
            ``(2) Premium rates.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the premium rate charged to an 
                eligible individual enrolled in a high risk pool shall 
                be equal to the standard premium rate for a health 
                benefits plan providing the essential benefits package 
                and bronze level of coverage described in paragraph 
                (1).
                    ``(B) Variation of premiums.--The Secretary may 
                vary the premium under subparagraph (A) to the same 
                extent, and in the same manner, as the offeror of a 
                qualified health benefits plan may vary the premium for 
                the plan under section 2204.
    ``(c) Funding; Termination of Authority.--
            ``(1) In general.--There is appropriated to the Secretary, 
        out of any moneys in the Treasury not otherwise appropriated, 
        $5,000,000,000 to pay claims against (and administrative costs 
        of) the high risk pool in excess of the premiums collected from 
        eligible individuals enrolled in the high risk pool. Such funds 
        shall be available without fiscal year limitation.
            ``(2) Insufficient funds.--If the Secretary estimates for 
        any fiscal year that the aggregate amounts available for 
        payment of expenses of the high risk pool will be less than the 
        amount of the expenses, the Secretary shall make such 
        adjustments as are necessary to eliminate such deficit, 
        including reducing benefits, increasing premiums, or 
        establishing waiting lists.
            ``(3) Termination of authority.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), coverage of eligible individuals 
                under a high risk pool shall terminate as of the end of 
                June 30, 2013.
                    ``(B) Transition to exchange.--The Secretary shall 
                develop procedures to provide for the transition of 
                eligible individuals enrolled in health insurance 
                coverage offered through a high risk pool established 
                under this section into qualified health benefits plans 
                offered through an exchange. Such procedures shall 
                ensure that there is no lapse in coverage with respect 
                to the individual and may extend coverage after June 
                30, 2013, if the Secretary determines necessary to 
                avoid such a lapse.
    ``(d) Eligible Individual.--In this section, the term `eligible 
individual' means an individual who demonstrates to the satisfaction of 
the Secretary that the individual--
            ``(1) has been denied health insurance coverage by reason 
        of a preexisting condition (as defined in section 2202(b));
            ``(2) has been uninsured for a continuous period of at 
        least 6 months before the date of application for enrollment in 
        a high risk pool;
            ``(3) is not eligible for essential health benefits 
        coverage (as defined in section 5000A(f)); and
            ``(4) is an individual who is, and who is reasonably 
        expected to be for the entire period of coverage, a citizen or 
        national of the United States, an alien lawfully admitted to 
        the United States for permanent residence, or an alien lawfully 
        present in the United States.

``SEC. 2216. REINSURANCE FOR RETIREES COVERED BY EMPLOYER-BASED PLANS.

    ``(a) Administration.--
            ``(1) In general.--Not later than 90 days after the date of 
        enactment of this section, the Secretary shall establish a 
        temporary reinsurance program to provide reimbursement to 
        participating employment-based plans for a portion of the cost 
        of providing health benefits to retirees during the period 
        beginning on the date on which such program is established and 
        ending on the date on which the Secretary estimates that 
        applications for payments under this section will have been 
        made that equal the funds made available under this section 
        (reduced by any administrative costs of the program).
            ``(2) Reference.--In this section:
                    ``(A) Health benefits.--The term `health benefits' 
                means medical, surgical, hospital, prescription drug, 
                and such other benefits as shall be determined by the 
                Secretary, whether self-funded, or delivered through 
                the purchase of insurance or otherwise.
                    ``(B) Employment-based plan.--The term `employment-
                based plan' means a group health benefits plan that--
                            ``(i) is--
                                    ``(I) maintained by one or more 
                                current or former employers (including 
                                without limitation any State or local 
                                government or political subdivision 
                                thereof), an employee organization, a 
                                voluntary employees' beneficiary 
                                association, or a committee or board of 
                                individuals appointed to administer 
                                such plan; or
                                    ``(II) a multiemployer plan (as 
                                defined in section 3(37) of the 
                                Employee Retirement Income Security Act 
                                of 1974); and
                            ``(ii) provides health benefits to 
                        retirees.
                    ``(C) Retirees.--The term `retirees' means 
                individuals who are age 55 and older but are not 
                eligible for coverage under title XVIII of the Social 
                Security Act, and who are not active employees of an 
                employer maintaining, or currently contributing to, the 
                employment-based plan or of any employer that has made 
                substantial contributions to fund such plan.
    ``(b) Participation.--
            ``(1) Employment-based plan eligibility.--A participating 
        employment-based plan is an employment-based plan that--
                    ``(A) meets the requirements of paragraph (2) with 
                respect to benefits provided under the plan; and
                    ``(B) submits to the Secretary an application for 
                participation in the program, at such time, in such 
                manner, and containing such information as the 
                Secretary shall require.
            ``(2) Plan requirements.--An employment-based plan meets 
        the requirements of this paragraph if the plan--
                    ``(A) provides benefits appropriate for individuals 
                between the ages described in subsection (a)(2)(C) and 
                that are certified as so appropriate by the Secretary;
                    ``(B) implements programs and procedures to 
                generate cost-savings with respect to participants with 
                chronic and high-cost conditions; and
                    ``(C) provides documentation of the actual cost of 
                medical claims involved and for which reimbursement is 
                sought under this section.
    ``(c) Payments.--
            ``(1) Submission of claims.--
                    ``(A) In general.--A participating employment-based 
                plan shall submit claims for reimbursement to the 
                Secretary which shall contain documentation of the 
                actual costs of the items and services for which each 
                claim is being submitted.
                    ``(B) Basis for claims.--Claims submitted under 
                paragraph (1) shall be based on the actual amount 
                expended by the participating employment-based plan 
                involved within the plan year for the appropriate 
                employment-based health benefits provided to a retiree 
                or the spouse, surviving spouse, or dependent of such 
                retiree. In determining the amount of a claim for 
                purposes of this subsection, the participating 
                employment-based plan shall take into account any 
                negotiated price concessions (such as discounts, direct 
                or indirect subsidies, rebates, and direct or indirect 
                remunerations) obtained by such plan with respect to 
                such health benefit. For purposes of determining the 
                amount of any such claim, the costs paid by the retiree 
                or the retiree's spouse, surviving spouse, or dependent 
                in the form of deductibles, co-payments, or co-
                insurance shall be included in the amounts paid by the 
                participating employment-based plan.
            ``(2) Program payments.--If the Secretary determines that a 
        participating employment-based plan has submitted a valid claim 
        under paragraph (1), the Secretary shall reimburse such plan 
        for 80 percent of that portion of the costs attributable to 
        such claim that exceed $15,000, subject to the limits contained 
        in paragraph (3).
            ``(3) Limit.--To be eligible for reimbursement under the 
        program, a claim submitted by a participating employment-based 
        plan under paragraph (1) with respect to any individual shall 
        not be less than $15,000 nor greater than $90,000. Such amounts 
        shall be adjusted each fiscal year based on the percentage 
        increase in the Medical Care Component of the Consumer Price 
        Index for all urban consumers (rounded to the nearest multiple 
        of $1,000) for the year involved.
            ``(4) Use of payments.--Amounts paid to a participating 
        employment-based plan under this subsection shall be used to 
        lower costs for the plan. Such payments may be used to reduce 
        premium costs for an entity described in subsection 
        (a)(2)(B)(i) or to reduce premium contributions, co-payments, 
        deductibles, co-insurance, or other out-of-pocket costs for 
        plan participants. Such payments shall not be used as general 
        revenues for an entity described in subsection (a)(2)(B)(i). 
        The Secretary shall develop a mechanism to monitor the 
        appropriate use of such payments by such entities.
            ``(5) Payments not treated as income.--Payments received 
        under this subsection shall not be included in determining the 
        gross income of an entity described in subsection (a)(2)(B)(i) 
        that is maintaining or currently contributing to a 
        participating employment-based plan.
            ``(6) Appeals.--The Secretary shall establish--
                    ``(A) an appeals process to permit participating 
                employment-based plans to appeal a determination of the 
                Secretary with respect to claims submitted under this 
                section; and
                    ``(B) procedures to protect against fraud, waste, 
                and abuse under the program.
    ``(d) Audits.--The Secretary shall conduct annual audits of claims 
data submitted by participating employment-based plans under this 
section to ensure that such plans are in compliance with the 
requirements of this section.
    ``(e) Available Funds.--
            ``(1) In general.--The Secretary of the Treasury shall 
        establish a separate account within the Treasury of the United 
        States for deposit of amounts transferred to the Secretary of 
        Health and Human Services under section 2213(b)(4)(B).
            ``(2) Appropriations.--Amounts in the account are hereby 
        appropriated for use by the Secretary in carrying out the 
        program under this section.
            ``(3) Limitations.--The Secretary has the authority to stop 
        taking applications for participation in the program if 
        applications will exceed amounts in the account.

    ``Subpart 3--Preservation of Right to Maintain Existing Coverage

``SEC. 2221. GRANDFATHERED HEALTH BENEFITS PLANS.

    ``(a) In General.--In the case of a grandfathered health benefits 
plan--
            ``(1) nothing in this title shall be construed to require 
        that an individual terminate coverage under the plan if such 
        individual was enrolled in the plan as of the day before the 
        effective date of this title;
            ``(2) except as provided in subsection (b), the 
        requirements of this part shall not apply to the plan; and
            ``(3) the plan shall not be treated as a qualified health 
        benefits plan for purposes of this title.
    ``(b) Application of Rating Rules in Small Group Market.--Each 
State shall phase in the application of the insurance reform 
requirements under subpart 1 to grandfathered health benefits plans 
offered in the small group market within the State over a consecutive 
period of years (not greater than 5) beginning July 1, 2013.
    ``(c) Grandfathered Health Benefits Plan.--In this title:
            ``(1) In general.--The term `grandfathered health benefits 
        plan' means any of the following that was offered and was in 
        force and effect on the effective date of this title:
                    ``(A) Health insurance coverage in the individual 
                market.
                    ``(B) A group health plan.
            ``(2) Limited new enrollment.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), a health benefits plan shall 
                cease to be a grandfathered health benefits plan if it 
                enrolls individuals who were not enrolled in the plan 
                as of the day before the date described in paragraph 
                (1).
                    ``(B) Allowance for family members to join current 
                coverage.--Family members of an individual enrolled in 
                a health benefits plan as of the day before the date 
                described in paragraph (1) may enroll in the plan on or 
                after such date.
                    ``(C) Allowance for new employees to join current 
                plan.--A group health plan of an employer that provides 
                coverage as of the day before the date described in 
                paragraph (1) may provide for the enrolling of new 
                employees (and their families) in such plan.
            ``(3) Special rule for catastrophic plans.--If health 
        insurance coverage offered and in force in the individual 
        market as of the day before the effective of this title is 
        actuarially equivalent to a catastrophic plan described in 
        section 2243(c), such coverage shall be treated as a 
        grandfathered health benefits plan for purposes of this 
        section.

                 ``Subpart 4--Continued Role of States

``SEC. 2225. CONTINUED STATE ENFORCEMENT OF INSURANCE REGULATIONS.

    ``(a) In General.--
            ``(1) Model regulation.--
                    ``(A) In general.--The Secretary shall request the 
                National Association of Insurance Commissioners (in 
                this section referred to as the `NAIC') to, not later 
                than 12 months after the date of enactment of this 
                title, develop and promulgate a Model Regulation that 
                implements the requirements set forth in this title for 
                health benefit plans offered within a State. In 
                developing and promulgating the Model Regulation, the 
                NAIC shall consult with its members, health insurance 
                issuers, consumer organizations, and such other 
                individuals as the NAIC selects in a manner designed to 
                ensure balanced representation among interested 
                parties.
                    ``(B) Secretarial action.--The Secretary shall 
                include the Model Regulation established under 
                paragraph (1) in the regulations prescribed by the 
                Secretary to implement the requirements described in 
                subparagraph (A). If the NAIC does not promulgate the 
                Model Regulation within the 12-month period under 
                subparagraph (A), the Secretary shall establish a 
                Federal standard implementing such requirements.
            ``(2) State action.--Each State that elects to apply the 
        requirements set forth in this title to health benefit plans 
        offered within the State shall, not later than July 1, 2013, 
        adopt and have in effect--
                    ``(A) the Model Regulation or Federal standard 
                established under paragraph (1), whichever is 
                applicable; or
                    ``(B) a State law or regulation that the Secretary 
                determines implements the requirements for health 
                benefit plans offered within the State.
            ``(3) Failure to implement provisions.--
                    ``(A) In general.--If--
                            ``(i) a State does not elect to apply the 
                        requirements set forth in this title to health 
                        benefit plans offered within the State; or
                            ``(ii) the Secretary determines that an 
                        electing State has failed to adopt or 
                        substantially enforce the Model Regulation, 
                        Federal standard, or State law or regulations 
                        described in paragraph (2), whichever is 
                        applicable, with respect to health benefits 
                        plan offerors in the State,
                the Secretary shall implement and enforce such 
                requirements insofar as they relate to the issuance, 
                sale, renewal, and offering of health benefits plans in 
                such State until such time as the Secretary determines 
                the State has adopted and is substantially enforcing 
                the requirements.
                    ``(B) Enforcement authority.--The provisions of 
                section 2722(b) of the Public Health Services Act shall 
                apply to the enforcement under subparagraph (A) of the 
                provisions of this part (without regard to any 
                limitation on the application of those provisions to 
                group health plans).
            ``(4) Ratings reforms must apply uniformly to all 
        offerors.--The Model Regulation, Federal standard, or State law 
        and regulation implemented by a State under this subsection 
        shall require that any standard or requirement adopted pursuant 
        to this title (including any standard or requirement described 
        in subsection (c) that offers more protection to consumers than 
        the protection offered by any standard or requirement set forth 
        in this title) shall be applied uniformly to all offerors of 
        all health benefits plans in the individual or small group 
        market, whichever is applicable.
    ``(b) State Exchanges.--
            ``(1) Exchanges for qualified plans.--
                    ``(A) In general.--Subject to paragraph (2), not 
                later than July 1, 2013, an electing State under 
                subsection (a)(2) shall establish and have in operation 
                1 or more exchanges (including SHOP exchanges) meeting 
                the requirements of part B with respect to the offering 
                of qualified health benefits plans through the 
                exchange.
                    ``(B) Failure to establish.--If--
                            ``(i) a State is not an electing State 
                        under subsection (a)(2); or
                            ``(ii) an electing State does not establish 
                        the exchanges described in subparagraph (A) 
                        within 24 months after the date of enactment of 
                        this title (or the Secretary determines at the 
                        end of the 24-month period that the exchanges 
                        will not be operational by July 1, 2013),
                the Secretary shall enter into a contract with a 
                nongovernmental entity to establish and operate the 
                exchanges within the State.
            ``(2) Interim exchanges.--Each electing State under 
        subsection (a)(2) shall as soon as practicable establish the 
        exchanges described in section 2235(e) for use by residents of 
        the State during the period beginning January 1, 2010, and 
        ending June 30, 2013. In the case of a State that is not an 
        electing State under subsection (a)(2), or if the Secretary 
        determines that the exchanges in an electing State will not be 
        operational within a reasonable period of time after the date 
        of enactment of this title, the Secretary shall enter into a 
        contract with a nongovernmental entity to establish and operate 
        the exchanges within the State during such period.
    ``(c) Continued Applicability of State Law With Respect to Health 
Benefits Plans.--
            ``(1) In general.--Subject to paragraphs (2) and (3), this 
        title shall not be construed to supersede any provision of 
        State law which establishes, implements, or continues in effect 
        any standard or requirement relating to health benefits plan 
        offerors in connection with a health benefits plan that offers 
        more protection to consumers than the protection offered by any 
        standard or requirement set forth in this title. The standards 
        or requirements referred to in the preceding sentence shall 
        include standards or requirements relating to--
                    ``(A) consumer protections, including claims 
                grievance procedures, external review of claims 
                determinations, oversight of insurance agent practices 
                and training, and insurance market conduct;
                    ``(B) premium rating reviews;
                    ``(C) solvency and reserve requirements relating to 
                the licensure of health insurance issuers operating in 
                the State; and
                    ``(D) the assessment of State-based premium taxes 
                on health insurance issuers.
            ``(2) Special rule for rating requirements.--For purposes 
        of paragraph (1), in the case of the ratings requirements under 
        section 2204, a State law shall not be treated as offering more 
        protection to consumers than the protection offered by such 
        requirements if the State law imposes ratios that are greater 
        than the ratios specified in section 2204(b).
            ``(3) Continued preemption with respect to group health 
        plans.--Nothing in this part shall be construed to affect or 
        modify the provisions of section 514 of the Employee Retirement 
        Income Security Act of 1974 with respect to group health plans.
    ``(d) Automatic Enrollment.--A State may institute a program to 
provide that offerors of qualified health benefit plans, small 
employers, and exchanges offering qualified health benefits plans in 
the individual and small group market within the State may 
automatically enroll individuals and employees in, or continue 
enrollment of individuals in, qualified health benefit plans where 
appropriate to ensure coverage of the individuals. Any automatic 
enrollment program shall include adequate notice and the opportunity 
for an individual or employee to opt out of any coverage the individual 
or employee were automatically enrolled in.
    ``(e) Claims Review Process.--Each State shall--
            ``(1) require each offeror of a qualified health benefits 
        plans offered through an exchange--
                    ``(A) to provide an internal claims appeal process;
                    ``(B) to provide notice in clear language and in 
                the enrollee's primary language of available internal 
                and external appeals processes and the availability of 
                the ombudsman established under section 2229(a) to 
                assist them with the appeals processes; and
                    ``(C) to allow an enrollee to review their file, to 
                present evidence and testimony as part of the appeals 
                process, and to receive continued coverage pending the 
                outcome of the appeals process;
            ``(2) provide an external review process for such plans 
        that, at a minimum, includes the consumer protections set forth 
        in the Uniform External Review Model Act promulgated by the 
        National Association of Insurance Commissioners and is binding 
        on such plans; and
            ``(3) ensure enrollees can seek judicial review through 
        available Federal or State procedures.
    ``(f) Applicable State Authority.--In this title, the term 
`applicable State authority' means the State insurance commissioner or 
official or officials designated by the State to enforce the 
requirements of this title for the State involved.

``SEC. 2226. WAIVER OF HEALTH INSURANCE REFORM REQUIREMENTS.

    ``(a) Application.--A State may apply to the Secretary for the 
waiver of all or any requirements under this title and section 5000A of 
the Internal Revenue Code of 1986 with respect to health insurance 
coverage within that State for plan years beginning on or after July 1, 
2015. Such application shall--
            ``(1) be filed at such time and in such manner as the 
        Secretary may require; and
            ``(2) contain such information as the Secretary may 
        require, including--
                    ``(A) a comprehensive description of the State 
                legislation or program for implementing a plan meeting 
                the requirements for a waiver under this section; and
                    ``(B) a 10-year budget plan for such plan that is 
                budget neutral for the Federal government.
    ``(b) Granting of Waivers.--The Secretary may grant a request for a 
waiver under this section if the Secretary determines that--
            ``(1) the State plan to provide health care coverage to its 
        residents provides coverage that is at least as comprehensive 
        as the coverage required under a qualified health benefits plan 
        offered through exchanges established under this title; and
            ``(2) the State plan to provide health care coverage to its 
        residents will lower the growth in health care spending, will 
        improve delivery system performance, will provide affordable 
        choices for its citizens, will expand protection against 
        excessive out-of-pocket spending, will provide coverage to the 
        same number of uninsured as the provisions of this title will 
        provide, and will not increase the Federal deficit.
    ``(c) Scope of Waiver.--
            ``(1) In general.--The Secretary shall determine the scope 
        of a waiver granted to a State under this section, including 
        which Federal laws and requirements will not apply to the State 
        under the waiver.
            ``(2) Limitation.--The Secretary may not waive under this 
        section any Federal law or requirement that is not within the 
        authority of the Secretary.
    ``(d) Determinations by Secretary.--
            ``(1) Time for determination.--The Secretary shall make a 
        determination under this section not later than 180 days after 
        the receipt of an application from a State under subsection 
        (a).
            ``(2) Effect of determination.--
                    ``(A) Granting of waivers.--If the Secretary 
                determines to grant a waiver under this section, the 
                Secretary shall notify the State involved of such 
                determination and the terms and effectiveness of such 
                waiver.
                    ``(B) Denial of waiver.--If the Secretary 
                determines a waiver should not be granted under this 
                section, the Secretary shall notify the State involved, 
                and the appropriate committees of Congress of such 
                determination and the reasons therefor.

``SEC. 2227. PROVISIONS RELATING TO OFFERING OF PLANS IN MORE THAN ONE 
              STATE.

    ``(a) Health Care Choice Compacts.--
            ``(1) In general.--The Secretary shall request the National 
        Association of Insurance Commissioners to, no later than July 
        1, 2012, develop model rules for the creation of health care 
        choice compacts under which 2 or more States may enter into an 
        agreement under which--
                    ``(A) 1 or more qualified health benefits plans 
                could be offered in the individual markets in all such 
                States but, except as provided in subparagraph (B), 
                only be subject to the laws and regulations of the 
                State in which the plan was written or issued;
                    ``(B) the offeror of any qualified health benefits 
                plan to which the compact applies--
                            ``(i) would continue to be subject to 
                        market conduct, unfair trade practices, network 
                        adequacy, and consumer protection standards, 
                        including addressing disputes as to the 
                        performance of the contract, of the State in 
                        which the purchaser resides;
                            ``(ii) would be required to be licensed in 
                        each State in which it offers the plan under 
                        the compact or to submit to the jurisdiction of 
                        each such State with regard to the standards 
                        described in clause (i) (including allowing 
                        access to records as if the insurer were 
                        licensed in the State); and
                            ``(iii) must clearly notify consumers that 
                        the policy may not be subject to all the laws 
                        and regulations of the State in which the 
                        purchaser resides.
        If the NAIC does not promulgate the model rules by July 1, 
        2012, the Secretary shall, not later than July 1, 2013, 
        establish a Federal standard implementing such rules.
            ``(2) State authority.--A State may not enter into an 
        agreement under this subsection unless the State enacts a law 
        after the date of the enactment of this title that specifically 
        authorizes the State to enter into such agreements.
            ``(3) Effective date.--A health care choice compact 
        described in paragraph (1) shall not take effect before January 
        1, 2015.
    ``(b) Authority for Nationwide Plans.--
            ``(1) In general.--Notwithstanding section 2225(c)(1), and 
        except as provided in paragraph (2), if an offeror of a 
        qualified health benefits plan in the individual or small group 
        market meets the requirements of this subsection--
                    ``(A) the offeror of the plan may offer the 
                qualified health benefits plan in more than 1 State; 
                and
                    ``(B) any State law mandating benefit coverage by a 
                health benefits plan shall not apply to the qualified 
                health benefits plan.
            ``(2) State opt-out.--A State may, by specific reference in 
        a law enacted after the date of enactment of this title, 
        provide that this subsection shall not apply to that State. 
        Such opt-out shall be effective until such time as the State by 
        law revokes it.
            ``(3) Plan requirements.--An offeror meets the requirements 
        of this subsection with respect to a qualified health benefits 
        plan if--
                    ``(A) the plan offers a benefits package that is 
                uniform in each State in which the plan is offered and 
                meets the requirements set forth in paragraph (3);
                    ``(B) the offeror is licensed in each State in 
                which it offers the plan and is subject in such State 
                to the standards and requirements described in the last 
                sentence of section 2225(c)(1);
                    ``(C) the offeror meets all requirements of this 
                title with respect to a qualified health benefits plan, 
                including the requirement to offer the silver and gold 
                levels of the plan in each exchange in the State for 
                the market in which the plan is offered; and
                    ``(D) the offeror determines the premiums for the 
                plan in any State on the basis of the ratings rules in 
                effect in that State for the ratings areas in which it 
                is offered.
            ``(4) Applicable regulations.--
                    ``(A) In general.--The Secretary shall request the 
                National Association of Insurance Commissioners to, no 
                later than 2012, develop model rules for the offering 
                of a qualified health benefits plans on a national 
                basis. Such rules shall establish standards for--
                            ``(i) the implementation of benefit 
                        categories, taking into account how each 
                        benefit is offered in a majority of States; and
                            ``(ii) harmonization between applicable 
                        State authorities of State insurance 
                        regulations relating to filing of forms and the 
                        filing of premium rates.
                If the NAIC does not promulgate the model rules by 
                December 31, 2012, the Secretary shall, not later than 
                December 31, 2013, establish a Federal standard 
                implementing such rules.
                    ``(B) State action.--Each State (other than a State 
                described in paragraph (2)) shall include the 
                provisions described in subparagraph (A) in the Model 
                Regulation, Federal standard, or State law or 
                regulation the State adopts and has in effect under 
                section 2225(a)(2).

``SEC. 2228. STATE FLEXIBILITY TO ESTABLISH BASIC HEALTH PROGRAMS FOR 
              LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR MEDICAID.

    ``(a) Establishment of Program.--
            ``(1) In general.--The Secretary shall establish a basic 
        health program meeting the requirements of this section under 
        which a State may enter into contracts to offer 1 or more 
        standard health plans providing at least an essential benefits 
        package described in section 2242 to eligible individuals in 
        lieu of offering such individuals coverage through an exchange 
        established under part B.
            ``(2) Certifications as to benefit coverage and costs.--
        Such program shall provide that a State may not establish a 
        basic health program under this section unless the State 
        establishes to the satisfaction of the Secretary, and the 
        Secretary certifies, that--
                    ``(A) in the case of an eligible individual 
                enrolled in a standard health plan offered through the 
                program, the State provides--
                            ``(i) that the amount of the monthly 
                        premium an eligible individual is required to 
                        pay for coverage under the standard health plan 
                        for the individual and the individual's 
                        dependents does not exceed the amount of the 
                        monthly premium that the eligible individual 
                        would have been required to pay if the 
                        individual had enrolled in the applicable 
                        second lowest cost silver plan (as defined in 
                        section 36B(b)(3)(B) of the Internal Revenue 
                        Code of 1986) offered to the individual through 
                        an exchange; and
                            ``(ii) that the cost-sharing an eligible 
                        individual is required to pay under the 
                        standard health plan does not exceed--
                                    ``(I) the cost-sharing required 
                                under a platinum plan in the case of an 
                                eligible individual with household 
                                income not in excess of 150 percent of 
                                the poverty line for the size of the 
                                family involved; and
                                    ``(II) the cost-sharing required 
                                under a gold plan in the case of an 
                                eligible individual; and
                    ``(B) the benefits provided under the standard 
                health plans offered through the program cover at least 
                benefits required under an essential benefits package 
                described in section 2242.
        For purposes of subparagraph (A)(i), the amount of the monthly 
        premium an individual is required to pay under either the 
        standard health plan or the applicable second lowest cost 
        silver plan shall be determined after reduction for any premium 
        credits and premium subsidies allowable with respect to either 
        plan.
    ``(b) Standard Health Plan.--In this section, the term `standard 
heath plan' means a health benefits plan that the State contracts with 
under this section--
            ``(1) under which the only individuals eligible to enroll 
        are eligible individuals;
            ``(2) that provides at least an essential benefits package 
        described in section 2242; and
            ``(3) in the case of a plan that provides health insurance 
        coverage offered by a health insurance issuer, that has a 
        medical loss ratio of at least 85 percent.
    ``(c) Contracting Process.--
            ``(1) In general.--A State basic health program shall 
        establish a competitive process for entering into contracts 
        with standard health plans under subsection (a), including 
        negotiation of premiums and cost-sharing and negotiation of 
        benefits in addition to those required by an essential benefits 
        package described in section 2242.
            ``(2) Specific items to be considered.--A State shall, as 
        part of its competitive process under paragraph (1), include at 
        least the following:
                    ``(A) Innovation.--Negotiation with offerors of a 
                standard health plan for the inclusion of innovative 
                features in the plan, including--
                            ``(i) care coordination and care management 
                        for enrollees, especially for those with 
                        chronic health conditions;
                            ``(ii) incentives for use of preventive 
                        services; and
                            ``(iii) the establishment of relationships 
                        between providers and patients that maximize 
                        patient involvement in health care decision-
                        making, including providing incentives for 
                        appropriate utilization under the plan.
                    ``(B) Health and resource differences.--
                Consideration of, and the making of suitable allowances 
                for, differences in health care needs of enrollees and 
                differences in local availability of, and access to, 
                health care providers. Nothing in this subparagraph 
                shall be construed as allowing discrimination on the 
                basis of pre-existing condition or other health status-
                related factors.
                    ``(C) Managed care.--Contracting with managed care 
                systems, or with systems that offer as many of the 
                attributes of managed care as are feasible in the local 
                health care market.
                    ``(D) Performance measures.--Establishing specific 
                performance measures and standards for offerors of 
                standard health plans that focus on quality of care and 
                improved health outcomes, requiring such plan to report 
                to the State with respect to the measures and 
                standards, and making the performance and quality 
                information available to enrollees in a useful form.
            ``(3) Enhanced availability.--
                    ``(A) Multiple plans.--A State shall, to the 
                maximum extent feasible, seek to make multiple standard 
                health plans available to eligible individuals within a 
                State to ensure individuals have a choice of such 
                plans.
                    ``(B) Regional compacts.--A State may negotiate a 
                regional compact with other States to include coverage 
                of eligible individuals in all such States in 
                agreements with offerors of standard health plans.
            ``(4) Coordination with other state programs.--A State 
        shall, to the maximum extent feasible, seek to coordinate the 
        administration of, and provision of benefits under, its program 
        under this section with the State medicaid program under title 
        XIX, the State child health plan under title XXI, and other 
        State-administered health programs to maximize the efficiency 
        of such programs and to improve the continuity of care.
    ``(d) Transfer of Funds to States.--
            ``(1) In general.--If the Secretary determines that a State 
        electing the application of this section meets the requirements 
        of the program established under subsection (a), the Secretary 
        shall transfer to the State for each fiscal year for which 1 or 
        more standard health plans are operating within the State the 
        amount determined under paragraph (3).
            ``(2) Use of funds.--A State shall establish a trust for 
        the deposit of the amounts received under paragraph (1) and 
        amounts in the trust fund shall only be used to reduce the 
        premiums and cost-sharing of, or to provide additional benefits 
        for, eligible individuals enrolled in standard health plans 
        within the State. Amounts in the trust fund, and expenditures 
        of such amounts, shall not be included in determining the 
        amount of any non-Federal funds for purposes of meeting any 
        matching or expenditure requirement of any federally-funded 
        program.
            ``(3) Amount of payment.--
                    ``(A) Secretarial determination.--
                            ``(i) In general.--The amount determined 
                        under this paragraph for any fiscal year is the 
                        amount the Secretary determines is equal to 85 
                        percent of the credits under section 36B of the 
                        Internal Revenue Code of 1986, and the cost-
                        sharing subsidies under section 2247, that 
                        would have been provided for the fiscal year to 
                        eligible individuals enrolled in standard 
                        health plans in the State if such eligible 
                        individuals were allowed to enroll in qualified 
                        health benefits plans through an exchange 
                        established under part B.
                            ``(ii) Specific requirements.--The 
                        Secretary shall make the determination under 
                        clause (i) on a per enrollee basis and shall 
                        take into account all relevant factors 
                        necessary to determine the value of the credits 
                        and subsidies that would have been provided to 
                        eligible individuals described in clause (i).
                    ``(B) Corrections.--The Secretary shall adjust the 
                payment for any fiscal year to reflect any error in the 
                determinations under subparagraph (A) for any preceding 
                fiscal year.
            ``(4) Application of abortion coverage requirements.--The 
        rules of section 2245 shall apply to a State basic health 
        program, and to standard health plans offered through such 
        program, in the same manner as such rules apply to qualified 
        basic health benefits plans.
    ``(e) Eligible Individual.--
            ``(1) In general.--In this section, the term `eligible 
        individual' means, with respect to any State, an individual--
                    ``(A) who a resident of the State who is not 
                eligible to enroll in the State's medicaid program 
                under title XIX for benefits that at a minimum consist 
                of the essential benefits package described in section 
                2242;
                    ``(B) whose household income exceeds 133 percent 
                but does not exceed 200 percent of the poverty line for 
                the size of the family involved;
                    ``(C) who is not eligible for essential health 
                benefits coverage (as defined in section 5000A(f)) or 
                is eligible for an employer-sponsored plan that is not 
                affordable coverage (as determined under section 
                5000A(e)(2)); and
                    ``(D) who has not attained age 65 as of the 
                beginning of the plan year.
        Such term shall not include any individual who is not eligible 
        under section 2232(c) to be covered by a qualified health 
        benefits plan offered through an exchange.
            ``(2) Eligible individuals may not use exchange.--An 
        eligible individual shall not be treated as a qualified 
        individual under section 2223 eligible for enrollment in a 
        qualified health benefits plan offered through an exchange 
        established under part B.
    ``(f) Secretarial Oversight.--The Secretary shall each year conduct 
a review of each State program to ensure compliance with the 
requirements of this section, including ensuring that the State program 
meets--
            ``(1) eligibility verification requirements for 
        participation in the program;
            ``(2) the requirements for use of Federal funds received by 
        the program; and
            ``(3) the quality and performance standards under this 
        section.
    ``(g) Standard Health Plan Offerors.--A State may provide that 
persons eligible to offer standard health plans under a basic health 
program established under this section may include a licensed health 
maintenance organization, a licensed health insurance insurer, or a 
network of health care providers established to offer services under 
the program.
    ``(h) Definitions.--Any term used in this section which is also 
used in section 36B of the Internal Revenue Code of 1986 shall have the 
meaning given such term by such section.

                ``Subpart 5--Other Definitions and Rules

``SEC. 2230. OTHER DEFINITIONS AND RULES.

    ``(a) Employers.--In this title:
            ``(1) Large employer.--The term `large employer' means, in 
        connection with a group health plan with respect to a calendar 
        year and a plan year, an employer who employed an average of at 
        least 101 employees on business days during the preceding 
        calendar year and who employs at least 1 employee on the first 
        day of the plan year.
            ``(2) Small employer.--The term `small employer' means, in 
        connection with a group health plan with respect to a calendar 
        year and a plan year, an employer who employed an average of at 
        least 1 but not more than 100 employees on business days during 
        the preceding calendar year and who employs at least 1 employee 
        on the first day of the plan year. Unless an employer elects 
        otherwise, if an employer is treated as a small employer for 
        any plan year to which this title applies, then such employer 
        shall continue to be treated as a small employer for any 
        subsequent plan year even if the number of employees exceeds 
        the number in effect under this subparagraph.
            ``(3) State option to treat 50 employees as small.--In the 
        case of plan years beginning before January 1, 2015, a State 
        may elect to apply this subsection by substituting `51 
        employees' for `101 employees' in paragraph (1) and by 
        substituting `50 employees' for `100 employees' in paragraph 
        (2).
            ``(4) Rules for determining employer size.--For purposes of 
        this subsection--
                    ``(A) Application of aggregation rule for 
                employers.--All persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                of the Internal Revenue Code of 1986 shall be treated 
                as 1 employer.
                    ``(B) Employers not in existence in preceding 
                year.--In the case of an employer which was not in 
                existence throughout the preceding calendar year, the 
                determination of whether such employer is a small or 
                large employer shall be based on the average number of 
                employees that it is reasonably expected such employer 
                will employ on business days in the current calendar 
                year.
                    ``(C) Predecessors.--Any reference in this 
                subsection to an employer shall include a reference to 
                any predecessor of such employer.
    ``(b) Terms Relating to Plans.--In this title:
            ``(1) Plan sponsor.--The term `plan sponsor' has the 
        meaning given such term in section 3(16)(B) of the Employee 
        Retirement Income Security Act of 1974.
            ``(2) Plan year.--The term `plan year' means--
                    ``(A) with respect to a group health plan, a plan 
                year as specified under such plan; or
                    ``(B) with respect to another health benefits plan, 
                the calendar year, the 12-month period beginning on 
                July 1 of each year, or such other 12-month period as 
                may be specified by the Secretary.''.

             Subtitle B--Exchanges and Consumer Assistance

SEC. 1101. ESTABLISHMENT OF QUALIFIED HEALTH BENEFITS PLAN EXCHANGES.

    (a) In General.--Title XXII of the Social Security Act, as added by 
section 1001, is amended by adding at the end the following:

               ``PART B--EXCHANGE AND CONSUMER ASSISTANCE

``Subpart 1--Individuals and Small Employers Offered Affordable Choices

``SEC. 2231. RIGHTS AND RESPONSIBILITIES REGARDING CHOICE OF COVERAGE 
              THROUGH EXCHANGE.

    ``(a) Right to Enroll Through an Exchange.--
            ``(1) Qualified individuals.--Each qualified individual 
        shall have the choice to enroll or to not enroll in a qualified 
        health benefits plan offered through an exchange that is 
        established under this title, that covers the State in which 
        the individual resides, and that covers qualified health 
        benefits plans in the individual market.
            ``(2) Qualified small employers.--
                    ``(A) In general.--In the case of a qualified small 
                employer--
                            ``(i) such employer may elect to offer to 
                        its employees qualified health benefits plans 
                        offered through an exchange that is established 
                        under this title, that covers the State in 
                        which the employees resides, and that covers 
                        qualified health benefits plans in the small 
                        group market; and
                            ``(ii) each employee of such employer shall 
                        have the choice to enroll or to not enroll in a 
                        qualified health benefits plan offered through 
                        such exchange.
                If a qualified small employer elects to limit the 
                qualified health benefits plans or levels of coverage 
                under part C that employees may enroll in through such 
                exchange, employees may only choose to enroll in those 
                plans or plans in those levels.
                    ``(B) Self-insured plans.--If a qualified small 
                employer offers its employees coverage under a self-
                insured health benefits plan, the employer may not 
                offer its employees qualified health benefits plans 
                through an exchange.
            ``(3) Members of congress and congressional staff required 
        to participate in exchange.--
                    ``(A) In general.--Notwithstanding chapter 89 of 
                title 5, United States Code, or any provision of this 
                title--
                            ``(i) each Member of Congress and 
                        Congressional employee shall be treated as a 
                        qualified individual entitled to the right 
                        under this paragraph to enroll in a qualified 
                        health benefits plan in the individual market 
                        offered through an exchange in the State in 
                        which the Member or employee resides; and
                            ``(ii) any employer contribution under such 
                        chapter on behalf of the Member or employee may 
                        be paid only to the offeror of a qualified 
                        health benefits plan in which the Member or 
                        employee enrolled in through such exchange and 
                        not to the offeror of a plan offered through 
                        the Federal employees health benefit program 
                        under such chapter.
                    ``(B) Payments by federal government.--The 
                Secretary, in consultation with the Director of the 
                Office of Personnel Management, shall establish 
                procedures under which--
                            ``(i) the employer contributions on behalf 
                        of a Member or Congressional employee are 
                        actuarially adjusted for age; and
                            ``(ii) the employer contributions may be 
                        made directly to an exchange for payment to an 
                        offeror.
                    ``(C) Congressional employee.--In this paragraph, 
                the term `Congressional employee' means an employee 
                whose pay is disbursed by the Secretary of the Senate 
                or the Clerk of the House of Representatives.
    ``(b) Responsibility of Offerors of Qualified Health Benefits 
Plans.--
            ``(1) All plans must be offered through an exchange.--An 
        offeror of a qualified health benefits plan in a State--
                    ``(A) shall offer the plan through the exchange 
                established by the State for the market in which the 
                plan is being offered; and
                    ``(B) may offer such plan outside of an exchange.
            ``(2) Offerors must offer plans in silver and gold plans.--
        An offeror of a qualified health benefits plan in the 
        individual or small group market within a State--
                    ``(A) shall offer within that market at least one 
                qualified health benefits plan in the silver coverage 
                level and at least one such plan in the gold coverage 
                level; and
                    ``(B) may offer 1 or more qualified health benefits 
                plan in the bronze and platinum coverage levels, a 
                catastrophic plan described in section 2243(c), or a 
                child-only plan described in section 2243(d).
    ``(c) Responsibility of Exchanges.--
            ``(1) In general.--Each exchange offering plans in the 
        individual or small group market within a State shall offer all 
        qualified health benefits plans in the State that are licensed 
        by the State to be offered in that market.
            ``(2) Offering of stand-alone dental benefits.--
                    ``(A) In general.--Each exchange within a State 
                shall allow an offeror of a health benefits plan that 
                only provides limited scope dental benefits meeting the 
                requirements of section 9832(c)(2)(A) of the Internal 
                Revenue Code of 1986 to offer the plan through the 
                exchange (either separately or in conjunction with a 
                qualified health benefits plan) if the plan provides 
                pediatric dental benefits meeting the requirements of 
                2242(b)(11) for individuals who have not attained the 
                age of 21.
                    ``(B) Eligibility for credit and subsidy.--If an 
                individual enrolls in both a qualified health benefits 
                plan and a plan described in subparagraph (A) for any 
                plan year, the portion of the premium for the plan 
                described in subparagraph (A) that (under regulations 
                prescribed by the Secretary) is properly allocable to 
                individuals covered by the plan who have not attained 
                the age of 21 before the beginning of the plan year 
                shall be treated as a premium payable for a qualified 
                health benefits plan for purposes of determining the 
                amount of the premium credit under section 36B of such 
                Code and cost-sharing subsidies under section 2237 with 
                respect to the plan year.
    ``(d) Enrollment Through Agents or Brokers.--The Secretary shall 
establish procedures under which a State is required to allow agents or 
brokers--
            ``(1) to enroll individuals in any qualified health 
        benefits plans in the individual or small group market as soon 
        as the plan is offered through an exchange in the State; and
            ``(2) to assist individuals in applying for premium credits 
        and cost-sharing subsidies for plans sold through an exchange.

``SEC. 2232. QUALIFIED INDIVIDUALS AND SMALL EMPLOYERS; ACCESS LIMITED 
              TO CITIZENS AND LAWFUL RESIDENTS.

    ``(a) Qualified Individuals.--In this title:
            ``(1) In general.--The term `qualified individual' means, 
        with respect to an exchange, an individual who--
                    ``(A) is seeking to enroll in a qualified health 
                benefits plan in the individual market offered through 
                the exchange; and
                    ``(B) resides in the State that established the 
                exchange.
            ``(2) Incarcerated individuals excluded.--An individual 
        shall not be treated as a qualified individual if, at the time 
        of enrollment, the individual is incarcerated, other than 
        incarceration pending the disposition of charges.
    ``(b) Qualified Small Employer.--In this title, the term `qualified 
small employer' means an employer that is a small employer that elects 
to make all full-time employees of such employer eligible for 1 or more 
qualified health benefits plans offered through an exchange established 
under this subtitle that offers qualified health benefits plans in the 
small group market.
    ``(c) Access Limited to Lawful Residents.--If an individual is not, 
or is not reasonably expected to be for the entire plan year for which 
enrollment is sought, a citizen or national of the United States, an 
alien lawfully admitted to the United States for permanent residence, 
or an alien lawfully present in the United States--
            ``(1) the individual shall not be treated as a qualified 
        individual and may not be covered under a qualified health 
        benefits plan in the individual market that is offered through 
        an exchange; and
            ``(2) if the individual is an employee of a qualified small 
        employer offering employees the opportunity to enroll in a 
        qualified health benefits plan in the small group market 
        through an exchange (or an individual bearing a relationship to 
        such an employee that entitles such individual to coverage 
        under such plan), the individual may not be covered under such 
        plan.

                ``Subpart 2--Establishment of Exchanges

``SEC. 2235. ESTABLISHMENT OF EXCHANGES BY STATES.

    ``(a) In General.--Each State shall, not later than July 1, 2013, 
establish --
            ``(1) an exchange for the State that is designed to 
        facilitate the enrollment of qualified individuals in qualified 
        health benefits plans offered in the individual market in the 
        State; and
            ``(2) a Small Business Health Options Program (in this 
        title referred to as a `SHOP exchange') that is designed to 
        assist qualified small employers in facilitating the enrollment 
        of their employees in qualified health benefits plans offered 
        in either the individual or the small group market in the 
        State.
    ``(b) State Flexibility.--
            ``(1) Merger of individual and shop exchanges.--A State may 
        elect to provide only one exchange in the State for providing 
        both exchange and SHOP exchange services to both qualified 
        individuals and qualified small employers, but only if the 
        exchange has separate resources to assist individuals and 
        employers.
            ``(2) Regional exchanges.--An exchange or SHOP exchange may 
        operate in more than 1 State if--
                    ``(A) each of the States agrees to the operation of 
                the exchange in that State; and
                    ``(B) the Secretary approves of the operation of 
                the exchange in all such States.
            ``(3) Authority to contract for exchange services.--
                    ``(A) Contract with sub-exchange.--Subject to such 
                conditions and restrictions as the Secretary, in 
                consultation with the Secretary of the Treasury, may 
                prescribe under sections 2238 and 2248--
                            ``(i) In general.--A State may elect to 
                        authorize an exchange established by the State 
                        under this title to contract with an eligible 
                        entity to carry out 1 or more responsibilities 
                        of the exchange, including marketing and sale 
                        of qualified health benefits plans offered by 
                        the exchange, enrollment activities, broker 
                        relations, customer service, customer 
                        education, premium billing and collection, 
                        member advocacy with qualified health benefits 
                        plans, maintaining call center support, and 
                        performing the duties of the exchange under 
                        section 2238 in determining eligibility to 
                        participate in the exchange and to receive any 
                        credit or subsidy. An eligible entity may 
                        charge an additional fee to be used to pay the 
                        administrative and operational expenses of the 
                        entity.
                            ``(ii) Eligible entity.--In this 
                        subparagraph, the term `eligible entity' means 
                        a person--
                                    ``(I) incorporated under, and 
                                subject to the laws of, 1 or more 
                                States;
                                    ``(II) that has demonstrated 
                                experience on a State or regional basis 
                                in the individual and small group 
                                health insurance and benefits coverage; 
                                and
                                    ``(III) that is not a health 
                                insurance issuer or that is treated 
                                under subsection (a) or (b) of section 
                                52 as a member of the same controlled 
                                group of corporations (or under common 
                                control with) a health insurance 
                                issuer.
                    ``(B) Delegation to state medicaid agency.--A State 
                may elect to authorize an exchange established by the 
                State under this title to enter into an agreement with 
                the State medicaid agency under title XIX to carry out 
                the responsibilities of the exchange under this section 
                in establishing the eligibility of individuals to 
                participate in the exchange and to receive the premium 
                credit under section 36B of the Internal Revenue Code 
                of 1986 and the cost-sharing subsidy under section 
                2247. An exchange may enter into an agreement under 
                this subparagraph only if the agreement meets 
                requirements promulgated by the Secretary (after 
                consultation with the Secretary of the Treasury) 
                ensuring that the agreement lowers overall 
                administrative costs and reduces the likelihood of 
                eligibility errors and disruptions in coverage.
    ``(c) Establishment of Broker Rate Schedules.--Each State shall 
provide for the establishment of rate schedules for broker commissions 
paid by health benefits plans offered through an exchange.
    ``(d) Offering of Plans in Large Group Market.--Beginning in 2017, 
each State may allow offerors of health benefits plans in the large 
group market in the State to offer the plans through an exchange. 
Nothing in this subsection shall be construed as requiring an offeror 
to offer such plans through an exchange.
    ``(e) Interim Exchanges Before Qualified Plans.--
            ``(1) In general.--Each State shall, as soon as practicable 
        after the date of enactment of this Act, establish an exchange 
        through which enrollment in eligible health insurance coverage 
        is offered for coverage during the period beginning January 1, 
        2010, and ending June 30, 2013. Each State may use the database 
        established under paragraph (2)(C)(ii) in the operation of the 
        exchange.
            ``(2) Eligible health insurance coverage.--In this 
        subsection:
                    ``(A) In general.--The term `eligible health 
                insurance coverage' means, with respect to any State, 
                any health insurance coverage meeting the requirements 
                of section 2244 which is offered--
                            ``(i) by an issuer who is licensed to offer 
                        such coverage in that State; and
                            ``(ii) in the individual or small group 
                        markets within the State.
                    ``(B) Exception for mini-medical plans.--Such term 
                shall not include any health insurance coverage which, 
                as determined under regulations prescribed by the 
                Secretary, offers limited benefits or has a low annual 
                limitation on the amount of benefits provided.
                    ``(C) Administration.--
                            ``(i) In general.--The Secretary shall 
                        provide technical assistance to each State in 
                        establishing exchanges under this subsection.
                            ``(ii) Database of plan offerings.--The 
                        Secretary, either directly or by grant or 
                        contract with a private entity, shall establish 
                        and maintain a database of health insurance 
                        coverage in the individual and small group 
                        markets. The Secretary shall ensure that 
                        individuals and small employers are able to 
                        access the information in the database that is 
                        specific to the State in which the individuals 
                        and employees reside.

``SEC. 2236. FUNCTIONS PERFORMED BY SECRETARY, STATES, AND EXCHANGES.

    ``(a) Agreements to Perform Functions.--The Secretary shall enter 
into an agreement with each State (in this section referred to as the 
`agreement') setting forth which of the functions described in this 
section with respect to an exchange shall be performed by the 
Secretary, the State, or the exchange.
    ``(b) Certification of Plans.--The agreement shall provide for the 
State to establish procedures for the certification, recertification, 
and decertification of a health benefits plan as a qualified health 
benefits plan that meets the requirements of this title for offering 
the plan through exchanges within the State.
    ``(c) Outreach and Eligibility.--The agreement shall provide for 
the conduct of the following activities:
            ``(1) Outreach.--
                    ``(A) In general.--The establishment and carrying 
                out of a plan to conduct outreach activities to inform 
                and educate individuals and employers about the 
                exchange, the annual open enrollment periods described 
                in subsection (d)(2), and options for qualified health 
                benefits plans offered through the exchange.
                    ``(B) Call centers.--The establishment and 
                maintenance of call centers to provide information to, 
                and answer questions from, individuals seeking to 
                enroll in qualified health benefit plans through an 
                exchange, including providing multilingual assistance 
                and mailing of relevant information to individuals 
                based on their inquiry and zip code.
                    ``(C) Internet portals.--The development of a model 
                template for an Internet portal to be used to direct 
                qualified individuals and qualified small employers to 
                qualified health benefits plans, to assist individuals 
                and employers in determining whether they are eligible 
                to participate in an exchange or eligible for a premium 
                credit or cost-sharing subsidy, and to present 
                standardized information regarding qualified health 
                benefits plans offered through an exchange to enable 
                easier consumer choice. Such template shall include 
                with respect to each qualified health benefits plan 
                offered through the exchange in each rating area access 
                to the uniform outline of coverage the plan is required 
                to provide under section 2205 and to a copy of the 
                plan's policy.
                    ``(D) Rating system.--The establishment of a rating 
                system that would rate qualified health benefits plans 
                offered through an exchange on the basis of the 
                relative quality and price of plans in the same benefit 
                level. The exchange shall include the quality rating in 
                the information provided to individuals and employers 
                through the Internet portal established under 
                subparagraph (C).
            ``(2) Eligibility.--Subject to section 2238, the making of 
        timely determinations as to whether--
                    ``(A) individuals or employers are qualified 
                individuals or qualified small employers eligible to 
                participate in the exchange; and
                    ``(B) an individual is disqualified from 
                participation in the exchange or from receiving any 
                premium credit or cost-sharing subsidy because the 
                individual is not, or is not reasonably expected to be 
                for the entire plan year for which enrollment is 
                sought, a citizen or national of the United States, an 
                alien lawfully admitted to the United States for 
                permanent residence, or an alien lawfully present in 
                the United States.
    ``(d) Enrollment.--The agreement shall provide for the 
establishment and carrying out of an enrollment process which--
            ``(1) provides for enrollment in person, by mail, by 
        telephone, or electronically, including--
                    ``(A) through enrollment in local hospitals and 
                schools, State motor vehicle offices, local Social 
                Security offices, locations operated by Indian tribes 
                and tribal organizations, and any other accessible 
                locations specified by the exchange; and
                    ``(B) through use of the call center and Web portal 
                established under subsection (c)(1);
            ``(2) provides for--
                    ``(A) an initial open enrollment period from March 
                1, 2013, through May 31, 2013;
                    ``(B) annual open enrollment periods from March 1 
                through May 31 of subsequent calendar years;
                    ``(C) special enrollment periods specified in 
                section 9801 of the Internal Revenue Code of 1986 and 
                other special enrollment periods under circumstances 
                similar to such periods under part D of title XVIII; 
                and
                    ``(D) special monthly enrollment periods for 
                Indians (as defined in section 4 of the Indian Health 
                Care Improvement Act).
            ``(3) subject to section 2239--
                    ``(A) establishes a uniform enrollment form that 
                qualified individuals and qualified small businesses 
                may use (either electronically or on paper) in 
                enrolling in qualified health benefits plans offered 
                through an exchange, and that takes into account 
                criteria that the National Association of Insurance 
                Commissioners develops and submits to the Secretary; 
                and
                    ``(B) informs individuals of eligibility 
                requirements for the medicaid program under title XIX, 
                the CHIP program under title XXI, or any applicable 
                State or local public program and refers individuals to 
                such programs if a determination is made that the 
                individuals are so eligible;
            ``(4) establishes standardized marketing requirements that 
        are based on the standards used for Medicare Advantage plans 
        and ensures that marketing practices with respect to qualified 
        health benefits plans offered through the exchange meet the 
        requirements; and
            ``(5) provides for a standardized format for presenting 
        health benefits plan options in the exchange, including use of 
        the uniform outline of coverage established under section 1503 
        of the America's Healthy Future Act of 2009.
    ``(e) Eligibility for Credit and Subsidy.--The agreement shall 
provide for the establishment and use of a calculator to determine the 
actual cost of coverage after application of any premium credit or 
cost-sharing subsidy and the carrying out of responsibilities under 
section 2248 with respect to the advance determination and payment of 
such credits or subsidies.
    ``(f) Certification of Exemption From Individual Responsibility 
Excise Tax .--Subject to section 2238, the agreement shall establish 
procedures for--
            ``(1) granting a certification attesting that, for purposes 
        of the individual responsibility excise tax under section 5000A 
        of the Internal Revenue Code of 1986, an individual is exempt 
        from the individual requirement or from the tax imposed by such 
        section because--
                    ``(A) there is no affordable qualified health 
                benefits plan available through the exchange, or the 
                individual's employer, covering the individual; or
                    ``(B) the individual meets the requirements for any 
                other such exemption from the individual responsibility 
                requirement or tax; and
            ``(2) transferring to the Secretary of the Treasury or the 
        Secretary's delegate a list of the individuals who are so 
        exempt.
The Secretary shall establish the period for which any certification 
under this subsection is in effect.

``SEC. 2237. DUTIES OF THE SECRETARY TO FACILITATE EXCHANGES.

    ``(a) Credit and Subsidy Determinations.--The Secretary and the 
Secretary of the Treasury shall carry out the responsibilities under 
section 2248 (relating to advance determination and payment of premium 
credit and cost-sharing subsidies) that are delegated specifically to 
the Secretary and the Secretary of the Treasury.
    ``(b) SHOP Exchange Assistance.--The Secretary shall designate an 
office within the Department of Health and Human Services to provide 
technical assistance to States to facilitate the participation of 
qualified small businesses in SHOP exchanges.
    ``(c) Funding of Start-up Costs.--
            ``(1) In general.--The Secretary shall pay to each State 
        the amount the Secretary reasonably estimates to be the 
        unreimbursed start-up costs for any exchange or SHOP exchange 
        established within a State. The Secretary shall make separate 
        payments for the start-up costs of the interim and permanent 
        exchanges.
            ``(2) Operational costs.--No payments shall be made under 
        this subsection for any operational costs of an exchange after 
        the initial start-up is completed but an exchange may assess 
        each qualified health benefits plan offered through the 
        exchange its proportional share of such costs.

``SEC. 2238. PROCEDURES FOR DETERMINING ELIGIBILITY FOR EXCHANGE 
              PARTICIPATION, PREMIUM CREDITS AND COST-SHARING 
              SUBSIDIES, AND INDIVIDUAL RESPONSIBILITY EXEMPTIONS.

    ``(a) In General.--The Secretary shall establish a program meeting 
the requirements of this section for determining--
            ``(1) whether an individual who is to be covered by a 
        qualified health benefits plan offered through an exchange, or 
        who is claiming a premium credit or cost-sharing subsidy, meets 
        the requirements of sections 2236(c)(2)(B) and 2247(e) of this 
        title and section 36B(e) of the Internal Revenue Code of 1986 
        that the individual be a citizen or national of the United 
        States, an alien lawfully admitted to the United States for 
        permanent residence, or an alien lawfully present in the United 
        States;
            ``(2) in the case of an individual claiming a premium 
        credit or cost-sharing subsidy under section 36B of such Code 
        or section 2247--
                    ``(A) whether the individual meets the income and 
                coverage requirements of such sections; and
                    ``(B) the amount of the credit or subsidy;
            ``(3) whether an individual's coverage under an employer-
        sponsored health benefits plan is treated as unaffordable under 
        sections 36B(c)(2)(C), 4980H(c)(2), and 5000A(e)(2); and
            ``(4) whether to grant a certification under section 
        2237(f) attesting that, for purposes of the individual 
        responsibility excise tax under section 5000A of the Internal 
        Revenue Code of 1986, an individual is entitled to an exemption 
        from either the individual responsibility requirement or the 
        tax imposed by such section.
    ``(b) Information Required to Be Provided by Applicants.--
            ``(1) In general.--An applicant for enrollment in a 
        qualified health benefits plan offered through an exchange 
        shall provide--
                    ``(A) the name, address, and date of birth of each 
                individual who is to be covered by the plan (in this 
                subsection referred to as an `enrollee'); and
                    ``(B) the information required by any of the 
                following paragraphs that is applicable to an enrollee.
            ``(2) Citizenship or immigration status.--The following 
        information shall be provided with respect to every enrollee:
                    ``(A) In the case of an enrollee whose eligibility 
                is based on an attestation of citizenship of the 
                enrollee, the enrollee's social security number.
                    ``(B) In the case of an individual whose 
                eligibility is based on an attestation of the 
                enrollee's immigration status, the enrollee's social 
                security number (if applicable) and such identifying 
                information with respect to the enrollee's immigration 
                status as the Secretary, after consultation with the 
                Secretary of Homeland Security, determines appropriate.
            ``(3) Eligibility and amount of credit or subsidy.--In the 
        case of an enrollee with respect to whom a premium credit or 
        cost-sharing subsidy under section 36B of such Code or section 
        2247 is being claimed, the following information:
                    ``(A) Information regarding income and family 
                size.--The information described in section 6103(l)(21) 
                for the taxable year ending with or within the second 
                calendar year preceding the calendar year in which the 
                plan year begins.
                    ``(B) Changes in circumstances.--The information 
                described in section 2248(b)(2), including information 
                with respect to individuals who were not required to 
                file an income tax return for the taxable year 
                described in subparagraph (A) or individuals who 
                experienced changes in marital status or family size or 
                significant reductions in income.
            ``(4) Employer-sponsored coverage.--In the case of an 
        enrollee with respect to whom eligibility for a premium credit 
        under section 36B of such Code or cost-sharing subsidy under 
        section 2247, is being established on the basis that the 
        enrollee's (or related individual's) employer is not treated 
        under section 36B(c)(2)(C) of such Code as providing essential 
        benefits coverage or affordable essential benefits coverage, 
        the following information:
                    ``(A) The name, address, and employer 
                identification number (if available) of the employer.
                    ``(B) Whether the enrollee or individual is a full-
                time employee and whether the employer provides such 
                essential benefits coverage.
                    ``(C) If the employer provides such essential 
                benefits coverage, the lowest cost option for the 
                enrollee's or individual's enrollment status and the 
                enrollee's or individual's required contribution (as 
                defined in section 5000A(e)(2) of such Code) under the 
                employer-sponsored plan.
                    ``(D) If an enrollee claims an employer's essential 
                benefits coverage is unaffordable, the information 
                described in paragraph (3).
            ``(5) Exemptions from individual responsibility 
        requirements.--In the case of an individual who is seeking an 
        exemption certificate under section 2237(f) from any 
        requirement or tax imposed by section 5000A, the following 
        information:
                    ``(A) In the case of an individual seeking 
                exemption based on the individual's status as a member 
                of an exempt religious sect or division, as a member of 
                a health care sharing ministry, as an Indian, or as an 
                individual eligible for a hardship exemption, such 
                information as the Secretary shall prescribe.
                    ``(B) In the case of an individual seeking 
                exemption based on the lack of affordable coverage or 
                the individual's status as a taxpayer with household 
                income less than 100 percent of the poverty line, the 
                information described in paragraphs (3) and (4), as 
                applicable.
    ``(c) Verification of Information Contained in Records of Specific 
Federal Officials.--
            ``(1) Information transferred to secretary.--An exchange 
        shall submit the information provided by an applicant under 
        subsection (b) to the Secretary for verification in accordance 
        with the requirements of this subsection and subsection (d).
            ``(2) Citizenship or immigration status.--
                    ``(A) Commissioner of social security.--The 
                Secretary shall submit to the Commissioner of Social 
                Security the following information for a determination 
                as to whether the information provided is consistent 
                with the information in the records of the 
                Commissioner:
                            ``(i) The name, date of birth, and social 
                        security number of each individual for whom 
                        such information was provided under subsection 
                        (b)(2).
                            ``(ii) The attestation of an individual 
                        that the individual is a citizen.
                    ``(B) Secretary of homeland security.--
                            ``(i) In general.--In the case of an 
                        individual--
                                    ``(I) who attests that the 
                                individual is an alien lawfully 
                                admitted to the United States for 
                                permanent residence or an alien 
                                lawfully present in the United States; 
                                or
                                    ``(II) who attests that the 
                                individual is a citizen but with 
                                respect to whom the Commissioner of 
                                Social Security has notified the 
                                Secretary under subsection (e)(3) that 
                                the attestation is inconsistent with 
                                information in the records maintained 
                                by the Commissioner;
                        the Secretary shall submit to the Secretary of 
                        Homeland Security the information described in 
                        clause (ii) for a determination as to whether 
                        the information provided is consistent with the 
                        information in the records of the Secretary of 
                        Homeland Security.
                            ``(ii) Information.--The information 
                        described in clause (ii) is the following:
                                    ``(I) The name, date of birth, and 
                                any identifying information with 
                                respect to the individual's immigration 
                                status provided under subsection 
                                (b)(2).
                                    ``(II) The attestation that the 
                                individual is an alien lawfully 
                                admitted to the United States for 
                                permanent residence or an alien 
                                lawfully present in the United States 
                                or in the case of an individual 
                                described in clause (i)(II), the 
                                attestation that the individual is a 
                                citizen.
            ``(3) Eligibility for credit and subsidy.--The Secretary 
        shall submit the information described in subsection (b)(3)(A) 
        provided under paragraph (3), (4), or (5) of subsection (b) to 
        the Secretary of the Treasury for verification of household 
        income and family size for purposes of eligibility.
            ``(4) Method.--The Secretary, in consultation with the 
        Secretary of the Treasury, the Secretary of Homeland Security, 
        and the Commissioner of Social Security, shall provide that 
        verifications and determinations under this subsection shall be 
        done--
                    ``(A) through use of an on-line system or otherwise 
                for the electronic submission of, and response to, the 
                information submitted under this subsection with 
                respect to an applicant; or
                    ``(B) by determining the consistency of the 
                information submitted with the information maintained 
                in the records of the Secretary of the Treasury, the 
                Secretary of Homeland Security, or the Commissioner of 
                Social Security through such other method as is 
                approved by the Secretary.
    ``(d) Verification by Secretary.--In the case of information 
provided under subsection (b) that is not subject to verification under 
subsection (c), the Secretary shall verify the accuracy of such 
information in such manner as the Secretary determines appropriate, 
including delegating responsibility for verification to the exchange.
    ``(e) Actions Relating to Verification.--
            ``(1) In general.--Each person to whom the Secretary 
        provided information under subsection (c) shall report to the 
        Secretary under the method established under subsection (c)(4) 
        the results of its verification and the Secretary shall notify 
        the exchange of such results. Each person to whom the Secretary 
        provided information under subsection (d) shall report to the 
        Secretary in such manner as the Secretary determines 
        appropriate.
            ``(2) Verification.--
                    ``(A) Eligibility for enrollment and subsidies.--If 
                information provided by an applicant under paragraphs 
                (1), (2), (3), and (4) of subsection (b) is verified 
                under subsections (c) and (d)--
                            ``(i) the individual's eligibility to 
                        enroll through the exchange and to apply for 
                        premium credits and cost-sharing subsidies 
                        shall be satisfied; and
                            ``(ii) the Secretary shall, if applicable, 
                        notify the Secretary of the Treasury under 
                        section 2248(c) of the amount of any advance 
                        payment to be made.
                    ``(B) Exemption from individual responsibility.--If 
                information provided by an applicant under subsection 
                (b)(5) is verified under subsections (c) and (d), the 
                Secretary shall issue the certification of exemption 
                described in section 2236(f).
            ``(3) Inconsistencies.--If the information provided by an 
        applicant is inconsistent with information in the records 
        maintained by persons under subsection (c) or is not verified 
        under subsection (d), the Secretary shall notify the exchange 
        and the exchange shall take the following actions:
                    ``(A) Reasonable effort.--The exchange shall make a 
                reasonable effort to identify and address the causes of 
                such inconsistency, including through typographical or 
                other clerical errors, by contacting the applicant to 
                confirm the accuracy of the information, and by taking 
                such additional actions as the Secretary, through 
                regulation or other guidance, may identify.
                    ``(B) Notice and opportunity to correct.--In the 
                case the inconsistency or inability to verify is not 
                resolved under subparagraph (A), the exchange shall--
                            ``(i) notify the applicant of such fact;
                            ``(ii) provide the applicant with a 
                        reasonable period from the date on which the 
                        notice required under clause (i) is received by 
                        the applicant to either present satisfactory 
                        documentary evidence or resolve the 
                        inconsistency with the person verifying the 
                        information under subsection (c).
            ``(4) Specific actions.--
                    ``(A) Citizenship or immigration status.--If an 
                inconsistency involving citizenship or immigration 
                status with respect to any enrollee is unresolved under 
                this subsection, the exchange shall notify the 
                applicant that the enrollee is not eligible to 
                participate in the exchange.
                    ``(B) Eligibility or amount of credit or subsidy.--
                If an inconsistency involving the eligibility for, or 
                amount of, any credit or subsidy is unresolved under 
                this subsection, the exchange shall notify the 
                applicant of the amount (if any) of the credit or 
                subsidy.
                    ``(C) Employer affordability.--If the Secretary 
                notifies an exchange that an enrollee is eligible for a 
                premium credit under section 36B of such Code or cost-
                sharing subsidy under section 2247 because the 
                enrollee's (or related individual's) employer does not 
                provide essential benefits coverage through an 
                employer-sponsored plan or that the employer does 
                provide that coverage but it is not affordable 
                coverage, the exchange shall notify the employer of 
                such fact and that the employer may be liable for the 
                tax imposed by section 4980H with respect to an 
                employee.
                    ``(D) Exemption.--In any case where the 
                inconsistency involving, or inability to verify, 
                information provided under subsection (b)(5) is not 
                resolved, the exchange shall notify an applicant that 
                no certification of exemption from any requirement or 
                tax under section 5000A will be issued.
                    ``(E) Appeals process.--The exchange shall also 
                notify each person receiving notice under this 
                paragraph of the appeals processes established under 
                subsection (f).
    ``(f) Appeals and Redeterminations.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of the Treasury, the Secretary of Homeland Security, 
        and the Commissioner of Social Security, shall establish 
        procedures by which the Secretary or one of such other Federal 
        officers--
                    ``(A) hears and makes decisions with respect to 
                appeals of any determination under subsection (c); and
                    ``(B) redetermines eligibility on a periodic basis 
                in appropriate circumstances.
            ``(2) Employer liability.--The Secretary shall establish a 
        separate appeals process for employers who are notified under 
        subsection (e)(4)(C) that the employer may be liable for the 
        tax imposed by section 4980H with respect to an employee 
        because of a determination that the employer does not provide 
        essential benefits coverage through an employer-sponsored plan 
        or that the employer does provide that coverage but it is not 
        affordable coverage with respect to an employee. Such process 
        shall provide an employer the opportunity to--
                    ``(A) present information to the exchange for 
                review of the determination either by the exchange or 
                the person making the determination, including evidence 
                of the employer-sponsored plan and employer 
                contributions to the plan; and
                    ``(B) have access to the data used to make the 
                determination to the extent allowable by law.
        Such process shall be in addition to any rights of appeal the 
        employer may have under subtitle F of the Internal Revenue Code 
        of 1986.
    ``(g) Confidentiality of Applicant Information.--Any person who 
receives information provided by an applicant under subsection (b), or 
receives information from a Federal agency under subsection (c), (d), 
or (e) shall--
            ``(1) use the information only for the purposes of, and to 
        the extent necessary in, ensuring the efficient operation of 
        the exchange, including verifying the eligibility of an 
        individual to enroll through an exchange or to claim a premium 
        credit or cost-sharing subsidy or the amount of the credit or 
        subsidy; and
            ``(2) not disclose the information to any other person 
        except as provided in this section.
    ``(h) Penalties.--
            ``(1) False or fraudulent information.--
                    ``(A) Civil penalty.--If--
                            ``(i) any person fails to provides correct 
                        information under subsection (b); and
                            ``(ii) such failure is attributable to 
                        negligence or disregard of any rules or 
                        regulations of the Secretary,
                such person shall be subject, in addition to any other 
                penalties that may be prescribed by law, to a civil 
                penalty of not more than $25,000 with respect to any 
                failures involving an application for a plan year. For 
                purposes of this subparagraph, the terms `negligence' 
                and `disregard' shall have the same meanings as when 
                used in section 6662 of the Internal Revenue Code of 
                1986.
                    ``(B) Criminal penalty.--Any person who knowingly 
                and willfully provides false or fraudulent information 
                under subsection (b) shall be guilty of a felony, and 
                upon conviction thereof, shall be fined not more than 
                $250,000, imprisoned for not more than 5 years, or 
                both.
            ``(2) Improper use or disclosure of information.--Any 
        person who knowingly and willfully uses or discloses 
        information in violation of subsection (g) shall be guilty of a 
        felony, and upon conviction thereof, shall be fined not more 
        than $25,000, imprisoned for not more than 5 years, or both.

``SEC. 2239. STREAMLINING OF PROCEDURES FOR ENROLLMENT THROUGH AN 
              EXCHANGE AND STATE MEDICAID, CHIP, AND HEALTH SUBSIDY 
              PROGRAMS.

    ``(a) In General.--The Secretary shall establish a system meeting 
the requirements of this section under which residents of each State 
may apply for enrollment in, receive a determination of eligibility for 
participation in, and continue participation in, applicable State 
health subsidy programs.
    ``(b) Requirements Relating to Forms and Notice.--
            ``(1) Requirements relating to forms.--
                    ``(A) In general.--The Secretary shall develop and 
                provide to each State a single, streamlined form that--
                            ``(i) may be used to apply for all 
                        applicable State health subsidy programs within 
                        the State;
                            ``(ii) may be filed online, in person, by 
                        mail, or by telephone;
                            ``(iii) may be filed with an exchange or 
                        with State officials operating one of the other 
                        applicable State health subsidy programs; and
                            ``(iv) is structured to maximize an 
                        applicant's ability to complete the form 
                        satisfactorily, taking into account the 
                        characteristics of individuals who qualify for 
                        applicable State health subsidy programs.
                    ``(B) State authority to establish form.--A State 
                may develop and use its own single, streamlined form as 
                an alternative to the form developed under subparagraph 
                (A) if the alternative form is consistent with 
                standards promulgated by the Secretary under this 
                section.
                    ``(C) Supplemental eligibility forms.--The 
                Secretary may allow a State to use a supplemental or 
                alternative form in the case of individuals who apply 
                for eligibility that is not determined on the basis of 
                the household income (as defined in section 36B of the 
                Internal Revenue Code of 1986).
            ``(2) Notice.--The Secretary shall provide that an 
        applicant filing a form under paragraph (1) shall receive 
        notice of eligibility for an applicable State health subsidy 
        program without any need to provide additional information or 
        paperwork unless such information or paperwork is specifically 
        required by law when information provided on the form is 
        inconsistent with data used for the electronic verification 
        under paragraph (3) or is otherwise insufficient to determine 
        eligibility.
    ``(c) Requirements Relating to Eligibility Based on Data 
Exchanges.--
            ``(1) Development of secure interfaces.--Each State shall 
        develop for all applicable State health subsidy programs a 
        secure, electronic interface allowing an exchange of data 
        (including information contained in the application forms 
        described in subsection (b)) that allows a determination of 
        eligibility for all such programs based on a single 
        application. Such interface shall be compatible with the 
        exchange method established for data verification under section 
        2238(c)(4).
            ``(2) Data matching program.--Each applicable State health 
        subsidy program shall participate in a data matching 
        arrangement for determining eligibility for participation in 
        the program under paragraph (3) that--
                    ``(A) provides access to data described in 
                paragraph (3);
                    ``(B) applies only to individuals who--
                            ``(i) receive assistance from an applicable 
                        State health subsidy program; or
                            ``(ii) apply for such assistance--
                                    ``(I) by filing a form described in 
                                subsection (b); or
                                    ``(II) by requesting a 
                                determination of eligibility and 
                                authorizing disclosure of the 
                                information described in paragraph (3) 
                                to applicable State health coverage 
                                subsidy programs for purposes of 
                                determining and establishing 
                                eligibility; and
                    ``(C) consistent with standards promulgated by the 
                Secretary, including the privacy and data security 
                safeguards described in section 1946 or that are 
                otherwise applicable to such programs.
            ``(3) Determination of eligibility.--
                    ``(A) In general.--Each applicable State health 
                subsidy program shall, to the maximum extent 
                practicable--
                            ``(i) establish, verify, and update 
                        eligibility for participation in the program 
                        using the data matching arrangement under 
                        paragraph (2); and
                            ``(ii) determine such eligibility on the 
                        basis of reliable, third party data, including 
                        information described in sections 1137, 453(i), 
                        and 1942(a), obtained through such arrangement.
                    ``(B) Exception.--This paragraph shall not apply in 
                circumstances with respect to which the Secretary 
                determines that the administrative and other costs of 
                use of the data matching arrangement under paragraph 
                (2) outweigh its expected gains in accuracy, 
                efficiency, and program participation.
            ``(4) Secretarial standards.--The Secretary shall, after 
        consultation with persons in possession of the data to be 
        matched and representatives of applicable State health subsidy 
        programs, promulgate standards governing the timing, contents, 
        and procedures for data matching described in this subsection. 
        Such standards shall take into account administrative and other 
        costs and the value of data matching to the establishment, 
        verification, and updating of eligibility for applicable State 
        health subsidy programs.
    ``(d) Administrative Authority.--
            ``(1) Agreements.--Subject to section 2238 and section 
        6103(l)(21) of the Internal Revenue Code of 1986 and any other 
        requirement providing safeguards of privacy and data integrity, 
        the Secretary may establish model agreements, and enter into 
        agreements, for the sharing of data under this section.
            ``(2) Authority of exchange to contract out.--Nothing in 
        this section shall be construed to--
                    ``(A) prohibit contractual arrangements through 
                which a State medicaid agency determines eligibility 
                for all applicable State health subsidy programs, but 
                only if such agency complies with the Secretary's 
                requirements ensuring reduced administrative costs, 
                eligibility errors, and disruptions in coverage; or
                    ``(B) change any requirement under title XIX that 
                eligibility for participation in a State's medicaid 
                program must be determined by a public agency.
    ``(e) Applicable State Health Subsidy Program.--In this section, 
the term `applicable State health subsidy program' means--
            ``(1) the program under this title for the enrollment in 
        qualified health benefits plans offered through an exchange, 
        including the premium credits under section 36B of the Internal 
        Revenue Code of 1986 and cost-sharing subsidies under section 
        2237;
            ``(2) a State medicaid program under title XIX;
            ``(3) a State children's health insurance program (CHIP) 
        under title XXI; and
            ``(4) a State program under section 2228 establishing 
        qualified basic health plans.''.
    (b) Study of Administration of Employer Responsibility.--
            (1) In general.--The Secretary of Health and Human Services 
        shall, in consultation with the Secretary of the Treasury, 
        conduct a study of the procedures that are necessary to ensure 
        that in the administration of part B of subtitle A of title 
        XXII of the Social Security Act (as added by this section) and 
        section 4980H of the Internal Revenue Code of 1986 (as added by 
        section 1306) that the following rights are protected:
                    (A) The rights of employees to preserve their right 
                to confidentiality of their taxpayer return information 
                and their right to enroll in a qualified basic health 
                benefits plan through an exchange if an employer does 
                not provide affordable coverage.
                    (B) The rights of employers to adequate due process 
                and access to information necessary to accurately 
                determine any tax imposed on employers.
            (2) Report.--Not later than July 1, 2012, the Secretary of 
        Health and Human Services shall report the results of the study 
        conducted under paragraph (1), including any recommendations 
        for legislative changes, to the Committees on Finance and 
        Health, Education, Labor and Pensions of the Senate and the 
        Committees of Education and Labor and Ways and Means of the 
        House of Representatives.

SEC. 1102. ENCOURAGING MEANINGFUL USE OF ELECTRONIC HEALTH RECORDS.

    (a) Study.--The Secretary of Health and Human Services shall 
conduct a study of methods that can be employed by qualified health 
benefits plans offered through an exchange to encourage increased 
meaningful use of electronic health records by health care providers, 
including--
            (1) payment systems established by qualified health benefit 
        plans that provide higher rates of reimbursement for health 
        care providers that engage in meaningful use of electronic 
        health records; and
            (2) promotion of low-cost electronic health record software 
        packages that are available for use by health care providers, 
        including software packages that are available to health care 
        providers through the Veterans Administration.
    (b) Report.--
            (1) In general.--Not later than 24 months after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report containing the results of the study conducted under 
        subsection (a), together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate, including recommendations regarding the 
        feasibility and effectiveness of payment systems established by 
        qualified health benefit plans offered through an exchange to 
        provide for higher rates of reimbursement for health care 
        providers that engage in meaningful use of electronic health 
        records.
            (2) Dissemination to exchanges.--Not later than 12 month 
        after submitting the report under paragraph (1), the Secretary 
        shall provide such report to any regional exchange or exchange 
        established within a State.

                 Subtitle C--Making Coverage Affordable

                  PART I--ESSENTIAL BENEFITS COVERAGE

SEC. 1201. PROVISIONS TO ENSURE COVERAGE OF ESSENTIAL BENEFITS.

    Title XXII of the Social Security Act (as added by section 1001 and 
amended by section 1101) is amended by adding at the end the following:

                  ``PART C--MAKING COVERAGE AFFORDABLE

                ``Subpart 1--Essential Benefits Coverage

``SEC. 2241. REQUIREMENTS FOR QUALIFIED HEALTH BENEFITS PLAN.

    ``A health benefits plan shall be treated as a qualified health 
benefits plan for purposes of this title only if--
            ``(1) the plan provides an essential benefits package 
        described in section 2242;
            ``(2) subject to section 2243(c), the plan provides either 
        the bronze, silver, gold, or platinum level of coverage 
        described in section 2243; and
            ``(3) the offeror of the plan charges the same premium rate 
        for the plan without regard to whether the plan is purchased 
        through an exchange or whether the plan is purchased directly 
        from the offeror or through an agent.

``SEC. 2242. ESSENTIAL BENEFITS PACKAGE DEFINED.

    ``(a) In General.--In this division, the term `essential benefits 
package' means, with respect to any health benefits plan, coverage 
that--
            ``(1) provides payment for the items and services described 
        in subsection (b) in accordance with generally accepted 
        standards of medical or other appropriate clinical or 
        professional practice;
            ``(2) limits cost-sharing for such covered health care 
        items and services in accordance with subsection (c);
            ``(3) meets the requirements with respect to specific items 
        and services described in subsection (d); and
            ``(4) does not impose any annual or lifetime limit on the 
        coverage of such covered health care items and services.
    ``(b) Minimum Services to Be Covered.--Subject to subsection (e), 
the items and services described in this subsection are the following:
            ``(1) Hospitalization.
            ``(2) Outpatient hospital and outpatient clinic services, 
        including emergency department services.
            ``(3) Professional services of physicians and other health 
        professionals.
            ``(4) Medical and surgical care.
            ``(5) Such services, equipment, and supplies incident to 
        the services of a physician's or a health professional's 
        delivery of care in institutional settings, physician offices, 
        patients' homes or place of residence, or other settings, as 
        appropriate.
            ``(6) Prescription drugs.
            ``(7) Rehabilitative and habilitative services.
            ``(8) Mental health and substance use disorder services, 
        including behavioral health treatment.
            ``(9) Preventive services, including those services 
        recommended with a grade of A or B by the United States 
        Preventive Services Task Force and those vaccines recommended 
        for use by the Advisory Committee on Immunization Practices (an 
        advisory committee established by the Secretary, acting through 
        the Director of the Centers for Disease Control and 
        Prevention).
            ``(10) Maternity benefits.
            ``(11) Well baby and well child care and oral health, 
        vision, and hearing services, equipment, and supplies for 
        children under 21 years of age.
    ``(c) Requirements Relating to Cost-sharing.--
            ``(1) No cost-sharing for preventive services.--There shall 
        be no cost-sharing under an essential benefits package for 
        preventive items and services described in subsection (b)(9).
            ``(2) Annual limitation on cost-sharing.--
                    ``(A) 2013.--The cost-sharing incurred under an 
                essential benefits package with respect to self-only 
                coverage or coverage other than self-only coverage for 
                a plan year beginning in 2013 shall not exceed the 
                dollar amounts in effect under section 223(c)(2)(A) of 
                the Internal Revenue Code of 1986 for self-only and 
                family coverage, respectively, for taxable years 
                beginning in 2013.
                    ``(B) 2014 and later.--In the case of any plan year 
                beginning in a calendar year after 2013, the limitation 
                under this paragraph shall--
                            ``(i) in the case of self-only coverage, be 
                        equal to the dollar amount under subparagraph 
                        (A) for self-only coverage, increased by an 
                        amount equal to the product of that amount and 
                        the premium adjustment percentage under 
                        paragraph (7) for the calendar year; and
                            ``(ii) in the case of other coverage, twice 
                        the amount in effect under clause (i).
                If the amount of any increase under clause (i) is not a 
                multiple of $50, such increase shall be rounded to the 
                next lowest multiple of $50.
            ``(3) Annual limitation on deductibles for employer-
        sponsored plans.--
                    ``(A) In general.--In the case of a health benefits 
                plan offered in the small group market, the deductible 
                under an essential benefits package shall not exceed--
                            ``(i) $2,000 in the case of a plan covering 
                        a single individual; and
                            ``(ii) $4,000 in the case of any other 
                        plan.
                The amounts under clauses (i) and (ii) may be increased 
                by the maximum amount of reimbursement which is 
                reasonably available to a participant under a flexible 
                spending arrangement described in section 106(c)(2) of 
                the Internal Revenue Code of 1986 (determined without 
                regard to any salary reduction arrangement).
                    ``(B) Indexing of limits.--In the case of any plan 
                year beginning in a calendar year after 2013--
                            ``(i) the dollar amount under subparagraph 
                        (A)(i) shall be increased by an amount equal to 
                        the product of that amount and the premium 
                        adjustment percentage under paragraph (7) for 
                        the calendar year; and
                            ``(ii) the dollar amount under subparagraph 
                        (A)(ii) shall be increased to an amount equal 
                        to twice the amount in effect under 
                        subparagraph (A)(i) for plan years beginning in 
                        the calendar year, determined after application 
                        of clause (i).
                If the amount of any increase under clause (i) is not a 
                multiple of $50, such increase shall be rounded to the 
                next lowest multiple of $50.
                    ``(C) Limitations.--
                            ``(i) Actuarial value.--The limitation 
                        under this paragraph shall be applied in such a 
                        manner so as to not affect the actuarial value 
                        of any qualified health benefits plan, 
                        including a plan in the bronze level.
                            ``(ii) Catastrophic plan.--This paragraph 
                        shall not apply to a catastrophic plan 
                        described in section 2243(c).
            ``(4) Parity within categories.--In the case of items and 
        services described in paragraphs (1), (2), (3), and (5) of 
        subsection (b), the cost-sharing incurred under an essential 
        benefits package shall be the same for treatment of conditions 
        within each such category of covered services.
            ``(5) Special rule for value-based design.--
                    ``(A) In general.--Paragraphs (1) and (4) shall not 
                apply in the case of a health benefits plan for which a 
                value-based design is used.
                    ``(B) Value-based design.--For purposes of 
                subparagraph (A), a value-based design is a methodology 
                under which--
                            ``(i) clinically beneficial preventive 
                        screenings, lifestyle interventions, 
                        medications, immunizations, diagnostic tests 
                        and procedures, and treatments are identified; 
                        and
                            ``(ii) cost-sharing for items and services 
                        described in clause (i) is reduced or 
                        eliminated to reflect the high value and 
                        effectiveness of the items and services.
            ``(6) Cost-sharing.--In this title, the term `cost-sharing' 
        includes deductibles, coinsurance, copayments, and similar 
        charges but does not include premiums or any network payment 
        differential for covered services or spending for non-covered 
        services.
            ``(7) Premium adjustment percentage.--For purposes of 
        paragraphs (2)(B)(i) and (3)(B)(i), the premium adjustment 
        percentage for any calendar year is the percentage (if any) by 
        which the average per capita premium for health insurance 
        coverage in the United States for the preceding calendar year 
        (as estimated by the Secretary no later than October 1 of such 
        preceding calendar year) exceeds such average per capita 
        premium for 2012 (as determined by the Secretary).
    ``(d) Specific Items and Services.--
            ``(1) Prescription drugs.--An essential benefits package 
        shall at least meet the class and coverage requirements of part 
        D of title XVIII of this Act with respect to prescription 
        drugs.
            ``(2) Mental health and substance use disorder services.--
        An essential benefits package shall at least meet the minimum 
        standards required by Federal or State law for coverage of 
        mental health and substance use disorder services, including 
        ensuring that any financial requirements and treatment 
        limitations applicable to such services comply with the 
        requirements of section 9812(a) of the Internal Revenue Code of 
        1986 in the same manner as such requirements apply to a group 
        health plan.
            ``(3) Tobacco cessation programs.--If a health benefits 
        plan varies its premium on the basis of tobacco use, an 
        essential benefits package shall include coverage for tobacco 
        cessation programs, including counseling and pharmacotherapy 
        (involving either prescription or nonprescription drugs).
            ``(4) Other items and services.--An essential benefits 
        package shall include coverage of day surgery and related 
        anaesthesia, diagnostic images and screening (including x-
        rays), and radiation and chemotherapy.
            ``(5) Pediatric dental benefits.--If a health benefits plan 
        described in section 2231(c)(2) (relating to stand-alone dental 
        benefits plans) is offered through an exchange, another health 
        benefits plan offered through such exchange shall not fail to 
        be treated as a qualified health benefits plan solely because 
        the plan does not offer coverage of benefits offered through 
        the stand-alone plan that are otherwise required under 
        subsection (b)(11).
            ``(6) Special rules for emergency department services.--A 
        health benefits plan shall not be treated as meeting the 
        requirements of subsection (b)(2) to provide coverage for 
        emergency department services unless the plan provides that--
                    ``(A) coverage for such services will be provided 
                without regard to any requirement under the plan for 
                prior authorization of services or any limitation on 
                coverage where the provider of services does not have a 
                contractual relationship with the plan for the 
                providing of services; and
                    ``(B) if such services are provided out-of-network, 
                any cost-sharing required by the plan does not exceed 
                the cost-sharing that would be required if such 
                services were provided in-network.
    ``(e) Specification and Annual Update.--
            ``(1) In general.--Not later than July 1, 2012, the 
        Secretary shall--
                    ``(A) define the benefit categories established 
                under subsection (b) for qualified health benefits 
                plans offered in the individual market within a State; 
                and
                    ``(B) specify the covered treatments, items, and 
                services within each of such categories.
        The Secretary shall establish such benefits coverage on the 
        basis of the most recent medical evidence and information with 
        respect to scientific advancement.
            ``(2) Annual updates.--The Secretary shall annually update 
        the benefits coverage determined under paragraph (1). The 
        Secretary may address any gaps in access to coverage or changes 
        in the evidence base by modifying or adding any category of 
        benefits and covered treatments, items, and services.
            ``(3) Limitation.--The Secretary shall ensure that the 
        scope of the benefits coverage under this subsection is not 
        more extensive than the scope of the benefits provided under a 
        typical employer plan, as determined by the Secretary and 
        certified by the Chief Actuary of the Centers for Medicare & 
        Medicaid Services.
            ``(4) Flexibility in plan design.--The Secretary shall 
        allow flexibility in plan design to the extent such flexibility 
        does not result in adverse selection.
    ``(f) Exchange Requirement.--Each State shall ensure that at least 
1 plan offered in each exchange established in the State shall offer 
qualified health benefits plans that are at least actuarially 
equivalent to the standard option Blue Cross Blue Shield plan offered 
under the Federal Employees Health Benefits Program chapter 89 of title 
5, United States Code.
    ``(g) Payments to Federally-qualified Health Centers.--If any item 
or service covered by a qualified health benefits plan is provided by a 
Federally-qualified health center (as defined in section 1905(l)(2)(B)) 
to an enrollee of the plan, the offeror of the plan shall pay to the 
center for the item or service an amount that is not less than the 
amount of payment that would have been paid to the center under section 
1902(bb) for such item or service.

``SEC. 2243. LEVELS OF COVERAGE.

    ``(a) In General.--Except as provided in subsections (c) and (d), a 
health benefits plan shall provide a bronze, silver, gold, or platinum 
level of coverage.
    ``(b) Levels of Coverage Defined.--In this title, a health benefits 
plan providing an essential benefits package shall be assigned to 1 of 
the following levels of coverage:
            ``(1) Bronze level.--A plan in the bronze level shall 
        provide a level of coverage that is designed to provide 
        benefits that are actuarially equivalent to 65 percent of the 
        full actuarial value of the benefits provided under the 
        essential benefits package.
            ``(2) Silver level.--A plan in the silver level shall 
        provide a level of coverage that is designed to provide 
        benefits that are actuarially equivalent to 70 percent of the 
        full actuarial value of the benefits provided under the 
        essential benefits package.
            ``(3) Gold level.--A plan in the gold level shall provide a 
        level of coverage that is designed to provide benefits that are 
        actuarially equivalent to 80 percent of the full actuarial 
        value of the benefits provided under the essential benefits 
        package.
            ``(4) Platinum level.--A plan in the platinum level shall 
        provide a level of coverage that is designed to provide 
        benefits that are actuarially equivalent to 90 percent of the 
        full actuarial value of the benefits provided under the 
        essential benefits package.
    ``(c) Catastrophic Plan for Young Individuals.--
            ``(1) In general.--A health benefits plan not providing a 
        bronze, silver, gold, or platinum level of coverage shall be 
        treated as meeting the requirements of this section with 
        respect to any plan year if--
                    ``(A) except as provided in paragraph (3), the only 
                individuals who are eligible to enroll in the plan are 
                individuals who have not attained the age of 26 before 
                the beginning of the plan year; and
                    ``(B) the plan provides an essential benefits 
                package meeting the requirements of section 2242, 
                except that, subject to paragraph (2), the plan 
                provides no benefits for any plan year until the 
                individual has incurred cost-sharing expenses in an 
                amount equal to the annual limitation in effect under 
                section 2242(c)(2) for the plan year.
            ``(2) Preventive services.--A health benefits plan shall 
        not be treated as described in paragraph (1) unless the plan 
        requires no cost-sharing with respect to preventive services 
        described in section 2242(b)(9).
            ``(3) Individuals without affordable coverage.--If an 
        individual has a certification in effect for any plan year 
        under section 2236(f) that the individual is exempt from the 
        requirement under section 5000A of the Internal Revenue Code of 
        1986 by reason of section 5000A(e)(2), such individual shall be 
        eligible to enroll for the plan year in a plan described in 
        paragraph (1).
    ``(d) Child-only Plans.--If an offeror offers a qualified health 
benefits plan in any level of coverage specified under this section, 
the offeror may also offer that plan in that level as a plan in which 
the only enrollees are individuals who, as of the beginning of a plan 
year--
            ``(1) have not attained the age of 21; or
            ``(2) have attained the age of 21 but are the dependent of 
        another person.
    ``(e) Allowable Variance.--A State may allow a de minimus variation 
in the actuarial valuations used in determining the level of coverage 
of a plan to account for differences in actuarial estimates.
    ``(f) Plan Reference.--In this title, any reference to a bronze, 
silver, gold, or platinum plan shall be treated as a reference to a 
health benefits plan providing a bronze, silver, gold, or platinum 
level of coverage, as the case may be.

``SEC. 2244. APPLICATION OF CERTAIN RULES TO PLANS IN GROUP MARKETS.

    ``(a) Annual and Lifetime Limits.--In the case of a health benefits 
plan offered in the large or small group market in a State, the State 
shall prohibit the plan for plan years beginning after 2009 from 
imposing unreasonable annual or lifetime limits (within the meaning of 
section 223 of the Internal Revenue Code of 1986) on enrollees in the 
plan. This subsection shall not apply to a grandfathered health 
benefits plan or to a qualified health benefits plan in the small group 
market.
    ``(b) Additional Large Group Requirements.--In the case of a health 
benefits plan offered in the large group market in a State, the State 
shall require such plan for plan years beginning after June 30, 2013--
            ``(1) to meet the requirements of section 2243(c)(2) 
        (relating to annual limits on cost-sharing); and
            ``(2) to provide preventive items and services described in 
        section 2243(b)(9) and except as provided in section 
        2243(c)(5), to require no cost-sharing for such items and 
        services.
    ``(c) Auto Enrollment.--Each State shall require any large employer 
that has more than 200 employees and that offers employees enrollment 
in 1 or more health benefits plans to automatically enroll new full-
time employees in one of the plans and to continue the enrollment of 
current employees in a health benefits plan offered through the 
employer. Any automatic enrollment program shall include adequate 
notice and the opportunity for an employee to opt out of any coverage 
the individual was automatically enrolled in.

``SEC. 2245. SPECIAL RULES RELATING TO COVERAGE OF ABORTION SERVICES.

    ``(a) Voluntary Choice of Coverage of Abortion Services.--
            ``(1) In general.--Notwithstanding any other provision of 
        this subpart and subject to paragraph (3)--
                    ``(A) nothing in this subpart shall be construed to 
                require a health benefits plan to provide coverage of 
                services described in paragraph (2)(A) or (2)(B) as 
                part of its essential benefits package for any plan 
                year; and
                    ``(B) the offeror of a health benefits plan shall 
                determine whether or not the plan provides coverage of 
                services described in paragraph (2)(A) or (2)(B) as 
                part of such package for the plan year.
            ``(2) Abortion services.--
                    ``(A) Abortions for which public funding is 
                prohibited.--The services described in this 
                subparagraph are abortions for which the expenditure of 
                Federal funds appropriated for the Department of Health 
                and Human Services is not permitted, based on the law 
                as in effect as of the date that is 6 months before the 
                beginning of the plan year involved.
                    ``(B) Abortions for which public funding is 
                allowed.--The services described in this subparagraph 
                are abortions for which the expenditure of Federal 
                funds appropriated for the Department of Health and 
                Human Services is permitted, based on the law as in 
                effect as of the date that is 6 months before the 
                beginning of the plan year involved.
            ``(3) Assured availability of varied coverage through 
        exchanges.--
                    ``(A) In general.--The Secretary shall assure that 
                with respect to qualified health benefits plans offered 
                in any exchange established pursuant to this title--
                            ``(i) there is at least one such plan that 
                        provides coverage of services described in 
                        subparagraphs (A) and (B) of paragraph (2); and
                            ``(ii) there is at least one such plan that 
                        does not provide coverage of services described 
                        in paragraph (2)(A).
                    ``(B) Special rules.--For purposes of subparagraph 
                (A)--
                            ``(i) a plan shall be treated as described 
                        in subparagraph (A)(ii) if the plan does not 
                        provide coverage of services described in 
                        either paragraph (2)(A) or (2)(B); and
                            ``(ii) if a State has one exchange covering 
                        both the individual and small group markets, 
                        the Secretary shall meet the requirements of 
                        subparagraph (A) separately with respect to 
                        each such market.
    ``(b) Prohibition of Use of Federal Funds.--
            ``(1) In general.--If a qualified health benefits plan 
        provides coverage of services described in subsection 
        (a)(2)(A), the offeror of the plan shall not use any amount 
        attributable to any of the following for purposes of paying for 
        such services:
                    ``(A) The credit under section 36B(b) of the 
                Internal Revenue Code of 1986 (and the amount of the 
                advance payment of the credit under section 2248 of the 
                Social Security Act).
                    ``(B) Any cost-sharing subsidy under section 2247.
            ``(2) Segregation of funds.--In the case of a plan to which 
        paragraph (1) applies, the offeror of the plan shall, out of 
        amounts not described in paragraph (1), segregate an amount 
        equal to the actuarial amounts determined under paragraph (3) 
        for all enrollees from the amounts described in paragraph (1).
            ``(3) Actuarial value of optional service coverage.--
                    ``(A) In general.--The Secretary shall estimate the 
                basic per enrollee, per month cost, determined on an 
                average actuarial basis, for including coverage under a 
                qualified health benefits plan of the services 
                described in subsection (a)(2)(A).
                    ``(B) Considerations.--In making such estimate, the 
                Secretary--
                            ``(i) may take into account the impact on 
                        overall costs of the inclusion of such 
                        coverage, but may not take into account any 
                        cost reduction estimated to result from such 
                        services, including prenatal care, delivery, or 
                        postnatal care;
                            ``(ii) shall estimate such costs as if such 
                        coverage were included for the entire 
                        population covered; and
                            ``(iii) may not estimate such a cost at 
                        less than $1 per enrollee, per month.
    ``(c) No Discrimination on the Basis of Provision of Abortion.--A 
qualified health benefits plan may not discriminate against any 
individual health care provider or health care facility because of its 
willingness or unwillingness to provide, pay for, provide coverage of, 
or refer for abortions.''.

SEC. 1202. APPLICATION OF STATE AND FEDERAL LAWS REGARDING ABORTION.

    (a) No Preemption of State Laws Regarding Abortion.--Nothing in 
this Act shall be construed to preempt or otherwise have any effect on 
State laws regarding the prohibition of (or requirement of) coverage, 
funding, or procedural requirements on abortions, including parental 
notification or consent for the performance of an abortion on a minor.
    (b) No Effect on Federal Laws Regarding Abortion.--
            (1) In general.--Nothing in this Act shall be construed to 
        have any effect on Federal laws regarding--
                    (A) conscience protection;
                    (B) willingness or refusal to provide abortion; and
                    (C) discrimination on the basis of the willingness 
                or refusal to provide, pay for, cover, or refer for 
                abortion or to provide or participate in training to 
                provide abortion.
    (c) No Effect on Federal Civil Rights Law.--Nothing in this section 
shall alter the rights and obligations of employees and employers under 
title VII of the Civil Rights Act of 1964.

SEC. 1203. APPLICATION OF EMERGENCY SERVICES LAWS.

    Nothing in this Act shall be construed to relieve any health care 
provider from providing emergency services as required by State or 
Federal law, including section 1867 of the Social Security Act 
(popularly known as ``EMTALA'').

 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.

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

``SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH 
              BENEFITS PLAN.

    ``(a) In General.--In the case of an applicable taxpayer, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for any taxable year an amount equal to the premium assistance credit 
amount of the taxpayer for the taxable year.
    ``(b) Premium Assistance Credit Amount.--For purposes of this 
section--
            ``(1) In general.--The term `premium assistance credit 
        amount' means, with respect to any taxable year, the sum of the 
        premium assistance amounts determined under paragraph (2) with 
        respect to all coverage months of the taxpayer occurring during 
        the taxable year.
            ``(2) Premium assistance amount.--The premium assistance 
        amount determined under this subsection with respect to any 
        coverage month is the amount equal to the excess (if any) of--
                    ``(A) the lesser of--
                            ``(i) the monthly premiums for such month 
                        for 1 or more qualified health benefits plans 
                        offered in the individual market within a State 
                        which cover the taxpayer, the taxpayer's 
                        spouse, or any dependent (as defined in section 
                        152) of the taxpayer and which were enrolled in 
                        through an exchange established by the State 
                        under subpart B of title XXII of the Social 
                        Security Act, or
                            ``(ii) the adjusted monthly premium for 
                        such month for the applicable second lowest 
                        cost silver plan with respect to the taxpayer, 
                        over
                    ``(B) an amount equal to 1/12 of the product of the 
                applicable percentage and the taxpayer's household 
                income for the taxable year.
            ``(3) Other terms and rules relating to premium assistance 
        amounts.--For purposes of paragraph (2)--
                    ``(A) Applicable percentage.--
                            ``(i) In general.--The applicable 
                        percentage with respect to any taxpayer for any 
                        taxable year is equal to 2 percent, increased 
                        by the number of percentage points (not greater 
                        than 10) which bears the same ratio to 10 
                        percentage points as--
                                    ``(I) the taxpayer's household 
                                income for the taxable year in excess 
                                of 100 percent of the poverty line for 
                                a family of the size involved, bears to
                                    ``(II) an amount equal to 200 
                                percent of the poverty line for a 
                                family of the size involved.
                            ``(ii) Indexing.--In the case of taxable 
                        years beginning in any calendar year after 
                        2013, the Secretary shall adjust the initial 
                        and final applicable percentages for the 
                        calendar year to reflect the excess of the rate 
                        of premium growth between the preceding 
                        calendar year and 2012 over the rate of income 
                        growth for such period.
                    ``(B) Applicable second lowest cost silver plan.--
                The applicable second lowest cost silver plan with 
                respect to any applicable taxpayer is the second lowest 
                cost silver plan in the individual market which--
                            ``(i) is offered through the same exchange 
                        through which the qualified health benefits 
                        plans taken into account under paragraph 
                        (2)(A)(i) were offered, and
                            ``(ii) in the case of--
                                    ``(I) an applicable taxpayer whose 
                                tax for the taxable year is determined 
                                under section 1(c) (relating to 
                                unmarried individuals other than 
                                surviving spouses and heads of 
                                households), provides self-only 
                                coverage, and
                                    ``(II) any other applicable 
                                taxpayer, provides family coverage.
                If a taxpayer files a joint return and no credit is 
                allowed under this section with respect to 1 of the 
                spouses by reason of subsection (e), the taxpayer shall 
                be treated as described in clause (ii)(I) unless a 
                deduction is allowed under section 151 for the taxable 
                year with respect to a dependent other than either 
                spouse.
                    ``(C) Adjusted monthly premium.--The adjusted 
                monthly premium for an applicable second lowest cost 
                silver plan is the monthly premium which would have 
                been charged for the plan if each individual covered 
                under a qualified health benefits plan taken into 
                account under paragraph (2)(A)(i) were covered by the 
                plan and the premium was adjusted only for the age of 
                each such individual in the manner allowed under 
                section 2204 of the Social Security Act.
            ``(4) Reduction to eliminate federal budget deficit.--The 
        premium assistance credit amount (determined without regard to 
        this paragraph) with respect to a month in a plan year for 
        which a reduction is required in such amount under section 1209 
        of the America's Healthy Future Act of 2009 shall be reduced by 
        the percentage specified in such section.
    ``(c) Definition and Rules Relating to Applicable Taxpayers, 
Coverage Months, and Qualified Health Benefits Plan.--For purposes of 
this section--
            ``(1) Applicable taxpayer.--
                    ``(A) In general.--The term `applicable taxpayer' 
                means, with respect to any taxable year, a taxpayer 
                whose household income for the taxable year exceeds 100 
                percent (133 percent in the case of taxable years 
                beginning in 2013) but does not exceed 400 percent of 
                an amount equal to the poverty line for a family of the 
                size involved.
                    ``(B) Special rule for certain individuals lawfully 
                present in the united states.--In the case of any 
                taxable year beginning after December 31, 2013, if--
                            ``(i) a taxpayer has a household income 
                        which is not greater than 100 percent of an 
                        amount equal to the poverty line for a family 
                        of the size involved, and
                            ``(ii) the taxpayer is an alien lawfully 
                        admitted to the United States for permanent 
                        residence, or an alien lawfully present in the 
                        United States, but is not eligible for the 
                        medicaid program under title XIX of the Social 
                        Security Act by reason of such alien status,
                the taxpayer shall be treated as an applicable 
                taxpayer.
                    ``(C) Married couples must file joint return.--If 
                the taxpayer is married (within the meaning of section 
                7703) at the close of the taxable year, the taxpayer 
                shall be treated as an applicable taxpayer only if the 
                taxpayer and the taxpayer's spouse file a joint return 
                for the taxable year.
                    ``(D) Denial of credit to dependents.--No credit 
                shall be allowed under this section to any individual 
                with respect to whom a deduction under section 151 is 
                allowable to another taxpayer for a taxable year 
                beginning in the calendar year in which such 
                individual's taxable year begins.
            ``(2) Coverage month.--For purposes of this subsection--
                    ``(A) In general.--The term `coverage month' means, 
                with respect to an applicable taxpayer, any month if--
                            ``(i) as of the first day of such month the 
                        taxpayer, the taxpayer's spouse, or any 
                        dependent of the taxpayer is covered by a 
                        qualified health benefits plan described in 
                        subsection (b)(2)(A)(i), and
                            ``(ii) the premium for coverage under such 
                        plan for such month is paid by the taxpayer (or 
                        through advance payment of the credit under 
                        subsection (a) under section 2248 of the Social 
                        Security Act).
                    ``(B) Exception for essential health benefits 
                coverage.--
                            ``(i) In general.--The term `coverage 
                        month' shall not include any month with respect 
                        to an individual if for such month the 
                        individual is eligible for essential health 
                        benefits coverage other than eligibility for 
                        coverage under a qualified health benefits plan 
                        in the individual market offered through an 
                        exchange.
                            ``(ii) Essential health benefits 
                        coverage.--The term `essential health benefits 
                        coverage' has the meaning given such term by 
                        section 5000A.
                    ``(C) Special rule for employer-sponsored essential 
                coverage.--For purposes of subparagraph (B)--
                            ``(i) Coverage must be affordable.--Except 
                        as provided in clause (iii), an employee shall 
                        not be treated as eligible for essential health 
                        benefits coverage if such coverage--
                                    ``(I) consists of an eligible 
                                employer-sponsored plan (as defined in 
                                section 5000A(f)(2)) or a grandfathered 
                                health benefits plan maintained by the 
                                employee's employer, and
                                    ``(II) the employee's required 
                                contribution (within the meaning of 
                                section 5000A(e)(2)) with respect to 
                                the plan exceeds 10 percent of the 
                                applicable taxpayer's household income.
                        This clause shall also apply to an individual 
                        who is eligible to enroll in the plan by reason 
                        of a relationship the individual bears to the 
                        employee.
                            ``(ii) Coverage must provide minimum 
                        value.--Except as provided in clause (iii), an 
                        employee shall not be treated as eligible for 
                        essential health benefits coverage if such 
                        coverage consists of an eligible employer-
                        sponsored plan (as defined in section 
                        5000A(f)(2)) or a grandfathered health benefits 
                        plan maintained by the employee's employer and 
                        the plan's share of the total allowed costs of 
                        benefits provided under the plan is less than 
                        65 percent of such costs.
                            ``(iii) Employee or family must not be 
                        covered under employer plan.--Clauses (i) and 
                        (ii) shall not apply if the employee (or any 
                        individual described in the last sentence of 
                        clause (i)) is covered under the eligible 
                        employer-sponsored plan or the grandfathered 
                        health benefits plan.
                            ``(iv) Indexing.--In the case of plan years 
                        beginning in any calendar year after 2013, 
                        clause (i)(II) shall be applied by substituting 
                        for 10 percent a percentage equal to the sum 
                        of--
                                    ``(I) 10 percent, plus
                                    ``(II) 10 percent multiplied by the 
                                premium adjustment percentage (as 
                                defined in section 2242(c)(7) of the 
                                Social Security Act) for the calendar 
                                year.
                    ``(D) Special rule for medicaid individuals.--An 
                individual shall not be treated as eligible for 
                essential health benefits coverage if under title XIX 
                of the Social Security Act the individual may elect to 
                enroll in the medicaid program or in a qualified health 
                benefits plan in the individual market through an 
                exchange and elects to enroll in such plan even if 
                under the medicaid program the individual receives 
                coverage for items and services or cost-sharing which 
                is provided under the medicaid program but not under 
                such plan.
            ``(3) Definitions.--For purposes of this paragraph--
                    ``(A) Qualified health benefits plan.--The term 
                `qualified health benefits plan' has the meaning given 
                such term by section 2201(b) of the Social Security 
                Act.
                    ``(B) Grandfathered health benefits plan.--The term 
                `grandfathered health benefits plan' has the meaning 
                given such term by section 2221 of the Social Security 
                Act.
    ``(d) Terms Relating to Income and Families.--For purposes of this 
section--
            ``(1) Family size.--The family size involved with respect 
        to any taxpayer shall be equal to the number of individuals for 
        whom the taxpayer is allowed a deduction under section 151 
        (relating to allowance of deduction for personal exemptions) 
        for the taxable year.
            ``(2) Household income.--
                    ``(A) In general.--The term `household income' 
                means, with respect to any taxpayer, an amount equal to 
                the sum of--
                            ``(i) the modified gross income of the 
                        taxpayer, plus
                            ``(ii) the aggregate modified gross incomes 
                        of all other individuals taken into account in 
                        determining the taxpayer's family size under 
                        paragraph (1).
                    ``(B) Modified gross income.--The term `modified 
                gross income' means gross income--
                            ``(i) decreased by the amount of any 
                        deduction allowable under paragraphs (1), (3), 
                        or (4) of section 62(a),
                            ``(ii) increased by the amount of interest 
                        received or accrued during the taxable year 
                        which is exempt from tax imposed by this 
                        chapter, and
                            ``(iii) determined without regard to 
                        sections 911, 931, and 933.
            ``(3) Poverty line.--
                    ``(A) In general.--The term `poverty line' has the 
                meaning given that term in section 2110(c)(5) of the 
                Social Security Act (42 U.S.C. 1397jj(c)(5)).
                    ``(B) Poverty line used.--In the case of any 
                qualified health benefits plan offered through an 
                exchange for coverage during a taxable year beginning 
                in a calendar year, the poverty line used shall be the 
                most recently published poverty line as of the 1st day 
                of the regular enrollment period for coverage during 
                such calendar year.
    ``(e) Rules for Undocumented Aliens.--
            ``(1) In general.--If any individual for whom the taxpayer 
        is allowed a deduction under section 151 (relating to allowance 
        of deduction for personal exemptions) for the taxable year is 
        an undocumented alien--
                    ``(A) no credit shall be allowed under subsection 
                (a) with respect to any portion of any premium taken 
                into account under clause (i) or (ii) of subsection 
                (b)(2)(A) which is attributable to the individual, and
                    ``(B) the individual shall not be taken into 
                account in determining the family size involved but the 
                individual's modified gross income shall be taken into 
                account in determining household income.
            ``(2) Undocumented alien.--For purposes of this section--
                    ``(A) The term `undocumented alien' means an 
                individual who is not, or who is reasonably not 
                expected to be for the entire taxable year, a citizen 
                or national of the United States, an alien lawfully 
                admitted to the United States for permanent residence, 
                or an alien lawfully present in the United States.
                    ``(B) Identification requirement.--An individual 
                shall be treated as an undocumented alien unless the 
                information required under section 2238(b)(2) of the 
                Social Security Act has been provided with respect to 
                such individual.
    ``(f) Reconciliation of Credit and Advance Credit.--
            ``(1) In general.--The amount of the credit allowed under 
        this section for any taxable year shall be reduced (but not 
        below zero) by the amount of any advance payment of such credit 
        under section 2248 of the Social Security Act.
            ``(2) Excess advance payments.--
                    ``(A) In general.--If the advance payments to a 
                taxpayer under section 2248 of the Social Security Act 
                for a taxable year exceed the credit allowed by this 
                section (determined without regard to paragraph (1)), 
                the tax imposed by this chapter for the taxable year 
                shall be increased by the amount of such excess.
                    ``(B) Limitation on increase where income less than 
                300 percent of poverty line.--In the case of an 
                applicable taxpayer whose household income is less than 
                300 percent of the poverty line for the size of the 
                family involved for the taxable year, the amount of the 
                increase under subparagraph (A) shall in no event 
                exceed $400 ($250 in the case of a taxpayer whose tax 
                is determined under section 1(c) for the taxable year).
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section, 
including regulations which provide for--
            ``(1) the coordination of the credit allowed under this 
        section with the program for advance payment of the credit 
        under section 2248 of the Social Security Act,
            ``(2) requirements for information required to be included 
        on a return of tax with respect to the modified gross income of 
        individuals other than the taxpayer, and
            ``(3) the application of subsection (f) where the filing 
        status of the taxpayer for a taxable year is different from 
        such status used for determining the advance payment of the 
        credit.''.
    (b) Disallowance of Deduction.--Section 280C of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(g) Credit for Health Insurance Premiums.--No deduction shall be 
allowed for the portion of the premiums paid by the taxpayer for 
coverage of 1 or more individuals under a qualified health benefits 
plan which is equal to the amount of the credit determined for the 
taxable year under section 36B(a) with respect to such premiums.''.
    (c) Treatment of Failure to Provide Documentation as Mathematical 
Error.--Section 6213(g)(2) of the Internal Revenue Code of 1986 is 
amended by striking ``and'' at the end of subparagraph (M), by striking 
the period at the end of subparagraph (N) and inserting ``, and'', and 
by inserting after subparagraph (N) the following new subparagraph:
                    ``(O) the omission of identifying information 
                described in section 2238(b)(1) of the Social Security 
                Act and required under section 36B(e)(2)(B).''.
    (d) Study.--Not later than 5 years after the date of the enactment 
of this Act, the Secretary of the Treasury, in consultation with the 
Secretary of Health and Human Services, shall conduct a study of 
whether the percentage of household income used for purposes of section 
36B(c)(2)(C) of the Internal Revenue Code of 1986 (as added by this 
section) is the appropriate level for determining whether employer-
provided coverage is affordable for an employee and whether such level 
may be lowered without significantly increasing the costs to the 
Federal Government and reducing employer-provided coverage. The 
Secretary shall report the results of such study to the appropriate 
committees of Congress, including any recommendations for legislative 
changes.
    (e) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36B,'' after ``36A,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36A 
        the following new item:

``Sec. 36B. Refundable credit for coverage under a qualified health 
                            benefits plan.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 1206. COST-SHARING SUBSIDIES AND ADVANCE PAYMENTS OF PREMIUM 
              CREDITS AND COST-SHARING SUBSIDIES.

    Title XXII of the Social Security Act (as added by section 1001 and 
amended by sections 1101 and 1201) is amended by adding at the end the 
following:

        ``Subpart 2--Premium Credits and Cost-sharing Subsidies

``SEC. 2246. PREMIUM CREDITS.

    ``For refundable tax credit providing premium assistance for 
individuals with income less than 400 percent of the Federal poverty 
line, see section 36B of the Internal Revenue Code of 1986 (as added by 
section 1205 of the America's Healthy Future Act of 2009).

``SEC. 2247. COST-SHARING SUBSIDIES FOR INDIVIDUALS ENROLLING IN 
              QUALIFIED HEALTH BENEFIT PLANS.

    ``(a) In General.--In the case of an eligible insured enrolled in a 
qualified health benefits plan with respect to which a credit is 
allowed to the insured (or an applicable taxpayer on behalf of the 
insured) under section 36B of the Internal Revenue Code of 1986--
            ``(1) the Secretary shall notify the offeror of the plan of 
        the eligible insured's eligibility for a reduction in cost-
        sharing under this section; and
            ``(2) the offeror shall reduce the cost-sharing under the 
        plan at the level and in the manner specified in subsection 
        (c).
    ``(b) Eligible Insured.--In this section, the term `eligible 
insured' means an individual--
            ``(1) who enrolls in a qualified health benefits plan in 
        the silver level of coverage in the individual market offered 
        through an exchange under part B; and
            ``(2) whose household income exceeds 100 percent (133 
        percent in the case of taxable years beginning in 2013) but 
        does not exceed 400 percent of the poverty line for a family of 
        the size involved.
In the case of an individual described in section 36B(c)(1)(B) of the 
Internal Revenue Code of 1986 for any taxable year beginning after 
December 31, 2013, the individual shall be treated as having household 
income equal to 100 percent of such poverty line for purposes of 
applying this section.
    ``(c) Determination of Reduction in Cost-sharing.--
            ``(1) Reduction in out-of-pocket limit.--The reduction in 
        cost-sharing under this subsection shall first be achieved by 
        reducing the applicable out-of pocket limit under section 
        2242(c)(2) in the case of--
                    ``(A) an eligible insured whose household income is 
                more than 100 percent but not more than 200 percent of 
                the poverty line for a family of the size involved, by 
                two-thirds;
                    ``(B) an eligible insured whose household income is 
                more than 200 percent but not more than 300 percent of 
                the poverty line for a family of the size involved, by 
                one-half; and
                    ``(C) an eligible insured whose household income is 
                more than 300 percent but not more than 400 percent of 
                the poverty line for a family of the size involved, by 
                one-third.
        The reduction under this paragraph shall not result in an 
        increase in the plan's share of the total allowed costs of 
        benefits provided under the plan above 80 percent (90 percent 
        in the case of an eligible insured described in subparagraph 
        (A)) of such costs
            ``(2) Additional reduction for lower income insureds.--The 
        Secretary shall establish procedures under which the offeror of 
        a qualified health benefits plan to which this section applies 
        shall further reduce cost-sharing under the plan in a manner 
        sufficient to--
                    ``(A) in the case of an eligible insured whose 
                household income is not less than 100 percent but not 
                more than 150 percent of the poverty line for a family 
                of the size involved, increase the plan's share of the 
                total allowed costs of benefits provided under the plan 
                to 90 percent of such costs; and
                    ``(B) in the case of an eligible insured whose 
                household income is more than 150 percent but not more 
                than 200 percent of the poverty line for a family of 
                the size involved, increase the plan's share of the 
                total allowed costs of benefits provided under the plan 
                to 80 percent of such costs.
            ``(3) Reduction to eliminate federal budget deficit.--The 
        reduction in cost-sharing under this section (determined 
        without regard to this paragraph) with respect to a plan year 
        for which a reduction is required in such amount under section 
        1209 of the America's Healthy Future Act of 2009 shall be 
        reduced by the percentage specified in such section.
            ``(4) Methods for providing subsidy.--
                    ``(A) In general.--An offeror of a qualified health 
                benefits plan making reductions under this subsection 
                shall notify the Secretary of such reductions and the 
                Secretary shall make periodic and timely payments to 
                the offeror equal to the value of the reductions.
                    ``(B) Capitated payments.--The Secretary may 
                establish a capitated payment system to carry out the 
                payment of subsidies under this section. Any such 
                system shall take into account the value of the 
                subsidies and make appropriate risk adjustments to such 
                payments.
    ``(d) Special Rules for Indians.--
            ``(1) Indians under 300 percent of poverty.--If an 
        individual enrolled in any qualified health benefits plan in 
        the individual market through an exchange is an Indian (as 
        defined in section 4 of the Indian Health Care Improvement Act) 
        whose household income is not more than 300 percent of the 
        poverty line for a family of the size involved, then, for 
        purposes of this section--
                    ``(A) such individual shall be treated as an 
                eligible insured; and
                    ``(B) the offeror of the plan shall eliminate any 
                cost-sharing under the plan.
            ``(2) Items or services furnished through indian health 
        providers.--If an Indian (as so defined) enrolled in a 
        qualified health benefits plan is furnished an item or service 
        directly by the Indian Health Service, an Indian Tribe, Tribal 
        Organization, or Urban Indian Organization or through referral 
        under contract health services--
                    ``(A) no cost-sharing under the plan shall be 
                imposed under the plan for such item or service; and
                    ``(B) the offeror of the plan shall not reduce the 
                payment to any such entity for such item or service by 
                the amount of any cost-sharing that would be due from 
                the Indian but for subparagraph (A).
            ``(3) Payment.--The Secretary shall pay to the offeror of a 
        qualified health benefits plan the amount necessary to reflect 
        the increase in actuarial value of the plan required by reason 
        of this subsection.
    ``(e) Rules for Undocumented Aliens.--
            ``(1) In general.--In the case of an individual who is 
        undocumented alien--
                    ``(A) no cost-sharing reduction under this 
                subsection shall apply with respect to any item or 
                service provided to the individual; and
                    ``(B) the individual shall not be taken into 
                account in determining the family size involved but the 
                individual's modified gross income shall be taken into 
                account in determining household income.
            ``(2) Identification requirement.--An individual shall be 
        treated as an undocumented alien unless the information 
        required under section 2238(b)(2) of the Social Security Act 
        has been provided with respect to such individual.
    ``(f) Definitions and Special Rules.--In this section:
            ``(1) In general.--Any term used in this section which is 
        also used in section 36B of the Internal Revenue Code of 1986 
        shall have the meaning given such term by such section.
            ``(2) Limitations on subsidy.--No subsidy shall be allowed 
        under this section with respect to coverage for any month if 
        such month would not be treated as a coverage month under 
        section 36B(c)(2) of such Code.

``SEC. 2248. ADVANCE DETERMINATION AND PAYMENT OF PREMIUM CREDITS AND 
              COST-SHARING SUBSIDIES.

    ``(a) In General.--The Secretary, in consultation with the 
Secretary of the Treasury, shall establish a program under which--
            ``(1) upon request of an exchange, advance determinations 
        are made under section 2238 with respect to the income 
        eligibility of individuals enrolling in a qualified health 
        benefits plan in the individual market through the exchange for 
        the credit allowable under section 36B of the Internal Revenue 
        Code of 1986 and the cost-sharing subsidy under section 2247;
            ``(2) the Secretary notifies the exchange and the Secretary 
        of the Treasury of the advance determinations; and
            ``(3) the Secretary of the Treasury makes advance payments 
        of such credit or subsidy to the offerors of the qualified 
        health benefits plans in order to reduce the premiums payable 
        by individuals eligible for such credit.
    ``(b) Advance Determinations.--
            ``(1) In general.--The Secretary shall provide under the 
        program established under subsection (a) that advance 
        determination of eligibility with respect to any individual 
        shall be made--
                    ``(A) during the annual open enrollment period 
                applicable to the individual (or such other enrollment 
                period as may be specified by the Secretary); and
                    ``(B) on the basis of the individual's household 
                income for the second taxable year preceding the 
                taxable year in which enrollment through such 
                enrollment period first takes effect.
            ``(2) Changes in circumstances.--The Secretary shall 
        provide procedures for making advance determinations on the 
        basis of information other than that described in paragraph 
        (1)(B) in cases where information included with an application 
        form demonstrates substantial changes in income, changes in 
        family size or other household circumstances, change in filing 
        status, the filing of an application for unemployment benefits, 
        or other significant changes affecting eligibility, including--
                    ``(A) allowing an individual claiming a decrease of 
                20 percent or more in income, or filing an application 
                for unemployment benefits, to have eligibility for the 
                credit determined on the basis of household income for 
                a later period or on the basis of the individual's 
                estimate of such income for the taxable year; and
                    ``(B) the determination of household income in 
                cases where the taxpayer was not required to file a 
                return of tax imposed by this chapter for the second 
                preceding taxable year.
    ``(c) Payment of Premium Credits.--
            ``(1) In general.--The Secretary shall notify the Secretary 
        of the Treasury and the exchange through which the individual 
        is enrolling of the advance determination under section 2238.
            ``(2) Premium credit.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall make the advance payment under this section of 
                any credit allowed under section 36B of the Internal 
                Revenue Code of 1986 to the offeror of a qualified 
                health benefits plan on a monthly basis (or such other 
                periodic basis as the Secretary may provide).
                    ``(B) Offeror responsibilities.--An offeror of a 
                qualified health benefits plan receiving an advance 
                payment with respect to an individual enrolled in the 
                plan shall--
                            ``(i) reduce the premium charged the 
                        insured for any period by the amount of the 
                        advance payment for the period;
                            ``(ii) notify the exchange and the 
                        Secretary of such reduction; and
                            ``(iii) in the case of any nonpayment of 
                        premiums by the insured--
                                    ``(I) notify the Secretary of such 
                                nonpayment; and
                                    ``(II) allow a 3-month grace period 
                                for nonpayment of premiums before 
                                discontinuing coverage.
    ``(d) Coordination With Verification of Lawful Presence.--No 
advance payment shall be made under this section unless there has been 
a verification under section 2238 of the individual's citizenship or 
nationality or lawful presence in the United States.''.

SEC. 1207. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR 
              CERTAIN PROGRAMS.

    (a) Disclosure of Taxpayer Return Information and Social Security 
Numbers.--
            (1) Taxpayer return information.--Subsection (l) of section 
        6103 of the Internal Revenue Code of 1986 is amended by adding 
        at the end the following new paragraph:
            ``(21) Disclosure of return information to carry out 
        eligibility requirements for certain programs.--
                    ``(A) In general.--The Secretary, upon written 
                request from the Secretary of Health and Human 
                Services, shall disclose to officers, employees, and 
                contractors of the Department of Health and Human 
                Services return information of any taxpayer whose 
                income is relevant in determining any credit under 
                section 36B or any cost-sharing subsidy under section 
                2247 of the Social Security Act or eligibility for 
                participation in a State medicaid program under title 
                XIX of such Act, a State's children's health insurance 
                program under title XXI of such Act, or a basic health 
                program under section 2228 of such Act. Such return 
                information shall be limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer,
                            ``(iii) the number of individuals for whom 
                        a deduction is allowed under section 151 with 
                        respect to the taxpayer (including the taxpayer 
                        and the taxpayer's spouse),
                            ``(iv) the modified gross income (as 
                        defined in section 36B) of such taxpayer and 
                        each of the other individuals included under 
                        clause (iii),
                            ``(v) such other information as is 
                        prescribed by the Secretary by regulation as 
                        might indicate whether the taxpayer is eligible 
                        for such credit or subsidy (and the amount 
                        thereof), and
                            ``(vi) the taxable year with respect to 
                        which the preceding information relates or, if 
                        applicable, the fact that such information is 
                        not available.
                    ``(B) Information to exchange and state agencies.--
                The Secretary of Health and Human Services may disclose 
                to an exchange established under title XXII of the 
                Social Security Act or its contractors, or to a State 
                agency administering a State program described in 
                subparagraph (A) or its contractors, any inconsistency 
                between the information provided by the exchange or 
                State agency to the Secretary and the information 
                provided to the Secretary under subparagraph (A).
                    ``(C) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) or (B) may be used by officers, 
                employees, and contractors of the Department of Health 
                and Human Services, an exchange, or a State agency only 
                for the purposes of, and to the extent necessary in--
                            ``(i) establishing eligibility for 
                        participation in the exchange, and verifying 
                        the appropriate amount of, any credit or 
                        subsidy described in subparagraph (A),
                            ``(ii) determining eligibility for 
                        participation in the State programs described 
                        in subparagraph (A).''.
            (2) Social security numbers.--Section 205(c)(2)(C) of the 
        Social Security Act is amended by adding at the end the 
        following new clause:
                            ``(x) The Secretary of Health and Human 
                        Services, and the exchanges established under 
                        title XXII, are authorized to collect and use 
                        the names and social security account numbers 
                        of individuals as required to administer the 
                        provisions of, and the amendments made by, 
                        America's Healthy Future Act of 2009.''.
    (b) Confidentiality and Disclosure.--Paragraph (3) of section 
6103(a) of such Code is amended by striking ``or (20)'' and inserting 
``(20), or (21)''.
    (c) Procedures and Recordkeeping Related to Disclosures.--Paragraph 
(4) of section 6103(p) of such Code is amended--
            (1) by inserting ``, or any entity described in subsection 
        (l)(21),'' after ``or (20)'' in the matter preceding 
        subparagraph (A),
            (2) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
            (3) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (20)'' both places it appears in the 
        matter after subparagraph (F).
    (d) Unauthorized Disclosure or Inspection.--Paragraph (2) of 
section 7213(a) of such Code is amended by striking ``or (20)'' and 
inserting ``(20), or (21)''.

SEC. 1208. PREMIUM CREDIT AND SUBSIDY REFUNDS AND PAYMENTS DISREGARDED 
              FOR FEDERAL AND FEDERALLY-ASSISTED PROGRAMS.

    For purposes of determining the eligibility of any individual for 
benefits or assistance, or the amount or extent of benefits or 
assistance, under any Federal program or under any State or local 
program financed in whole or in part with Federal funds--
            (1) any credit or refund allowed or made to any individual 
        by reason of section 36B of the Internal Revenue Code of 1986 
        (as added by section 1205) shall not be taken into account as 
        income and shall not be taken into account as resources for the 
        month of receipt and the following 2 months; and
            (2) any cost-sharing subsidy payment or advance payment of 
        the credit allowed under such section 36B that is made under 
        section 2247 or 2248 of the Social Security Act (as added by 
        section 1206) shall be treated as made to the qualified health 
        benefits plan in which an individual is enrolled and not to 
        that individual.

SEC. 1209. FAIL-SAFE MECHANISM TO PREVENT INCREASE IN FEDERAL BUDGET 
              DEFICIT.

    (a) Estimate and Certification of Effect of Act on Budget 
Deficit.--
            (1) In general.--The President shall include in the 
        submission under section 1105 of title 31, United States Code, 
        of the budget of the United States Government for fiscal year 
        2013 and each fiscal year thereafter an estimate of the 
        budgetary effects for the fiscal year of the provisions of (and 
        the amendments made by) this Act, based on the information 
        available as of the date of such submission.
            (2) Certification.--The President shall include with the 
        estimate under paragraph (1) for any fiscal year a 
        certification as to whether the sum of the decreases in 
        revenues and increases in outlays for the fiscal year by reason 
        of the provisions of (and the amendments made by) this Act 
        exceed (or do not exceed) the sum of the increases in revenues 
        and decreases in outlays for the fiscal year by reason of the 
        provisions and amendments.
    (b) Effect of Deficit.--If the President certifies an excess under 
subsection (a)(2) for any fiscal year--
            (1) the President shall include with the certification the 
        percentage by which the credits allowable under section 36B of 
        the Internal Revenue Code of 1986 and the cost-sharing 
        subsidies under section 2247 of the Social Security Act must be 
        reduced for plan years beginning during such fiscal year such 
        that there is an aggregate decrease in the amount of such 
        credits and subsidies equal to the amount of such excess; and
            (2) the President shall instruct the Secretary of Health 
        and Human Services and the Secretary of the Treasury to reduce 
        such credits and subsidies for such plan years by such 
        percentage for purposes of applying section 36B(b)(4) of such 
        Code and section 2247(c)(3) of such Act.

                 Subpart B--Credit for Small Employers

SEC. 1221. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL 
              BUSINESSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-related 
credits) is amended by inserting after section 45Q the following:

``SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EMPLOYERS.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
eligible small employer, the small employer health insurance credit 
determined under this section for any taxable year in the credit period 
is the amount determined under subsection (b).
    ``(b) Health Insurance Credit Amount.--Subject to subsection (c), 
the amount determined under this subsection with respect to any 
eligible small employer is equal to 50 percent (35 percent in the case 
of a tax-exempt eligible small employer) of the lesser of--
            ``(1) the aggregate amount of nonelective contributions the 
        employer made on behalf of its employees during the taxable 
        year under the arrangement described in subsection (d)(4) for 
        premiums for qualified health benefits plans offered by the 
        employer to its employees through an exchange, or
            ``(2) the aggregate amount of nonelective contributions 
        which the employer would have made during the taxable year 
        under the arrangement if each employee taken into account under 
        paragraph (1) had enrolled in a qualified health benefits plan 
        which had a premium equal to the average premium (as determined 
        by the Secretary of Health and Human Services) for the small 
        group market in the exchange through which the employee is 
        eligible for coverage.
In the case of a taxable year beginning in 2013, the credit determined 
under this section shall be determined only with respect to premiums 
for coverage after June 30, 2013.
    ``(c) Limitations on Credit.--
            ``(1) Phaseout of credit amount based on number of 
        employees and average wages.--The amount of the credit 
        determined under subsection (b) without regard to this 
        subsection shall be reduced (but not below zero) by the sum of 
        the following amounts:
                    ``(A) Such amount multiplied by a fraction the 
                numerator of which is the total number of full-time 
                equivalent employees of the employer in excess of 10 
                and the denominator of which is 15.
                    ``(B) Such amount multiplied by a fraction the 
                numerator of which is the average annual wages of the 
                employer in excess of the dollar amount in effect under 
                subsection (d)(3)(B) and the denominator of which is 
                $20,000.
            ``(2) State failure to adopt insurance rating reforms.--No 
        credit shall be determined under this section with respect to 
        contributions by the employer for any qualified health benefits 
        plans purchased through an exchange for any month of coverage 
        before the first month the State establishing the exchange has 
        in effect the insurance rating reforms described in subtitle A 
        of title XXII of the Social Security Act.
    ``(d) Eligible Small Employer.--For purposes of this section--
            ``(1) In general.--The term `eligible small employer' 
        means, with respect to any taxable year, an employer--
                    ``(A) which has no more than 25 full-time 
                equivalent employees for the taxable year,
                    ``(B) the average annual wages of which do not 
                exceed an amount equal to the amount in effect under 
                paragraph (3)(B) for the taxable year plus $20,000, and
                    ``(C) which has in effect an arrangement described 
                in paragraph (4).
            ``(2) Full-time equivalent employees.--
                    ``(A) In general.--The term `full-time equivalent 
                employees' means a number of employees equal to the 
                number determined by dividing--
                            ``(i) the total number of hours for which 
                        wages were paid by the employer to employees 
                        during the taxable year, by
                            ``(ii) 2,080.
                Such number shall be rounded to the next lowest whole 
                number if not otherwise a whole number.
                    ``(B) Excess hours not counted.--If an employee 
                works in excess of 2,080 hours during any taxable year, 
                such excess shall not be taken into account under 
                subparagraph (A).
                    ``(C) Special rules.--The Secretary shall prescribe 
                such regulations, rules, and guidance as may be 
                necessary to apply this paragraph to employees who are 
                not compensated on an hourly basis.
            ``(3) Average annual wages.--
                    ``(A) In general.--The average annual wages of an 
                eligible small employer for any taxable year is the 
                amount determined by dividing--
                            ``(i) the aggregate amount of wages which 
                        were paid by the employer to employees during 
                        the taxable year, by
                            ``(ii) the number of full-time equivalent 
                        employees of the employee determined under 
                        paragraph (2) for the taxable year.
                Such amount shall be rounded to the next lowest 
                multiple of $1,000 if not otherwise such a multiple.
                    ``(B) Dollar amount.--For purposes of paragraph 
                (1)(B)--
                            ``(i) 2010.--The dollar amount in effect 
                        under this paragraph for taxable years 
                        beginning in 2010 is $20,000.
                            ``(ii) Subsequent years.--In the case of a 
                        taxable year beginning in a calendar year after 
                        2010, the dollar amount in effect under this 
                        paragraph shall be equal to $20,000, multiplied 
                        by the cost-of-living adjustment determined 
                        under section 1(f)(3) for the calendar year, 
                        determined by substituting `calendar year 2009' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
            ``(4) Contribution arrangement.--An arrangement is 
        described in this paragraph if it requires an eligible small 
        employer to make a nonelective contribution on behalf of each 
        employee who enrolls in a qualified health benefits plan 
        offered to employees by the employer through an exchange in an 
        amount equal to a uniform percentage (not less than 50 percent) 
        of the premium cost of the qualified health benefits plan.
            ``(5) Seasonal worker hours and wages not counted.--For 
        purposes of this subsection--
                    ``(A) In general.--The number of hours worked by, 
                and wages paid to, a seasonal worker of an employer 
                shall not be taken into account in determining the 
                full-time equivalent employees and average annual wages 
                of the employer.
                    ``(B) Definition of seasonal worker.--The term 
                `seasonal worker' means an individual who performs 
                labor or services on a seasonal basis where, 
                ordinarily, the employment pertains to or is of the 
                kind exclusively performed at certain seasons or 
                periods of the year and which, from its nature, may not 
                be continuous or carried on throughout the year.
    ``(e) Other Rules and Definitions.--For purposes of this section--
            ``(1) Employee.--
                    ``(A) Certain employees excluded.--The term 
                `employee' shall not include--
                            ``(i) an employee within the meaning of 
                        section 401(c)(1),
                            ``(ii) any 2-percent shareholder (as 
                        defined in section 1372(b)) of an eligible 
                        small business which is an S corporation,
                            ``(iii) any 5-percent owner (as defined in 
                        section 416(i)(1)(B)(i)) of an eligible small 
                        business, or
                            ``(iv) any individual who bears any of the 
                        relationships described in subparagraphs (A) 
                        through (G) of section 152(d)(2) to, or is a 
                        dependent described in section 152(d)(2)(H) of, 
                        an individual described in clause (i), (ii), or 
                        (iii).
                    ``(B) Leased employees.--The term `employee' shall 
                include a leased employee within the meaning of section 
                414(n).
            ``(2) Credit period.--The term `credit period' means, with 
        respect to any eligible small employer, the 2-consecutive-
        taxable year period beginning with the 1st taxable year in 
        which the employer (or any predecessor) offers 1 or more 
        qualified health benefits plans to its employees through an 
        exchange. If no credit is allowed to an employer (or 
        predecessor) under this section by reason of subsection (c)(2) 
        (relating to failure by States to adopt insurance rating 
        reforms), the credit period with respect to the employer shall 
        not begin until the 1st taxable year following the taxable year 
        in which the State has in effect the insurance rating reforms 
        described in such subsection.
            ``(3) Nonelective contribution.--The term `nonelective 
        contribution' means an employer contribution other than an 
        employer contribution pursuant to a salary reduction 
        arrangement.
            ``(4) Wages.--The term `wages' has the meaning given such 
        term by section 3121(a) (determined without regard to any 
        dollar limitation contained in such section).
            ``(5) Aggregation and other rules made applicable.--
                    ``(A) Aggregation rules.--All employers treated as 
                a single employer under subsection (b), (c), (m), or 
                (o) of section 414 shall be treated as a single 
                employer for purposes of this section.
                    ``(B) Other rules.--Rules similar to the rules of 
                subsections (c), (d), and (e) of section 52 shall 
                apply.
    ``(f) Credit Made Available to Tax-exempt Eligible Small 
Employers.--
            ``(1) In general.--In the case of a tax-exempt eligible 
        small employer, there shall be treated as a credit allowable 
        under subpart C (and not allowable under this subpart) the 
        lesser of-- --
                    ``(A) the amount of the credit determined under 
                this section with respect to such employer, or
                    ``(B) the amount of the payroll taxes of the 
                employer during the calendar year in which the taxable 
                year begins.
            ``(2) Tax-exempt eligible small employer.--For purposes of 
        this section, the term `tax-exempt eligible small employer' 
        means an eligible small employer which is any organization 
        described in section 501(c) which is exempt from taxation under 
        section 501(a).
            ``(3) Payroll taxes.--For purposes of this subsection--
                    ``(A) In general.--The term `payroll taxes' means--
                            ``(i) amounts required to be withheld from 
                        the employees of the tax-exempt eligible small 
                        employer under section 3401(a),
                            ``(ii) amounts required to be withheld from 
                        such employees under section 3101(b), and
                            ``(iii) amounts of the taxes imposed on the 
                        tax-exempt eligible small employer under 
                        section 3111(b).
                    ``(B) Special rule.--A rule similar to the rule of 
                section 24(d)(2)(C) shall apply for purposes of 
                subparagraph (A).
    ``(g) Application of Section for Calendar Years 2011 and 2012.--In 
the case of any taxable year beginning in 2011 or 2012, the following 
modifications to this section shall apply in determining the amount of 
the credit under subsection (a):
            ``(1) No credit period required.--The credit shall be 
        determined without regard to whether the taxable year is in a 
        credit period and for purposes of applying this section to 
        taxable years beginning after 2012, no credit period shall be 
        treated as beginning with a taxable year beginning before 2013.
            ``(2) Amount of credit.--The amount of the credit 
        determined under subsection (b) shall be determined--
                    ``(A) by substituting `35 percent (25 percent in 
                the case of a tax-exempt eligible small employer)' for 
                `50 percent (35 percent in the case of a tax-exempt 
                eligible small employer)',
                    ``(B) by reference to an eligible small employer's 
                nonelective contributions for premiums paid for health 
                insurance coverage (within the meaning of section 
                9832(b)(1)) of an employee, and
                    ``(C) by substituting for the average premium 
                determined under subsection (b)(2) the amount the 
                Secretary of Health and Human Services determines is 
                the average premium for the small group market in the 
                State in which the employer is offering health 
                insurance coverage (or for such area within the State 
                as is specified by the Secretary).
            ``(3) State rating reform limitation.--The limitation of 
        paragraph (2) of subsection (c) shall not apply.
            ``(4) Contribution arrangement.--An arrangement shall not 
        fail to meet the requirements of subsection (d)(4) solely 
        because it provides for the offering of insurance outside of an 
        exchange.
    ``(h) Insurance Definitions.--Any term used in this section which 
is also used in title XXII of the Social Security Act shall have the 
meaning given such term by such title.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section, 
including regulations to prevent the avoidance of the 2-year limit on 
the credit period through the use of successor entities and the 
avoidance of the limitations under paragraphs (1) and (2) of subsection 
(c) through the use of multiple entities.''.
    (b) Credit to Be Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (34), 
by striking the period at the end of paragraph (35) and inserting ``, 
plus'', and by inserting after paragraph (35) the following:
            ``(36) the small employer health insurance credit 
        determined under section 45R.''.
    (c) Credit Allowed Against Alternative Minimum Tax.--Section 
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified 
credits) is amended by redesignating clauses (vi), (vii), and (viii) as 
clauses (vii), (viii), and (ix), respectively, and by inserting after 
clause (v) the following new clause:
                            ``(vi) the credit determined under section 
                        45R,''.
    (d) Disallowance of Deduction for Certain Expenses for Which Credit 
Allowed.--
            (1) In general.--Section 280C of the Internal Revenue Code 
        of 1986 (relating to disallowance of deduction for certain 
        expenses for which credit allowed), as amended by section 
        1205(b), is amended by adding at the end the following new 
        subsection:
    ``(h) Credit for Employee Health Insurance Expenses of Small 
Employers.--No deduction shall be allowed for that portion of the 
premiums for qualified health benefits plans (as defined in section 
2201(b) of the Social Security Act) paid by an employer which is equal 
to the amount of the credit determined under section 45R(a).''.
            (2) Deduction for expiring credits.--Section 196(c) of such 
        Code is amended by striking ``and'' at the end of paragraph 
        (12), by striking the period at the end of paragraph (13) and 
        inserting ``, and'', and by adding at the end the following new 
        paragraph:
            ``(14) the small employer health insurance credit 
        determined under section 45R(a).''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

``Sec. 45R. Employee health insurance expenses of small employers.''.
    (f) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to amounts paid or incurred in taxable years beginning 
        after December 31, 2010.
            (2) Minimum tax.--The amendments made by subsection (c) 
        shall apply to credits determined under section 45R of the 
        Internal Revenue Code of 1986 in taxable years beginning after 
        December 31, 2010, and to carrybacks of such credits.

                   Subtitle D--Shared Responsibility

                   PART I--INDIVIDUAL RESPONSIBILITY

SEC. 1301. EXCISE TAX ON INDIVIDUALS WITHOUT ESSENTIAL HEALTH BENEFITS 
              COVERAGE.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

    ``CHAPTER 48--MAINTENANCE OF ESSENTIAL HEALTH BENEFITS COVERAGE

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

``SEC. 5000A. FAILURE TO MAINTAIN ESSENTIAL HEALTH BENEFITS COVERAGE.

    ``(a) Requirement to Maintain Essential Health Benefits Coverage.--
If an individual is an applicable individual for any month beginning 
after June 30, 2013, the individual is required to be covered by 
essential health benefits coverage for such month.
    ``(b) Imposition of Tax.--
            ``(1) In general.--If an applicable individual fails to 
        meet the requirement of subsection (a) for 1 or more months 
        during any calendar year beginning after 2013, then, except as 
        provided in subsection (d), there is hereby imposed a tax with 
        respect to the individual in the amount determined under 
        subsection (c).
            ``(2) Inclusion with income tax return.--Any tax imposed by 
        this section with respect to any month shall be included with a 
        taxpayer's return of tax imposed by chapter 1 for the taxable 
        year which includes such month.
            ``(3) Liability for tax.--If an individual with respect to 
        whom tax is imposed by this section for any month--
                    ``(A) is a dependent (as defined in section 152) of 
                another taxpayer for the other taxpayer's taxable year 
                including such month, such other taxpayer shall be 
                liable for such tax, or
                    ``(B) files a joint return for the taxable year 
                including such month, such individual and the spouse of 
                such individual shall be jointly liable for such tax.
    ``(c) Amount of Tax.--
            ``(1) In general.--The tax determined under this subsection 
        for any month with respect to any individual is an amount equal 
        to \1/12\ of the applicable dollar amount for the calendar 
        year.
            ``(2) Dollar limitation.--The amount of the tax imposed by 
        this section on any taxpayer for any taxable year with respect 
        to all individuals for whom the taxpayer is liable under 
        subsection (b)(3) shall not exceed an amount equal to twice the 
        applicable dollar amount for the calendar year with or within 
        which the taxable year ends.
            ``(3) Applicable dollar amount.--For purposes of paragraph 
        (1)--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the applicable dollar amount is $750.
                    ``(B) Phase in.--The applicable dollar amount is 
                $200 for 2014, $400 for 2015, and $600 for 2016.
                    ``(C) Indexing of amount.--In the case of any 
                calendar year beginning after 2017, the applicable 
                dollar amount shall be equal to $750, increased by an 
                amount equal to--
                            ``(i) $750, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year, determined by substituting 
                        `calendar year 2016' for `calendar year 1992' 
                        in subparagraph (B) thereof.
                If the amount of any increase under clause (i) is not a 
                multiple of $50, such increase shall be rounded to the 
                next lowest multiple of $50.
            ``(4) Terms relating to income and families.--For purposes 
        of this section--
                    ``(A) Family size.--The family size involved with 
                respect to any taxpayer shall be equal to the number of 
                individuals for whom the taxpayer is allowed a 
                deduction under section 151 (relating to allowance of 
                deduction for personal exemptions) for the taxable 
                year.
                    ``(B) Household income.--The term `household 
                income' means, with respect to any taxpayer, an amount 
                equal to the sum of--
                            ``(i) the modified gross income of the 
                        taxpayer, plus
                            ``(ii) the aggregate modified gross incomes 
                        of all other individuals taken into account in 
                        determining the taxpayer's family size under 
                        paragraph (1).
                    ``(C) Modified gross income.--The term `modified 
                gross income' means gross income--
                            ``(i) decreased by the amount of any 
                        deduction allowable under paragraphs (1), (3), 
                        or (4) of section 62(a),
                            ``(ii) increased by the amount of interest 
                        received or accrued during the taxable year 
                        which is exempt from tax imposed by this 
                        chapter, and
                            ``(iii) determined without regard to 
                        sections 911, 931, and 933.
                    ``(D) Poverty line.--
                            ``(i) In general.--The term `poverty line' 
                        has the meaning given that term in section 
                        2110(c)(5) of the Social Security Act (42 
                        U.S.C. 1397jj(c)(5)).
                            ``(ii) Poverty line used.--In the case of 
                        any taxable year ending with or within a 
                        calendar year, the poverty line used shall be 
                        the most recently published poverty line as of 
                        the 1st day of the such calendar year.
    ``(d) Applicable Individual.--For purposes of this section--
            ``(1) In general.--The term `applicable individual' means, 
        with respect to any month, any individual who has attained the 
        age of 18 before the beginning of the month other than an 
        individual described in paragraph (2) or (3).
            ``(2) Religious exemptions.--
                    ``(A) Religious conscience exemption.--Such term 
                shall not include any individual for any month if such 
                individual has in effect an exemption under section 
                2236(f) of the Social Security Act which certifies that 
                such individual is a member of a recognized religious 
                sect or division thereof described in section 
                1402(g)(1) and an adherent of established tenets or 
                teachings of such sect or division as described in such 
                section.
                    ``(B) Health care sharing ministry.--
                            ``(i) In general.--Such term shall not 
                        include any individual for any month if such 
                        individual is a member of a health care sharing 
                        ministry for the month.
                            ``(ii) Health care sharing ministry.--The 
                        term `health care sharing ministry' means an 
                        organization--
                                    ``(I) which is described in section 
                                501(c)(3) and is exempt from taxation 
                                under section 501(a),
                                    ``(II) members of which share a 
                                common set of ethical or religious 
                                beliefs and share medical expenses 
                                among members in accordance with those 
                                beliefs and without regard to the State 
                                in which a member resides or is 
                                employed,
                                    ``(III) members of which retain 
                                membership even after they develop a 
                                medical condition,
                                    ``(IV) which (or a predecessor of 
                                which) has been in existence at all 
                                times since December 31, 1999, and 
                                medical expenses of its members have 
                                been shared during the entire period of 
                                its existence, and
                                    ``(V) which conducts an annual 
                                audit which is performed by an 
                                independent certified public accounting 
                                firm in accordance with generally 
                                accepted accounting principles and 
                                which is made available to the public 
                                upon request.
            ``(3) Undocumented aliens.--Such term shall not include an 
        individual for any month if for the month the individual is not 
        a citizen or national of the United States, an alien lawfully 
        admitted to the United States for permanent residence, or an 
        alien lawfully present in the United States.
    ``(e) Exemptions From Tax.--No tax shall be imposed under 
subsection (a) with respect to--
            ``(1) Months during short coverage gaps.--Any month the 
        last day of which occurred during a period in which the 
        applicable individual was not covered by essential health 
        benefits coverage for a period of less than 3 months.
            ``(2) Individuals who cannot afford coverage.--
                    ``(A) In general.--Any applicable individual if the 
                applicable individual's required contribution for a 
                calendar year exceeds 8 percent of such individual's 
                household income for the second taxable year preceding 
                the taxable year described in subsection (b)(2). For 
                purposes of applying this subparagraph, the taxpayer's 
                household income shall be increased by any exclusion 
                from gross income for any portion of the required 
                contribution made through a salary reduction 
                arrangement.
                    ``(B) Required contribution.--For purposes of this 
                paragraph, the term `required contribution' means--
                            ``(i) in the case of an individual eligible 
                        to purchase health insurance coverage through 
                        an employer other than through an exchange, the 
                        portion of the annual premium which would be 
                        paid by the individual (without regard to 
                        whether paid through salary reduction or 
                        otherwise) for health insurance coverage which 
                        is the lowest cost coverage offered through the 
                        employer, or
                            ``(ii) in the case of any individual not 
                        described in clause (i), the annual premium for 
                        the lowest cost bronze plan available in the 
                        individual market through the exchange in the 
                        State in which the individual resides (without 
                        regard to whether the individual is eligible to 
                        purchase a qualified health benefits plan 
                        through the exchange), reduced by the amount of 
                        the credit allowable under section 36B for the 
                        taxable year (determined as if the individual 
                        was covered by a qualified health benefits plan 
                        offered through the exchange for the entire 
                        taxable year).
                    ``(C) Special rule for individuals eligible for 
                coverage through employee.--If an applicable individual 
                is eligible for coverage through an employer by reason 
                of a relationship to an employee, the determination 
                under subparagraph (B)(i) shall be made by reference to 
                the affordability of the coverage to the employee.
                    ``(D) Indexing.--In the case of plan years 
                beginning in any calendar year after 2013, subparagraph 
                (A) shall be applied by substituting for `8 percent' 
                the percentage the Secretary of Health and Human 
                Services determines reflects the excess of the rate of 
                premium growth between the preceding calendar year and 
                2012 over the rate of income growth for such period.
            ``(3) Taxpayers with income under 100 percent of poverty 
        line.--Any applicable individual who has a household income for 
        the for the second taxable year preceding the taxable year 
        described in subsection (b)(2) which is less than 100 percent 
        of the poverty line for the size of the family involved 
        (determined in the same manner as under subsection (b)(4)).
            ``(4) Native americans.--Any applicable individual who is 
        an Indian as defined in section 4 of the Indian Health Care 
        Improvement Act.
            ``(5) Hardships.--Any applicable individual who is 
        determined by the Secretary to have suffered a hardship with 
        respect to the capability to obtain coverage under a qualified 
        health benefits plan.
    ``(f) Essential Health Benefits Coverage.--For purposes of this 
section--
            ``(1) In general.--The term `essential health benefits 
        coverage' means any of the following:
                    ``(A) Qualified health benefits plan coverage.--
                Coverage under a qualified health benefits plan.
                    ``(B) Grandfathered health benefits plan.--Coverage 
                under a grandfathered health benefits plan (as defined 
                in section 2221(c) of the Social Security Act).
                    ``(C) Employer-sponsored plan.--Coverage under an 
                eligible employer-sponsored plan.
                    ``(D) Medicare.--Coverage under part A of title 
                XVIII of the Social Security Act.
                    ``(E) Medicaid.--Coverage for medical assistance 
                under title XIX of the Social Security Act.
                    ``(F) Members of the armed forces and dependents 
                (including tricare).--Coverage under chapter 55 of 
                title 10, United States Code, including similar 
                coverage furnished under section 1781 of title 38 of 
                such Code.
                    ``(G) VA.--Coverage under the veteran's health care 
                program under chapter 17 of title 38, United States 
                Code, but only if the coverage for the individual 
                involved is determined by the Secretary of Health and 
                Human Services in coordination with the Secretary to be 
                not less than a level specified by the Secretary of 
                Health and Human Services, based on the individual's 
                priority for services as provided under section 1705(a) 
                of such title.
                    ``(H) Federal employees coverage.--Coverage under 
                the Federal employees health benefits program under 
                chapter 89 of title 5, United States Code.
                    ``(I) Other coverage.--Such other health benefits 
                coverage, such as a State health benefits risk pool or 
                coverage while incarcerated, as the Secretary of Health 
                and Human Services, in coordination with the Secretary, 
                recognizes for purposes of this subsection.
            ``(2) Eligible employer-sponsored plan.--The term `eligible 
        employer-sponsored plan' means, with respect to any employee, a 
        health benefits plan (other than a grandfathered health 
        benefits plan) offered by an employer to the employee, but only 
        if--
                    ``(A) in the case of a small employer, the plan is 
                a qualified health benefits plan, and
                    ``(B) in the case of a large employer plan, the 
                plan meets the requirements of section 2244 of the 
                Social Security Act.
            ``(3) Insurance-related terms.--Any term used in this 
        section which is also used in title XXII of the Social Security 
        Act shall have the same meaning as when used in such title.
    ``(g) Modifications of Subtitle F.--Notwithstanding any other 
provision of law--
            ``(1) Waiver of criminal and civil penalties and 
        interest.--In the case of any failure by a taxpayer to timely 
        pay any tax imposed by this section--
                    ``(A) such taxpayer shall not be subject to any 
                criminal prosecution or penalty with respect to such 
                failure, and
                    ``(B) no penalty, addition to tax, or interest 
                shall be imposed with respect to such failure or such 
                tax.
            ``(2) Limited collection actions permitted.--In the case of 
        the assessment of any tax imposed by this section, the 
        Secretary shall not take any action with respect to the 
        collection of such tax other than--
                    ``(A) giving notice and demand for such tax under 
                section 6303,
                    ``(B) crediting under section 6402(a) the amount of 
                any overpayment of the taxpayer against such tax, and
                    ``(C) offsetting any payment owed by any Federal 
                agency to the taxpayer against such tax under the 
                Treasury offset program.''.
    (b) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986 is amended by inserting after the 
item relating to chapter 47 the following new item:

   ``Chapter 48--Maintenance of Essential Health Benefits Coverage''.

    (c) Study on Affordable Coverage.--
            (1) Study and report.--
                    (A) In general.--The Comptroller General shall 
                conduct a study on the affordability of health 
                insurance coverage, including--
                            (i) the impact of the tax credit for 
                        qualified health insurance coverage of 
                        individuals under section 36B of the Internal 
                        Revenue Code of 1986 and the tax credit for 
                        employee health insurance expenses of small 
                        employers under section 45R of such Code on 
                        maintaining and expanding the health insurance 
                        coverage of individuals,
                            (ii) the availability of affordable health 
                        benefits plans, and
                            (iii) the ability of individuals to 
                        maintain essential health benefits coverage (as 
                        defined in section 5000A(f) of the Internal 
                        Revenue Code of 1986).
                    (B) Report.--Not later than February 1, 2014, the 
                Comptroller General shall submit to the appropriate 
                committees of Congress a report on the study conducted 
                under subparagraph (A), together with legislative 
                recommendations relating to the matters studied under 
                such subparagraph.
            (2) Congressional consideration of recommendations.--
                    (A) Committee consideration of proposal; discharge; 
                contingency for introduction.--Not later than April 1, 
                2014, the appropriate committees of Congress shall 
                report legislation implementing the recommendations 
                contained in the report described in paragraph (1)(B). 
                If, with respect to the House involved, any such 
                committee has not reported such legislation by such 
                date, such committees shall be deemed to be discharged 
                from further consideration of the proposal and any 
                member of the House of Representatives or the Senate, 
                respectively, may introduce legislation implementing 
                the recommendations contained in the proposal and such 
                legislation shall be placed on the appropriate calendar 
                of the House involved.
                    (B) Expedited procedure.--
                            (i) Consideration.--If legislation is 
                        reported out of committee or legislation is 
                        introduced under subparagraph (A), not later 
                        than 15 calendar days after the date on which a 
                        committee has been or could have been 
                        discharged from consideration of such 
                        legislation or such legislation is introduced, 
                        the Speaker of the House of Representatives, or 
                        the Speaker's designee, or the majority leader 
                        of the Senate, or the leader's designee, shall 
                        move to proceed to the consideration of the 
                        legislation. It shall also be in order for any 
                        member of the Senate or the House of 
                        Representatives, respectively, to move to 
                        proceed to the consideration of the legislation 
                        at any time after the conclusion of such 15-day 
                        period. All points of order against the 
                        legislation (and against consideration of the 
                        legislation) with the exception of points of 
                        order under the Congressional Budget Act of 
                        1974 are waived. A motion to proceed to the 
                        consideration of the legislation is privileged 
                        in the Senate and highly privileged in the 
                        House of Representatives and is not debatable. 
                        The motion is not subject to amendment, to a 
                        motion to postpone consideration of the 
                        legislation, or to a motion to proceed to the 
                        consideration of other business. A motion to 
                        reconsider the vote by which the motion to 
                        proceed is agreed to or not agreed to shall not 
                        be in order. If the motion to proceed is agreed 
                        to, the Senate or the House of Representatives, 
                        as the case may be, shall immediately proceed 
                        to consideration of the legislation in 
                        accordance with the Standing Rules of the 
                        Senate or the House of Representatives, as the 
                        case may be, without intervening motion, order, 
                        or other business, and the resolution shall 
                        remain the unfinished business of the Senate or 
                        the House of Representatives, as the case may 
                        be, until disposed of.
                            (ii) Consideration by other house.--If, 
                        before the passage by one House of the 
                        legislation that was introduced in such House, 
                        such House receives from the other House 
                        legislation as passed by such other House--
                                    (I) the legislation of the other 
                                House shall not be referred to a 
                                committee and shall immediately 
                                displace the legislation that was 
                                reported or introduced in the House in 
                                receipt of the legislation of the other 
                                House; and
                                    (II) the legislation of the other 
                                House shall immediately be considered 
                                by the receiving House under the same 
                                procedures applicable to legislation 
                                reported by or discharged from a 
                                committee or introduced under 
                                subparagraph (A).
                        Upon disposition of legislation that is 
                        received by one House from the other House, it 
                        shall no longer be in order to consider the 
                        legislation that was reported or introduced in 
                        the receiving House.
                            (iii) Senate limits on debate.--In the 
                        Senate, consideration of the legislation and on 
                        all debatable motions and appeals in connection 
                        therewith shall not exceed a total of 30 hours, 
                        which shall be divided equally between those 
                        favoring and those opposing the legislation. A 
                        motion further to limit debate on the 
                        legislation is in order and is not debatable. 
                        Any debatable motion or appeal is debatable for 
                        not to exceed 1 hour, to be divided equally 
                        between those favoring and those opposing the 
                        motion or appeal. All time used for 
                        consideration of the legislation, including 
                        time used for quorum calls and voting, shall be 
                        counted against the total 30 hours of 
                        consideration.
                            (iv) Consideration in conference.--
                        Immediately upon a final passage of the 
                        legislation that results in a disagreement 
                        between the two Houses of Congress with respect 
                        to the legislation, conferees shall be 
                        appointed and a conference convened. Not later 
                        than 15 days after the date on which conferees 
                        are appointed (excluding periods in which one 
                        or both Houses are in recess), the conferees 
                        shall file a report with the Senate and the 
                        House of Representatives resolving the 
                        differences between the Houses on the 
                        legislation. Notwithstanding any other rule of 
                        the Senate or the House of Representatives, it 
                        shall be in order to immediately consider a 
                        report of a committee of conference on the 
                        legislation filed in accordance with this 
                        subsection. Debate in the Senate and the House 
                        of Representatives on the conference report 
                        shall be limited to 10 hours, equally divided 
                        and controlled by the majority and minority 
                        leaders of the Senate or their designees and 
                        the Speaker of the House of Representatives and 
                        the minority leader of the House of 
                        Representatives or their designees. A vote on 
                        final passage of the conference report shall 
                        occur immediately at the conclusion or yielding 
                        back of all time for debate on the conference 
                        report.
                    (C) Rules of the senate and house of 
                representatives.--This paragraph is enacted by 
                Congress--
                            (i) as an exercise of the rulemaking power 
                        of the Senate and House of Representatives, 
                        respectively, and is deemed to be part of the 
                        rules of each House, respectively, but 
                        applicable only with respect to the procedure 
                        to be followed in that House in the case of 
                        legislation under this section, and it 
                        supersedes other rules only to the extent that 
                        it is inconsistent with such rules; and
                            (ii) with full recognition of the 
                        constitutional right of either House to change 
                        the rules (so far as they relate to the 
                        procedure of that House) at any time, in the 
                        same manner, and to the same extent as in the 
                        case of any other rule of that House.
            (3) Appropriate committees of congress.--In this 
        subsection, the term ``appropriate committees of Congress'' 
        means the Committee on Ways and Means, the Committee on 
        Education and Labor, and the Committee on Energy and Commerce 
        of the House of Representatives and the Committee on Finance 
        and the Committee on Health, Education, Labor and Pensions of 
        the Senate.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2012.

SEC. 1302. REPORTING OF HEALTH INSURANCE COVERAGE.

    (a) In General.--Part III of subchapter A of chapter 61 of the 
Internal Revenue Code of 1986 is amended by inserting after subpart C 
the following new subpart:

      ``Subpart D--Information Regarding Health Insurance Coverage

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

``SEC. 6055. REPORTING OF HEALTH INSURANCE COVERAGE.

    ``(a) In General.--Every person who provides essential health 
benefits coverage to an individual during a calendar year shall, at 
such time as the Secretary may prescribe, make a return described in 
subsection (b).
    ``(b) Form and Manner of Return.--
            ``(1) In general.--A return is described in this subsection 
        if such return--
                    ``(A) is in such form as the Secretary may 
                prescribe, and
                    ``(B) contains--
                            ``(i) the name, address and TIN of the 
                        primary insured and the name of each other 
                        individual obtaining coverage under the policy,
                            ``(ii) the dates during which such 
                        individual was covered under essential health 
                        benefits coverage during the calendar year,
                            ``(iii) the amount (if any) of any advance 
                        payment under section 2248 of the Social 
                        Security Act of any cost-sharing subsidy under 
                        section 2247 of such Act or of any premium 
                        credit under section 36B with respect to such 
                        coverage, and
                            ``(iv) such other information as the 
                        Secretary may require.
            ``(2) Information relating to employer-provided coverage.--
        If essential health benefits coverage provided to an individual 
        under subsection (a) consists of health insurance coverage of a 
        health insurance issuer provided through a group health plan of 
        an employer, a return described in this subsection shall 
        include--
                    ``(A) the name, address, and employer 
                identification number of the employer maintaining the 
                plan,
                    ``(B) the portion of the premium (if any) required 
                to be paid by the employer, and
                    ``(C) if the health insurance coverage is a 
                qualified health benefits plan in the small group 
                market offered through an exchange, such other 
                information as the Secretary may require for 
                administration of the credit under section 45R 
                (relating to credit for employee health insurance 
                expenses of small employers).
    ``(c) Statements to Be Furnished to Individuals With Respect to 
Whom Information Is Reported.--
            ``(1) In general.--Every person required to make a return 
        under subsection (a) shall furnish to each individual whose 
        name is required to be set forth in such return a written 
        statement showing--
                    ``(A) the name and address of the person required 
                to make such return and the phone number of the 
                information contact for such person, and
                    ``(B) the information required to be shown on the 
                return with respect to such individual.
            ``(2) Time for furnishing statements.--The written 
        statement required under paragraph (1) shall be furnished on or 
        before January 31 of the year following the calendar year for 
        which the return under subsection (a) was required to be made.
    ``(d) Coverage Provided by Governmental Units.--In the case of 
coverage provided by any governmental unit or any agency or 
instrumentality thereof, the officer or employee who enters into the 
agreement to provide such coverage (or the person appropriately 
designated for purposes of this section) shall make the returns and 
statements required by this section.
    ``(e) Essential Health Benefits Coverage.--For purposes of this 
section, the term `essential health benefits coverage' has the meaning 
given such term by section 5000A(f).''.
    (b) Assessable Penalties.--
            (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
        Revenue Code of 1986 (relating to definitions) is amended by 
        striking ``or'' at the end of clause (xxii), by striking 
        ``and'' at the end of clause (xxiii) and inserting ``or'', and 
        by inserting after clause (xxiii) the following new clause:
                            ``(xxiv) section 6055 (relating to returns 
                        relating to information regarding health 
                        insurance coverage), and''.
            (2) Paragraph (2) of section 6724(d) of such Code is 
        amended by striking ``or'' at the end of subparagraph (EE), by 
        striking the period at the end of subparagraph (FF) and 
        inserting ``, or'' and by inserting after subparagraph (FF) the 
        following new subparagraph:
                    ``(GG) section 6055(c) (relating to statements 
                relating to information regarding health insurance 
                coverage).''.
    (c) Conforming Amendment.--The table of subparts for part III of 
subchapter A of chapter 61 of such Code is amended by inserting after 
the item relating to subpart C the following new item:

    ``subpart d--information regarding health insurance coverage''.

    (d) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after 2012.

                    PART II--EMPLOYER RESPONSIBILITY

SEC. 1306. EMPLOYER SHARED RESPONSIBILITY REQUIREMENT.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following:

``SEC. 4980H. EMPLOYER RESPONSIBILITY TO PROVIDE HEALTH COVERAGE.

    ``(a) Imposition of Excise Tax.--If--
            ``(1) an applicable large employer fails to meet the health 
        insurance coverage requirements of subsection (c) with respect 
        to its full-time employees, and
            ``(2) any such full-time employee of the employer is 
        enrolled for any month during the period of such failure in a 
        qualified health benefits plan with respect to which an 
        applicable premium credit or cost-sharing subsidy is allowed or 
        paid with respect to the employee,
there is hereby imposed on such failure with respect to each such 
employee for each such month a tax in the amount determined under 
subsection (b).
    ``(b) Amount of Tax.--
            ``(1) In general.--The tax determined under this subsection 
        with respect to a failure involving an employee for any month 
        described in subsection (a)(2) shall be equal to \1/12\ of the 
        dollar amount which the Secretary of Health and Human Services 
        determines (on the basis of the most recent data available) is 
        equal to the sum of the average annual credit allowed under 
        section 36B and the average annual cost-sharing subsidy under 
        section 2247 of the Social Security Act for taxable years 
        beginning in the calendar year preceding the calendar year in 
        which such month occurs. In the case of a month occurring 
        during 2013, the Secretary shall determine the average annual 
        credit and subsidy on the basis of the aggregate amount of 
        credits and subsidies (expressed as an annual amount) for which 
        applicants were determined eligible during the initial open 
        enrollment period under section 2237(d)(2)(A) of the Social 
        Security Act.
            ``(2) Overall limitation.--
                    ``(A) In general.--The aggregate amount of tax 
                determined under paragraph (1) with respect to all 
                employees of an applicable large employer for any month 
                shall not exceed \1/12\ of the product of--
                            ``(i) $400, and
                            ``(ii) the average number of full-time 
                        employees of the employer on business days 
                        during the calendar year preceding the calendar 
                        year in which such month occurs (determined in 
                        the same manner as under subsection (d)(1)).
                    ``(B) Indexing.--In the case of any calendar year 
                after 2013, the $400 amount under subparagraph (A)(i) 
                shall be increased by an amount equal to the product 
                of--
                            ``(i) $400, and
                            ``(ii) the premium adjustment percentage 
                        (as defined in section 2242(c)(7) of the Social 
                        Security Act) for the calendar year.
                If the amount of any increase under this subparagraph 
                is not a multiple of $10, such increase shall be 
                rounded to the next lowest multiple of $10.
    ``(c) Health Insurance Coverage Requirements.--For purposes of this 
section--
            ``(1) In general.--An applicable large employer meets the 
        health insurance coverage requirements of this subsection if 
        the employer--
                    ``(A) in the case of an employer in the small group 
                market in a State, offers to its full-time employees 
                (and their dependents) the opportunity to enroll in a 
                qualified health benefits plan or a grandfathered 
                health benefits plan, and
                    ``(B) in the case of an employer in the large group 
                market in a State, offers to its full-time employees 
                (and their dependents) the opportunity to enroll in a 
                group health plan meeting the requirements of section 
                2244 of the Social Security Act or a grandfathered 
                health benefits plan.
            ``(2) Exception where coverage is unaffordable or fails to 
        provide minimum value.--An employer shall not be treated as 
        meeting the requirements of this subsection with respect to any 
        employee if--
                    ``(A) the employee is eligible for the credit 
                allowable under section 36B because the employee's 
                required contribution under the plan described in 
                paragraph (1) is determined to be unaffordable under 
                section 36B(c)(2)(C), or
                    ``(B) in the case of a plan (other than a qualified 
                health benefits plan) offered under paragraph (1), the 
                plan's share of the total allowed costs of benefits 
                provided under the plan is less than 65 percent of such 
                costs.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable large employer.--
                    ``(A) In general.--The term `applicable large 
                employer' means, with respect to a calendar year, an 
                employer who employed an average of at least 50 
                employees on business days during the preceding 
                calendar year.
                    ``(B) Rules for determining employer size.--For 
                purposes of this paragraph--
                            ``(i) Application of aggregation rule for 
                        employers.--All persons treated as a single 
                        employer under subsection (b), (c), (m), or (o) 
                        of section 414 of the Internal Revenue Code of 
                        1986 shall be treated as 1 employer.
                            ``(ii) Employers not in existence in 
                        preceding year.--In the case of an employer 
                        which was not in existence throughout the 
                        preceding calendar year, the determination of 
                        whether such employer is an applicable large 
                        employer shall be based on the average number 
                        of employees that it is reasonably expected 
                        such employer will employ on business days in 
                        the current calendar year.
                            ``(iii) Predecessors.--Any reference in 
                        this subsection to an employer shall include a 
                        reference to any predecessor of such employer.
            ``(2) Applicable premium credit and cost-sharing subsidy.--
        The term `applicable premium credit and cost-sharing subsidy' 
        means--
                    ``(A) any premium credit allowed under section 36B 
                (and any advance payment of the credit under section 
                2248 of the Social Security Act), and
                    ``(B) any cost-sharing subsidy payment under 
                section 2247 of such Act.
            ``(3) Full-time employee.--
                    ``(A) In general.--The term `full-time employee' 
                means an employee who is employed on average at least 
                30 hours per week.
                    ``(B) Special rules.--The Secretary shall prescribe 
                such regulations, rules, and guidance as may be 
                necessary to apply this paragraph to employees who are 
                not compensated on an hourly basis.
            ``(4) Other definitions.--Any term used in this section 
        which is also used in title XXII of the Social Security Act 
        shall have the same meaning as when used in such title.
            ``(5) Tax nondeductible.--For denial of deduction for the 
        tax imposed by this section, see section 275(a)(6).
    ``(e) Time for Payment of Tax.--The Secretary may provide for the 
payment of the tax imposed by this section on an annual, monthly, or 
other periodic basis as the Secretary may prescribe.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code is amended by adding at the end the following new item:

``Sec. 4980H. Employer responsibility to provide health coverage.''.
    (c) Study and Report of Effect of Tax on Workers' Wages.--
            (1) In general.--The Secretary of Labor shall conduct a 
        study to determine whether employees' wages are reduced by 
        reason of the application of the tax imposed under section 
        4980H of the Internal Revenue Code of 1986 (as added by the 
        amendments made by this section). The Secretary shall make such 
        determination on the basis of the National Compensation Survey 
        published by the Bureau of Labor Statistics.
            (2) Report.--The Secretary shall report the results of the 
        study under paragraph (1) to the Committee on Ways and Means of 
        the House of Representatives and to the Committee on Finance of 
        the Senate.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods beginning after June 30, 2013.

SEC. 1307. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart D of part III of subchapter A of chapter 
61 of the Internal Revenue Code of 1986, as added by section 1302, is 
amended by inserting after section 6055 the following new section:

``SEC. 6056. LARGE EMPLOYERS REQUIRED TO REPORT ON HEALTH INSURANCE 
              COVERAGE.

    ``(a) In General.--Every applicable large employer required to meet 
the requirements of section 4980H(c) with respect to its full-time 
employees during a calendar year shall, at such time as the Secretary 
may prescribe, make a return described in subsection (b).
    ``(b) Form and Manner of Return.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, date, and employer identification 
                number of the employer,
                    ``(B) a certification as to whether the employer 
                offers to its full-time employees (and their 
                dependents) the opportunity to enroll in a health 
                benefits plan or a grandfathered health benefits plan 
                described in section 4980H(c) and applicable to the 
                employer,
                    ``(C) if the employer certifies that the employer 
                did offer to its full-time employees (and their 
                dependents) the opportunity to so enroll--
                            ``(i) the months during the calendar year 
                        for which coverage was available, and
                            ``(ii) the monthly premium for the lowest 
                        cost option in each of the enrollment 
                        categories under each health benefits plan 
                        offered to employees,
                    ``(D) the name, address, and TIN of each full-time 
                employee during the calendar year and the months (if 
                any) during which such employee (and any dependents) 
                were covered under any such health benefits plans and,
                    ``(E) such other information as the Secretary may 
                require.
    ``(c) Statements to Be Furnished to Individuals With Respect to 
Whom Information Is Reported.--
            ``(1) In general.--Every person required to make a return 
        under subsection (a) shall furnish to each full-time employee 
        whose name is required to be set forth in such return under 
        subsection (b)(2)(D) a written statement showing--
                    ``(A) the name and address of the person required 
                to make such return and the phone number of the 
                information contact for such person, and
                    ``(B) the information required to be shown on the 
                return with respect to such individual.
            ``(2) Time for furnishing statements.--The written 
        statement required under paragraph (1) shall be furnished on or 
        before January 31 of the year following the calendar year for 
        which the return under subsection (a) was required to be made.
    ``(d) Coordination With Other Requirements.--To the maximum extent 
feasible, the Secretary may provide that--
            ``(1) any return or statement required to be provided under 
        this section may be provided as part of any return or statement 
        required under section 6051 or 6055, and
            ``(2) in the case of an applicable large employer offering 
        a health benefits plan of a health insurance issuer, the 
        employer may enter into an agreement with the issuer to include 
        information required under this section with the return and 
        statement required to be provided by the issuer under section 
        6055.
    ``(e) Coverage Provided by Governmental Units.--In the case of any 
applicable large employer which is a governmental unit or any agency or 
instrumentality thereof, the person appropriately designated for 
purposes of this section shall make the returns and statements required 
by this section.
    ``(f) Definitions.--For purposes of this section, any term used in 
this section which is also used in section 4980H shall have the meaning 
given such term by section 4980H.''.
    (b) Assessable Penalties.--
            (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
        Revenue Code of 1986 (relating to definitions), as amended by 
        section 1302, is amended by striking ``or'' at the end of 
        clause (xxiii), by striking ``and'' at the end of clause (xxiv) 
        and inserting ``or'', and by inserting after clause (xxiv) the 
        following new clause:
                            ``(xxv) section 6056 (relating to returns 
                        relating to large employers required to report 
                        on health insurance coverage), and''.
            (2) Paragraph (2) of section 6724(d) of such Code, as so 
        amended, is amended by striking ``or'' at the end of 
        subparagraph (FF), by striking the period at the end of 
        subparagraph (GG) and inserting ``, or'' and by inserting after 
        subparagraph (GG) the following new subparagraph:
                    ``(HH) section 6056(c) (relating to statements 
                relating to large employers required to report on 
                health insurance coverage).''.
    (c) Conforming Amendment.--The table of sections for subpart D of 
part III of subchapter A of chapter 61 of such Code, as added by 
section 1302, is amended by adding at the end the following new item:

``Sec. 6056. Large employers required to report on health insurance 
                            coverage.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods beginning after June 30, 2013.

        Subtitle E--Federal Program for Health Care Cooperatives

SEC. 1401. ESTABLISHMENT OF FEDERAL PROGRAM FOR HEALTH CARE 
              COOPERATIVES.

    (a) In General.--Title XXII of the Social Security Act (as added by 
section 1001 and amended by sections 1101 and 1201) is amended by 
adding at the end the following:

         ``PART D--FEDERAL PROGRAM FOR HEALTH CARE COOPERATIVES

``SEC. 2251. FEDERAL PROGRAM TO ASSIST ESTABLISHMENT AND OPERATION OF 
              NONPROFIT, MEMBER-RUN HEALTH INSURANCE ISSUERS.

    ``(a) Establishment of Program.--
            ``(1) In general.--The Secretary shall establish a program 
        to carry out the purposes of this section to be known as the 
        Consumer Operated and Oriented Plan (CO-OP) program.
            ``(2) Purpose.--It is the purpose of the CO-OP program to 
        foster the creation of qualified nonprofit health insurance 
        issuers to offer qualified health benefits plans in the 
        individual and small group markets in the States in which the 
        issuers are licensed to offer such plans.
    ``(b) Loans and Grants Under the CO-OP Program.--
            ``(1) In general.--The Secretary shall provide through the 
        CO-OP program for the awarding to persons applying to become 
        qualified nonprofit health insurance issuers of--
                    ``(A) loans to provide assistance to such person in 
                meeting its start-up costs; and
                    ``(B) grants to provide assistance to such person 
                in meeting any solvency requirements of States in which 
                the person seeks to be licensed to issue qualified 
                health benefits plans.
            ``(2) Requirements for awarding loans and grants.--
                    ``(A) In general.--In awarding loans and grants 
                under the CO-OP program, the Secretary shall--
                            ``(i) take into account the recommendations 
                        of the advisory board established under 
                        paragraph (3);
                            ``(ii) give priority to applicants that 
                        will offer qualified health benefits plans on a 
                        Statewide basis, will utilize integrated care 
                        models, and have significant private support; 
                        and
                            ``(iii) ensure that there is sufficient 
                        funding to establish at least 1 qualified 
                        nonprofit health insurance issuer in each 
                        State, except that nothing in this clause shall 
                        prohibit the Secretary from funding the 
                        establishment of multiple qualified nonprofit 
                        health insurance issuers in any State if the 
                        funding is sufficient to do so.
                    ``(B) States without issuers in program.--If no 
                health insurance issuer applies to be a qualified 
                nonprofit health insurance issuer within a State, the 
                Secretary may use amounts appropriated under this 
                section for the awarding of grants to encourage the 
                establishment of a qualified nonprofit health insurance 
                issuer within the State or the expansion of a qualified 
                nonprofit health insurance issuer from another State to 
                the State.
                    ``(C) Agreement.--
                            ``(i) In general.--The Secretary shall 
                        require any person receiving a loan or grant 
                        under the CO-OP program to enter into an 
                        agreement with the Secretary which requires 
                        such person to meet (and to continue to meet)--
                                    ``(I) any requirement under this 
                                section for such person to be treated 
                                as a qualified nonprofit health 
                                insurance issuer; and
                                    ``(II) any requirements contained 
                                in the agreement for such person to 
                                receive such loan or grant.
                            ``(ii) Restrictions on use of federal 
                        funds.--The agreement shall include a 
                        requirement that no portion of the funds made 
                        available by any loan or grant under this 
                        section may be used--
                                    ``(I) for carrying on propaganda, 
                                or otherwise attempting, to influence 
                                legislation; or
                                    ``(II) for marketing.
                        Nothing in this clause shall be construed to 
                        allow a person to take any action prohibited by 
                        section 501(c)(29) of the Internal Revenue Code 
                        of 1986.
                            ``(iii) Failure to meet requirements.--If 
                        the Secretary determines that a person has 
                        failed to meet any requirement described in 
                        clause (i) or (ii) and has failed to correct 
                        such failure within a reasonable period of time 
                        of when the person first knows (or reasonably 
                        should have known) of such failure, such person 
                        shall repay to the Secretary an amount equal to 
                        the sum of--
                                    ``(I) 110 percent of the aggregate 
                                amount of loans and grants received 
                                under this section; plus
                                    ``(II) interest on the aggregate 
                                amount of loans and grants received 
                                under this section for the period the 
                                loans or grants were outstanding.
                        The Secretary shall notify the Secretary of the 
                        Treasury of any determination under this 
                        section of a failure that results in the 
                        termination of an issuer's tax-exempt status 
                        under section 501(c)(29) of such Code.
                    ``(D) Time for awarding loans and grants.--The 
                Secretary shall not later than January 1, 2012, award 
                the loans and grants under the CO-OP program and begin 
                the distribution of amounts awarded under such loans 
                and grants.
            ``(3) Advisory board.--
                    ``(A) In general.--The advisory board under this 
                paragraph shall consist of 15 members appointed by the 
                Comptroller General of the United States from among 
                individuals with qualifications described in section 
                1805(c)(2).
                    ``(B) Rules relating to appointments.--
                            ``(i) Standards.--Any individual appointed 
                        under subparagraph (A) shall meet ethics and 
                        conflict of interest standards protecting 
                        against insurance industry involvement and 
                        interference.
                            ``(ii) Original appointments.--The original 
                        appointment of board members under subparagraph 
                        (A)(ii) shall be made no later than 3 months 
                        after the date of enactment of this title.
                    ``(C) Vacancy.--Any vacancy on the advisory board 
                shall be filled in the same manner as the original 
                appointment.
                    ``(D) Pay and reimbursement.--
                            ``(i) No compensation for members of 
                        advisory board.--Except as provided in clause 
                        (ii), a member of the advisory board may not 
                        receive pay, allowances, or benefits by reason 
                        of their service on the board.
                            ``(ii) Travel expenses.--Each member shall 
                        receive travel expenses, including per diem in 
                        lieu of subsistence under subchapter I of 
                        chapter 57 of title 5, United States Code.
                    ``(E) Application of faca.--The Federal Advisory 
                Committee Act (5 U.S.C. App.) shall apply to the 
                advisory board, except that section 14 of such Act 
                shall not apply.
                    ``(F) Termination.--The advisory board shall 
                terminate on the earlier of the date that it completes 
                its duties under this section or December 31, 2015.
    ``(c) Qualified Nonprofit Health Insurance Issuer.--For purposes of 
this section--
            ``(1) In general.--The term `qualified nonprofit health 
        insurance issuer' means a health insurance issuer that is an 
        organization--
                    ``(A) that is organized under State law as a 
                nonprofit, member corporation;
                    ``(B) substantially all of the activities of which 
                consist of the issuance of qualified health benefits 
                plans in the individual and small group markets in each 
                State in which it is licensed to issue such plans; and
                    ``(C) that meets the other requirements of this 
                subsection.
            ``(2) Certain organizations prohibited.--An organization 
        shall not be treated as a qualified nonprofit health insurance 
        issuer if--
                    ``(A) the organization or a related entity (or any 
                predecessor of either) was a health insurance issuer on 
                July 16, 2009; or
                    ``(B) the organization is sponsored by a State or 
                local government, any political subdivision thereof, or 
                any instrumentality of such government or political 
                subdivision.
            ``(3) Governance requirements.--An organization shall not 
        be treated as a qualified nonprofit health insurance issuer 
        unless--
                    ``(A) the governance of the organization is subject 
                to a majority vote of its members;
                    ``(B) its governing documents incorporate ethics 
                and conflict of interest standards protecting against 
                insurance industry involvement and interference; and
                    ``(C) as provided in regulations promulgated by the 
                Secretary, the organization is required to operate with 
                a strong consumer focus, including timeliness, 
                responsiveness, and accountability to members.
            ``(4) Profits inure to benefit of members.--An organization 
        shall not be treated as a qualified nonprofit health insurance 
        issuer unless any profits made by the organization are required 
        to be used to lower premiums, to improve benefits, or for other 
        programs intended to improve the quality of health care 
        delivered to its members.
            ``(5) Compliance with state insurance laws.--An 
        organization shall not be treated as a qualified nonprofit 
        health insurance issuer unless the organization meets all the 
        requirements that other offerors of qualified health benefits 
        are required to meet in any State where the issuer offers a 
        qualified health benefits plan, including solvency and 
        licensure requirements, rules on payments to providers, and 
        compliance with network adequacy rules, rate and form filing 
        rules, and any applicable State premium assessments.
            ``(6) Coordination with state insurance reforms.--An 
        organization shall not be treated as a qualified nonprofit 
        health insurance issuer unless the organization does not offer 
        a health benefits plan in a State until that State has in 
        effect the Model Regulation, Federal standard, or State law 
        described in section 2225(a)(2).
    ``(d) Establishment of Private Purchasing Council.--
            ``(1) In general.--Qualified nonprofit health insurance 
        issuers participating in the CO-OP program under this section 
        may establish a private purchasing council to enter into 
        collective purchasing arrangements for items and services that 
        increase administrative and other cost efficiencies, including 
        claims administration, administrative services, health 
        information technology, and actuarial services.
            ``(2) Council may not set payment rates.--The private 
        purchasing council established under paragraph (1) shall not 
        set payment rates for health care facilities or providers 
        participating in health insurance coverage provided by 
        qualified nonprofit health insurance issuers.
            ``(3) Continued application of antitrust laws.--
                    ``(A) In general.--Nothing in this section shall be 
                construed to limit the application of the antitrust 
                laws to any private purchasing council (whether or not 
                established under this subsection) or to any qualified 
                nonprofit health insurance issuer participating in such 
                a council.
                    ``(B) Antitrust laws.--For purposes of this 
                subparagraph, the term `antitrust laws' has the meaning 
                given the term in subsection (a) of the first section 
                of the Clayton Act (15 U.S.C. 12(a)). Such term also 
                includes section 5 of the Federal Trade Commission Act 
                (15 U.S.C. 45) to the extent that such section 5 
                applies to unfair methods of competition.
    ``(e) Limitation on Participation.--No representative of any 
Federal, State, or local government (or of any political subdivision or 
instrumentality thereof), and no representative of a person described 
in subsection (c)(2)(A), may serve on the board of directors of a 
qualified nonprofit health insurance issuer or with a private 
purchasing council established under subsection (d).
    ``(f) Limitations on Secretary.--
            ``(1) In general.--The Secretary shall not--
                    ``(A) participate in any negotiations between 1 or 
                more qualified nonprofit health insurance issuers (or a 
                private purchasing council established under subsection 
                (d)) and any health care facilities or providers, 
                including any drug manufacturer, pharmacy, or hospital; 
                and
                    ``(B) establish or maintain a price structure for 
                reimbursement of any health benefits covered by such 
                issuers.
            ``(2) Competition.--Nothing in this section shall be 
        construed as authorizing the Secretary to interfere with the 
        competitive nature of providing health benefits through 
        qualified nonprofit health insurance issuers.
    ``(g) State.--For purposes of this section, the term `State' means 
each of the 50 States and the District of Columbia.
    ``(h) Appropriations.--There are hereby appropriated, out of any 
funds in the Treasury not otherwise appropriated, $6,000,000,000 to 
carry out this section.''.
    (b) Tax Exemption for Qualified Nonprofit Health Insurance 
Issuer.--
            (1) In general.--Section 501(c) of the Internal Revenue 
        Code of 1986 (relating to list of exempt organizations) is 
        amended by adding at the end the following:
            ``(29) CO-OP health insurance issuers.--
                    ``(A) In general.--A qualified nonprofit health 
                insurance issuer (within the meaning of section 2251 of 
                the Social Security Act) which has received a loan or 
                grant under the CO-OP program under such section, but 
                only with respect to periods for which the issuer is in 
                compliance with the requirements of such section and 
                any agreement with respect to the loan or grant.
                    ``(B) Conditions for exemption.--Subparagraph (A) 
                shall apply to an organization only if--
                            ``(i) the organization has given notice to 
                        the Secretary, in such manner as the Secretary 
                        may by regulations prescribe, that it is 
                        applying for recognition of its status under 
                        this paragraph,
                            ``(ii) except as provided in section 
                        2251(c)(4) of the Social Security Act, no part 
                        of the net earnings of which inures to the 
                        benefit of any private shareholder or 
                        individual,
                            ``(iii) no substantial part of the 
                        activities of which is carrying on propaganda, 
                        or otherwise attempting, to influence 
                        legislation, and
                            ``(iv) the organization does not 
                        participate in, or intervene in (including the 
                        publishing or distributing of statements), any 
                        political campaign on behalf of (or in 
                        opposition to) any candidate for public 
                        office.''.
            (2) Additional reporting requirement.--Section 6033 of such 
        Code (relating to returns by exempt organizations) is amended 
        by redesignating subsection (m) as subsection (n) and by 
        inserting after subsection (l) the following:
    ``(m) Additional Information Required From CO-OP Insurers.--An 
organization described in section 501(c)(29) shall include on the 
return required under subsection (a) the following information:
            ``(1) The amount of the reserves required by each State in 
        which the organization is licensed to issue qualified health 
        benefits plans.
            ``(2) The amount of reserves on hand.''.
            (3) Application of tax on excess benefit transactions.--
        Section 4958(e)(1) of such Code (defining applicable tax-exempt 
        organization) is amended by striking ``paragraph (3) or (4)'' 
        and inserting ``paragraph (3), (4), or (29)''.
    (c) GAO Study and Report.--
            (1) Study.--The Comptroller General of the General 
        Accountability Office shall conduct an ongoing study on 
        competition and market concentration in the health insurance 
        market in the United States after the implementation of the 
        reforms in such market under the provisions of, and the 
        amendments made by, this Act. Such study shall include an 
        analysis of new offerors of health insurance in such market.
            (2) Report.--The Comptroller General shall, not later than 
        December 31 of each even-numbered year (beginning with 2014), 
        report to the appropriate committees of the Congress the 
        results of the study conducted under paragraph (1), including 
        any recommendations for administrative or legislative changes 
        the Comptroller General determines necessary or appropriate to 
        increase competition in the health insurance market.

              Subtitle F--Transparency and Accountability

SEC. 1501. PROVISIONS ENSURING TRANSPARENCY AND ACCOUNTABILITY.

    (a) In General.--Title XXII of the Social Security Act, as added by 
subtitle A, is amended by adding at the end of subpart 4 of part A the 
following new section:

``SEC. 2229. REQUIREMENTS RELATING TO TRANSPARENCY AND ACCOUNTABILITY.

    ``(a) Ombudsmen.--Each State shall establish an ombudsmen program 
to address complaints related to health benefits plans issued within 
the State. Such program shall--
            ``(1) require each offeror of a health benefits plan within 
        a State to provide an internal claims appeal process meeting 
        the requirements of section 2226(e); and
            ``(2) authorize an individual covered by such a health 
        benefits plan to have access to the services of an ombudsman--
                    ``(A) if such an internal appeal lasts more than 3 
                months or involves a life threatening issue; or
                    ``(B) to resolve problems with obtaining premium 
                credits under section 36B of the Internal Revenue Code 
                of 1986 or cost-sharing assistance under section 2247.
    ``(b) Health Insurance Consumer Assistance Grants.--
            ``(1) In general.--Each State shall establish a program to 
        provide grants to eligible entities to develop, support, and 
        evaluate consumer assistance programs related to navigating 
        options for health benefits plan coverage and selecting the 
        appropriate health benefits plan coverage. Such program shall 
        include a fair and open application process and shall attempt 
        to ensure regional and geographic equity.
            ``(2) Data collection.--As a condition of receiving a grant 
        under paragraph (1), an organization shall be required to 
        collect and report data to the Secretary on the types of 
        problems and inquiries encountered by consumers served by the 
        consumer assistance programs.
            ``(3) Funding.--
                    ``(A) Initial funding.--There is hereby 
                appropriated to the Secretary, out of any funds in the 
                Treasury not otherwise appropriated, $30,000,000 for 
                the fiscal year 2014 to carry out this subsection. Such 
                amount shall remain available without fiscal year 
                limitation.
                    ``(B) Authorization for subsequent years.--There 
                are authorized to be appropriated to the Secretary for 
                each fiscal year following the fiscal year described in 
                subparagraph (A) such sums as may be necessary to carry 
                out this subsection.
            ``(4) Eligible entities.--In this section, the term 
        `eligible entity' means any public, private, or not-for-profit 
        consumer assistance organizations. Such term includes--
                    ``(A) any commercial fishing organization, any 
                ranching or farming organization, or any other 
                organization capable of conducting community-based 
                health care outreach and enrollment assistance for 
                workers who are hard to reach or employed in rural 
                areas; and
                    ``(B) any Small Business Development Center that is 
                capable of assisting small businesses in getting access 
                to health benefits plans.''.
    (b) Conforming Amendment.--The table of sections for subpart 4 of 
part A of title XXII of the Social Security Act, as added by subtitle 
A, is amended by adding at the end the following new item:

``Sec. 2229. Requirements relating to transparency and 
                            accountability.''.

SEC. 1502. REPORTING ON UTILIZATION OF PREMIUM DOLLARS AND STANDARD 
              HOSPITAL CHARGES.

    (a) Utilization of Premium Dollars.--
            (1) In general.--Each offeror of a health benefits plan 
        offering health insurance coverage within the United States 
        shall, with respect to each plan year beginning after December 
        31, 2009, report to the Secretary of Health and Human Services 
        the percentage of the premiums collected for such coverage that 
        are used to pay for items other than medical care.
            (2) Secretarial authority.--An offeror shall make the 
        report under paragraph (1) at such time and in such manner as 
        the Secretary of Health and Human Services may prescribe by 
        regulations.
    (b) Standard Hospital Charges.--Each hospital operating within the 
United States shall for each calendar year after 2009 establish (and 
update) a list of the hospital's standard charges for items and 
services provided by the hospital, including for each diagnosis-related 
group established under section 1886(d)(4) of the Social Security Act 
(42 U.S.C. 1395ww).

SEC. 1503. DEVELOPMENT AND UTILIZATION OF UNIFORM OUTLINE OF COVERAGE 
              DOCUMENTS.

    (a) In General.--The Secretary of Health and Human Services shall 
request the National Association of Insurance Commissioners (referred 
to, in this section as the ``NAIC'') to develop, and submit to the 
Secretary not later than 12 months after the date of enactment of this 
Act, standards for use by health insurance issuers in compiling and 
providing to enrollees an outline of coverage that accurately describes 
the coverage under the applicable health insurance plan. In developing 
such standards, the NAIC shall consult with a working group composed of 
representatives of consumer advocacy organizations, issuers of health 
insurance plans, and other qualified individuals.
    (b) Requirements.--The standards for the outline of coverage 
developed under subsection (a) shall provide for the following:
            (1) Appearance.--The standards shall ensure that the 
        outline of coverage is presented in a uniform format that does 
        not exceed 4 pages in length and does not include print smaller 
        than 12-point font.
            (2) Language.--The standards shall ensure that the language 
        used is presented in a manner determined to be understandable 
        by the average health plan enrollee.
            (3) Contents.--The standards shall ensure that the outline 
        of coverage includes--
                    (A) the uniform definitions of standard insurance 
                terms developed under section 1504;
                    (B) a description of the coverage, including dollar 
                amounts for coverage of--
                            (i) daily hospital room and board;
                            (ii) miscellaneous hospital services;
                            (iii) surgical services;
                            (iv) anesthesia services;
                            (v) physician services;
                            (vi) prevention and wellness services;
                            (vii) prescription drugs; and
                            (viii) other benefits, as identified by the 
                        NAIC;
                    (C) the exceptions, reductions, and limitations on 
                coverage;
                    (D) the cost-sharing provisions, including 
                deductible, coinsurance, and co-payment obligations;
                    (E) the renewability and continuation of coverage 
                provisions;
                    (F) a statement that the outline is a summary of 
                the policy or certificate and that the coverage 
                document itself should be consulted to determine the 
                governing contractual provisions; and
                    (G) a contact number for the consumer to call with 
                additional questions and a web link where a copy of the 
                actual individual coverage policy or group certificate 
                of coverage can be reviewed and obtained.
        For individual policies issued prior to January 1, 2014, the 
        health insurance issuer will be deemed compliant with the web 
        link requirement if the issuer makes a copy of the actual 
        policy available upon request.
    (c) Regulations.--
            (1) Submission.--If, not later than 12 months after the 
        date of enactment of this Act, the NAIC submits to the 
        Secretary of Health and Human Service the standards provided 
        for under subsection (a), the Secretary shall, not later than 
        60 days after the date on which such standards are submitted, 
        promulgate regulations to apply such standards to entities 
        described in subsection (d)(3).
            (2) Failure to submit.--If the NAIC fails to submit to the 
        Secretary the standards under subsection (a) within the 12-
        month period provided for in paragraph (1), the Secretary 
        shall, not later than 90 days after the expiration of such 12-
        month period, promulgate regulations providing for the 
        application of Federal standards for outlines of coverage to 
        entities described in subsection (d)(3).
    (d) Requirement to Provide.--
            (1) In general.--Not later than 24 months after the date of 
        enactment of this Act, each entity described in paragraph (3) 
        shall deliver an outline of coverage pursuant    to the 
        standards promulgated by the Secretary under subsection (c) 
        to--
                    (A) an applicant at the time of application;
                    (B) an enrollee at the time of enrollment; or
                    (C) a policyholder or certificate holder at the 
                time of issuance of the policy or delivery of the 
                certificate.
            (2) Compliance.--An entity described in paragraph (3) is 
        deemed in compliance with this section if the outline of 
        coverage is provided in paper or electronic form.
            (3) Entities in general.--An entity described in this 
        paragraph is--
                    (A) a health insurance issuer (including a group 
                health plan) offering health insurance coverage within 
                the United States (including carriers under the Federal 
                Employee Health Benefits Program under chapter 89 of 
                title 5, United States Code); and
                    (B) the Secretary with respect to coverage under 
                the Medicare, Medicaid, and CHIP programs under titles 
                XVIII, XIX, and XXI of the Social Security Act (42 
                U.S.C. 1395, 1396, 1397aa et seq.).
    (e) Preemption.--The standards promulgated under subsection (c) 
shall preempt any related State standards that require an outline of 
coverage.
    (f) Failure to Provide.--An entity described in subsection (d)(3) 
that willfully fails to provide the information required under this 
section shall be subject to a fine of not more than $1,000 for each 
such failure. Such failure with respect to each enrollee shall 
constitute a separate offense for purposes of this subsection.
    (g) Definitions.--For purposes of this section, any term used in 
this section that is also used in title XXII of the Social Security Act 
shall have the same meaning as when used in such title.

SEC. 1504. DEVELOPMENT OF STANDARD DEFINITIONS, PERSONAL SCENARIOS, AND 
              ANNUAL PERSONALIZED STATEMENTS.

    (a) Defining Insurance Terms.--
            (1) In general.--The Secretary of Health and Human Services 
        shall, by regulations, provide for the development of standards 
        for the definitions of terms used in health insurance coverage, 
        including insurance-related terms (including the insurance-
        related terms described in paragraph (2)) and medical terms 
        (including the medical terms described in paragraph (3)).
            (2) Insurance-related terms.--The insurance-related terms 
        described in this paragraph are premium, deductible, co-
        insurance, co-payment, out-of-pocket limit, preferred provider, 
        non-preferred provider, out-of-network co-payments, UCR (usual, 
        customary and reasonable) fees, excluded services, grievance 
        and appeals, and such other terms as the Secretary determines 
        are important to define so that consumers may compare health 
        insurance coverage and understand the terms of their coverage.
            (3) Medical terms.--The medical terms described in this 
        paragraph are hospitalization, hospital outpatient care, 
        emergency room care, physician services, prescription drug 
        coverage, durable medical equipment, home health care, skilled 
        nursing care, rehabilitation services, hospice services, 
        emergency medical transportation, and such other terms as the 
        Secretary determines are important to define so that consumers 
        may compare the medical benefits offered by insurance health 
        insurance and understand the extent of those medical benefits 
        (or exceptions to those benefits).
    (b) Coverage Facts Labels for Patient Claims Scenarios.--The 
Secretary of Health and Human Services shall, by regulations, develop 
standards for coverage facts labels based on patient claims scenarios 
described in the regulations, which include information on estimated 
out-of-pocket cost-sharing and significant exclusions or benefit limits 
for such scenarios.
    (c) Personalized Statement.--The Secretary of Health and Human 
Services shall, by regulations, develop standards for an annual 
personalized statement that summarizes use of health care services and 
payment of claims with respect to an enrollee (and covered dependents) 
under health insurance coverage in the preceding year.

                  Subtitle G--Role of Public Programs

      PART I--MEDICAID COVERAGE FOR THE LOWEST INCOME POPULATIONS

SEC. 1601. MEDICAID COVERAGE FOR THE LOWEST INCOME POPULATIONS.

    (a) Coverage for Individuals With Income at or Below 133 Percent of 
the Poverty Line.--
            (1) Beginning 2014.--Section 1902(a)(10)(A)(i) of the 
        Social Security Act (42 U.S.C. 1396a) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by adding ``or'' at the end of subclause (VII); 
                and
                    (C) by inserting after subclause (VII) the 
                following:
                                    ``(VIII) beginning January 1, 2014, 
                                who are under 65 years of age, not 
                                pregnant, and are not described in a 
                                previous subclause of this clause, and 
                                whose income (as determined under 
                                subsection (e)(14)) does not exceed 133 
                                percent of the poverty line (as defined 
                                in section 2110(c)(5)) applicable to a 
                                family of the size involved, subject to 
                                subsection (k);''.
            (2) Coverage of, at a minimum, essential benefits; 
        individuals with income exceeding 100, but less than 133 
        percent of the poverty line may elect subsidized exchange 
        coverage instead of medicaid.--Section 1902 of such Act (42 
        U.S.C. 1396a) is amended by inserting after subsection (j) the 
        following:
    ``(k)(1) The medical assistance provided to an individual described 
in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of 
benchmark coverage described in section 1937(b)(1) or benchmark 
equivalent coverage described in section 1937(b)(2). Such medical 
assistance shall be provided subject to the requirements of section 
1937, without regard to whether a State otherwise has elected the 
option to provide medical assistance through coverage under that 
section, unless an individual described in subclause (VIII) of 
subsection (a)(10)(A)(i) is also an individual for whom, under 
subparagraph (B) of section 1937(a)(2), the State may not require 
enrollment in benchmark coverage described in subsection (b)(1) of 
section 1937 or benchmark equivalent coverage described in subsection 
(b)(2) of that section, or the individual is a non-pregnant, non-
elderly adult whose income exceeds 100, but does not exceed 133 percent 
of the poverty line (as defined in section 2110(c)(5)) applicable to a 
family of the size involved, who has elected under section 1943(c) to 
enroll in a qualified health benefits plan through an exchange 
established by the State under section 2235.''.
            (3) Federal funding for cost of covering newly eligible 
        individuals.--Section 1905 of the Social Security Act (42 
        U.S.C. 1396d), is amended--
                    (A) in subsection (b), in the first sentence, by 
                inserting ``subsection (y) and'' before ``section 
                1933(d)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(y) Increased FMAP for Medical Assistance for Newly Eligible 
Mandatory Individuals.--
            ``(1) Amount of increase.--
                    ``(A) Initial expansion period.--
                            ``(i) In general.--During the period that 
                        begins on January 1, 2014, and ends on December 
                        31, 2018, notwithstanding subsection (b) and 
                        subject to subparagraphs (C) and (D) and 
                        section 1902(gg)(5), the Federal medical 
                        assistance percentage determined for a State 
                        that is one of the 50 States or the District of 
                        Columbia for each fiscal year quarter occurring 
                        during that period with respect to amounts 
                        expended for medical assistance for newly 
                        eligible individuals described in subclause 
                        (VIII) of section 1902(a)(10)(A)(i), shall be 
                        increased by the applicable percentage point 
                        increase specified in clause (ii) for the 
                        quarter and the State.
                            ``(ii) Applicable percentage point 
                        increase.--
                                    ``(I) In general.--For purposes of 
                                clause (i), the applicable percentage 
                                point increase for a quarter is the 
                                following:

----------------------------------------------------------------------------------------------------------------
                                       If the State is an expansion State,    If the State is not an expansion
    ``For any fiscal year quarter        the applicable percentage point      State, the applicable percentage
   occurring in the calendar year:                increase is:                       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
----------------------------------------------------------------------------------------------------------------

                                    ``(II) Expansion state defined.--
                                For purposes of the table in subclause 
                                (I), a State is an expansion State if, 
                                on the date of the enactment of the 
                                America's Healthy Future Act of 2009, 
                                the State offers health benefits 
                                coverage to parents and nonpregnant, 
                                childless adults whose income is at 
                                least 100 percent of the poverty line, 
                                that is not dependent on access to 
                                employer coverage or employment and is 
                                not limited to premium assistance, 
                                hospital-only benefits, a high 
                                deductible health plan (as defined in 
                                section 223(c)(2) of the Internal 
                                Revenue Code of 1986) purchased through 
                                a health savings account (as defined 
                                under section 223(d) of such Code), or 
                                alternative benefits under a 
                                demonstration program authorized under 
                                section 1938. A State that offers 
                                health benefits coverage to only 
                                parents or only nonpregnant childless 
                                adults described in the preceding 
                                sentence shall not be considered to be 
                                an expansion State.
                    ``(B) 2019 and succeeding years.--Beginning January 
                1, 2019, notwithstanding subsection (b) but subject to 
                subparagraph (C), the Federal medical assistance 
                percentage determined for a State that is one of the 50 
                States or the District of Columbia for each fiscal year 
                quarter occurring during that period with respect to 
                amounts expended for medical assistance for newly 
                eligible individuals described in subclause (VIII) of 
                section 1902(a)(10)(A)(i), shall be increased by 32.3 
                percentage points.
                    ``(C) Limitation.--The Federal medical assistance 
                percentage determined for a State under subparagraph 
                (A) or (B) shall in no case be more than 95 percent.
                    ``(D) High-need states.--Notwithstanding 
                subparagraph (A), in the case of a high-need State, 
                during the period that begins on January 1, 2014, and 
                ends on December 31, 2018, the Federal medical 
                assistance percentage determined for each fiscal year 
                quarter occurring during that period with respect to 
                amounts expended for medical assistance for newly 
                eligible individuals described in subclause (VIII) of 
                section 1902(a)(10)(A)(i), shall be equal to 100 
                percent. For purposes of the preceding sentence, the 
                term `high-need State' means a State that is one of the 
                50 States or the District of Columbia, on the date of 
                the enactment of the America's Healthy Future Act of 
                2009, has a total Medicaid enrollment under the State 
                plan under this title and under any waiver of the plan 
                that is below the national average for Medicaid 
                enrollment as a percentage of State population, and for 
                August 2009, has a seasonally-adjusted unemployment 
                rate that is at least 12 percent, as determined by the 
                Bureau of Labor Statistics of the Department of Labor.
            ``(2) Definitions.--In this subsection:
                    ``(A) Newly eligible.--The term `newly eligible' 
                means, with respect to an individual described in 
                subclause (VIII) of section 1902(a)(10)(A)(i), an 
                individual who is not under 19 years of age (or such 
                higher age as the State may have elected under section 
                1902(l)(1)(D)) and who, on the date of enactment of the 
                America's Healthy Future Act of 2009, is not eligible 
                under the State plan or under a waiver of the plan for 
                full benefits or for benchmark coverage described in 
                subparagraph (A), (B), or (C) of section 1937(b)(1) or 
                benchmark equivalent coverage described in section 
                1937(b)(2) that has an aggregate actuarial value that 
                is at least actuarially equivalent to benchmark 
                coverage described in subparagraph (A), (B), or (C) of 
                section 1937(b)(1), or is eligible but not enrolled (or 
                is on a waiting list) for such benefits or coverage 
                through a waiver under the plan that has a capped or 
                limited enrollment that is full.
                    ``(B) Full benefits.--The term `full benefits' 
                means, with respect to an individual, medical 
                assistance for all services covered under the State 
                plan under this title that is not less in amount, 
                duration, or scope, or is determined by the Secretary 
                to be substantially equivalent, to the medical 
                assistance available for an individual described in 
                section 1902(a)(10)(A)(i).''.
            (4) State option to offer coverage earlier and presumptive 
        eligibility; children required to have coverage for parents to 
        be eligible.--Subsection (k) of section 1902 of the Social 
        Security Act (as added by paragraph (2)), is amended by 
        inserting after paragraph (1) the following:
    ``(2) A State may elect through a State plan amendment to provide 
medical assistance to individuals described in subclause (VIII) of 
subsection (a)(10)(A)(i) beginning with the first day of any fiscal 
year quarter that begins on or after January 1, 2011, and before 
January 1, 2014. A State may elect to phase-in the extension of 
eligibility for medical assistance to such individuals based on income, 
so long as the State does not extend such eligibility to individuals 
described in such subclause with higher income before making 
individuals described in such subclause with lower income eligible for 
medical assistance.
    ``(3) If the State has elected the option to provide for a period 
of presumptive eligibility under section 1920 or 1920A, the State may 
elect to provide for a period of presumptive eligibility for medical 
assistance (not to exceed 60 days) for individuals described in 
subclause (VIII) of subsection (a)(10)(A)(i) in the same manner as the 
State provides for such a period under that section, subject to such 
guidance as the Secretary shall establish.
    ``(4) If an individual described in subclause (VIII) of subsection 
(a)(10)(A)(i) is the parent of a child who is under 19 years of age (or 
such higher age as the State may have elected under section 
1902(l)(1)(D)) who is eligible for medical assistance under the State 
plan or under a waiver of such plan, the individual may not be enrolled 
under the State plan unless the individual's child is enrolled under 
the State plan or under a waiver of the plan or is enrolled in other 
health insurance coverage. For purposes of the preceding sentence, the 
term `parent' includes an individual treated as a caretaker relative 
for purposes of carrying out section 1931 and a noncustodial parent.''.
            (5) Conforming amendments.--
                    (A) Section 1902(a)(10) of such Act (42 U.S.C. 
                1396a(a)(10)) is amended in the matter following 
                subparagraph (G), by striking ``and (XIV)'' and 
                inserting ``(XIV)'' and by inserting ``and (XV) the 
                medical assistance made available to an individual 
                described in subparagraph (A)(i)(VIII) shall be limited 
                to medical assistance described in subsection (k)(1)'' 
                before the semicolon.
                    (B) Section 1902(l)(2)(C) of such Act (42 U.S.C. 
                1396a(l)(2)(C)) is amended by striking ``100'' and 
                inserting ``133''.
                    (C) Section 1905(a) of such Act (42 U.S.C. 
                1396d(a)) is amended in the matter preceding paragraph 
                (1)--
                            (i) by striking ``or'' at the end of clause 
                        (xii);
                            (ii) by inserting ``or'' at the end of 
                        clause (xiii); and
                            (iii) by inserting after clause (xiii) the 
                        following:
            ``(xiv) individuals described in section 
        1902(a)(10)(A)(i)(VIII),''.
                    (D) Section 1903(f)(4) of such Act (42 U.S.C. 
                1396b(f)(4)) is amended by inserting 
                ``1902(a)(10)(A)(i)(VIII),'' after 
                ``1902(a)(10)(A)(i)(VII),''.
                    (E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 
                1396u-7(a)(1)(B)) is amended by inserting ``subclause 
                (VIII) of section 1902(a)(10)(A)(i) or under'' after 
                ``eligible under''.
    (b) Maintenance of Medicaid Income Eligibility.--Section 1902 of 
the Social Security Act (42 U.S.C. 1396a) is amended--
            (1) in subsection (a)--
                    (A) by striking ``and'' at the end of paragraph 
                (72);
                    (B) by striking the period at the end of paragraph 
                (73) and inserting ``; and''; and
                    (C) by inserting after paragraph (73) the following 
                new paragraph:
            ``(74) provide for maintenance of effort under the State 
        plan or under any waiver of the plan in accordance with 
        subsection (gg).''; and
            (2) by adding at the end the following new subsection:
    ``(gg) Maintenance of Effort.--
            ``(1) General requirement to maintain eligibility standards 
        until state exchange is fully operational.--Subject to the 
        succeeding paragraphs of this subsection, during the period 
        that begins on the date of enactment of the America's Healthy 
        Future Act of 2009 and ends on the date on which the Secretary 
        determines that an exchange established by the State under 
        section 2235 is fully operational, as a condition for receiving 
        any Federal payments under section 1903(a) for calendar 
        quarters occurring during such period, a State shall not have 
        in effect eligibility standards, methodologies, or procedures 
        under the State plan under this title or under any waiver of 
        such plan that is in effect during that period, that are more 
        restrictive than the eligibility standards, methodologies, or 
        procedures, respectively, under the plan or waiver that are in 
        effect on the date of enactment of the America's Healthy Future 
        Act of 2009.
            ``(2) Continuation of eligibility standards for adults with 
        income at or below 133 percent of poverty until january 1, 
        2014.--The requirement under paragraph (1) shall continue to 
        apply to a State through December 31, 2013, with respect to the 
        eligibility standards, methodologies, and procedures under the 
        State plan under this title or under any waiver of such plan 
        that are applicable to determining the eligibility for medical 
        assistance of adults whose income does not exceed 133 percent 
        of the poverty line (as defined in section 2110(c)(5)).
            ``(3) Continuation of eligibility standards for children 
        until october 1, 2019.--The requirement under paragraph (1) 
        shall continue to apply to a State through September 30, 2019, 
        with respect to the eligibility standards, methodologies, and 
        procedures under the State plan under this title or under any 
        waiver of such plan that are applicable to determining the 
        eligibility for medical assistance of any child who is under 19 
        years of age (or such higher age as the State may have elected 
        under section 1902(l)(1)(D)).
            ``(4) Nonapplication.--During the period that begins on 
        January 1, 2011, and ends on December 31, 2013, the requirement 
        under paragraph (1) shall not apply to a State with respect to 
        nonpregnant, nondisabled adults who are eligible for medical 
        assistance under the State plan or under a waiver of the plan 
        at the option of the State and whose income exceeds 133 percent 
        of the poverty line (as defined in section 2110(c)(5)) 
        applicable to a family of the size involved if, on or after 
        December 31, 2010, the State certifies to the Secretary that, 
        with respect to the State fiscal year during which the 
        certification is made, the State has a budget deficit, or with 
        respect to the succeeding State fiscal year, the State is 
        projected to have a budget deficit. Upon submission of such a 
        certification to the Secretary, the requirement under paragraph 
        (1) shall not apply to the State with respect to any remaining 
        portion of the period described in the preceding sentence.
            ``(5) Additional federal financial participation.--
                    ``(A) In general.--During the period that begins on 
                October 1, 2013, and ends on September 30, 2019, 
                notwithstanding section 1905(b), the Federal medical 
                assistance percentage otherwise determined for a State 
                under such section with respect to a fiscal year for 
                amounts expended for medical assistance for individuals 
                who are not newly eligible (as defined in section 
                1905(y)(2)(A)) individuals described in subclause 
                (VIII) of section 1902(a)(10)(A)(i), shall--
                            ``(i) in the case of a State that is one of 
                        the 50 States or the District of Columbia, be 
                        increased by 0.15 percentage point; and
                            ``(ii) in the case of any other State, be 
                        increased by 0.075 percentage point.
                    ``(B) Scope of application.--The increase in the 
                Federal medical assistance percentage for a State under 
                subparagraph (A) shall apply only for purposes of this 
                title and shall not apply with respect to--
                            ``(i) disproportionate share hospital 
                        payments described in section 1923;
                            ``(ii) payments under title IV;
                            ``(iii) payments under title XXI; and
                            ``(iv) payments under this title that are 
                        based on the enhanced FMAP described in section 
                        2105(b).
            ``(6) Determination of compliance.--
                    ``(A) States shall apply modified gross income.--A 
                State's determination of income in accordance with 
                subsection (e)(14) shall not be considered to be 
                eligibility standards, methodologies, or procedures 
                that are more restrictive than the standards, 
                methodologies, or procedures in effect under the State 
                plan or under a waiver of the plan on the date of 
                enactment of the America's Healthy Future Act of 2009 
                for purposes of determining compliance with the 
                requirements of paragraph (1), (2), or (3).
                    ``(B) States may expand eligibility or move 
                waivered populations into coverage under the state 
                plan.--With respect to any period applicable under 
                paragraph (1), (2), or (3), a State that applies 
                eligibility standards, methodologies, or procedures 
                under the State plan under this title or under any 
                waiver of the plan that are less restrictive than the 
                eligibility standards, methodologies, or procedures, 
                applied under the State plan or under a waiver of the 
                plan on the date of enactment of the America's Healthy 
                Future Act of 2009, or that makes individuals who, on 
                such date of enactment, are eligible for medical 
                assistance under a waiver of the State plan, after such 
                date of enactment eligible for medical assistance 
                through a State plan amendment with an income 
                eligibility level that is not less than the income 
                eligibility level that applied under the waiver, or as 
                a result of the application of subclause (VIII) of 
                section 1902(a)(10)(A)(i), shall not be considered to 
                have in effect eligibility standards, methodologies, or 
                procedures that are more restrictive than the 
                standards, methodologies, or procedures in effect under 
                the State plan or under a waiver of the plan on the 
                date of enactment of the America's Healthy Future Act 
                of 2009 for purposes of determining compliance with the 
                requirements of paragraph (1), (2), or (3).''.
    (c) Medicaid Benchmark Benefits Must Consist of at Least Essential 
Benefits.--Section 1937(b) of such Act (42 U.S.C. 1396u-7(b)) is 
amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by inserting ``subject to paragraphs (5) and (6),'' before 
        ``each'';
            (2) in paragraph (2)--
                    (A) in the mater preceding subparagraph (A), by 
                inserting ``subject to paragraphs (5) and (6)'' after 
                ``subsection (a)(1),'';
                    (B) in subparagraph (A)--
                            (i) by redesignating clauses (iv) and (v) 
                        as clauses (v) and (vi), respectively; and
                            (ii) by inserting after clause (iii), the 
                        following:
                                    ``(IV) Coverage of prescription 
                                drugs.''; and
                    (C) in subparagraph (C)--
                            (i) by striking clauses (i) and (ii); and
                            (ii) by redesignating clauses (iii) and 
                        (iv) as clauses (i) and (ii), respectively; and
            (3) by adding at the end the following new paragraphs:
            ``(5) Minimum standards.--Effective January 1, 2014, any 
        benchmark benefit package under paragraph (1) or benchmark 
        equivalent coverage under paragraph (2) must provide at least 
        essential benefits described in section 2242 (as defined and 
        specified annually by the Secretary in accordance with 
        subsection (e) of that section).
            ``(6) Mental health services parity.--
                    ``(A) In general.--In the case of any benchmark 
                benefit package under paragraph (1) or benchmark 
                equivalent coverage under paragraph (2) that provides 
                both medical and surgical benefits and mental health or 
                substance use disorder benefits, such plan shall ensure 
                that the financial requirements and treatment 
                limitations applicable to such mental health or 
                substance use disorder benefits comply with the 
                requirements of section 2705(a) of the Public Health 
                Service Act in the same manner as such requirements 
                apply to a group health plan.
                    ``(B) Deemed compliance.--Coverage provided with 
                respect to an individual described in section 
                1905(a)(4)(B) and covered under the State plan under 
                section 1902(a)(10)(A) of the services described in 
                section 1905(a)(4)(B) (relating to early and periodic 
                screening, diagnostic, and treatment services defined 
                in section 1905(r)) and provided in accordance with 
                section 1902(a)(43), shall be deemed to satisfy the 
                requirements of subparagraph (A).''.
    (d) Annual Reports on Medicaid Enrollment.--
            (1) State reports.--Section 1902(a) of the Social Security 
        Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is 
        amended--
                    (A) by striking ``and'' at the end of paragraph 
                (73);
                    (B) by striking the period at the end of paragraph 
                (74) and inserting ``; and''; and
                    (C) by inserting after paragraph (74) the following 
                new paragraph:
            ``(75) provide that, beginning January 2015, and annually 
        thereafter, the State shall submit a report to the Secretary 
        that contains--
                    ``(A) the total number of newly enrolled 
                individuals in the State plan or under a waiver of the 
                plan for the fiscal year ending on September 30 of the 
                preceding calendar year, disaggregated by population, 
                including children, parents, nonpregnant childless 
                adults, disabled individuals, elderly individuals, and 
                such other categories or sub-categories of individuals 
                eligible for medical assistance under the State plan or 
                under a waiver of the plan as the Secretary may 
                require; and
                    ``(B) a description of the outreach and enrollment 
                processes used by the State during such fiscal year.''.
            (2) Reports to congress.--Beginning April 2015, and 
        annually thereafter, the Secretary of Health and Human Services 
        shall submit a report to the appropriate committees of Congress 
        on the total new enrollment in Medicaid for the fiscal year 
        ending on September 30 of the preceding calendar year on a 
        national and State-by-State basis, and shall include in each 
        such report such recommendations for administrative or 
        legislative changes to improve enrollment in the Medicaid 
        program as the Secretary determines appropriate.
    (e) State Option for Coverage for Individuals With Income That 
Exceeds 133 Percent of the Poverty Line.--
            (1) Coverage as optional categorically needy group.--
        Section 1902 of the Social Security Act (42 U.S.C. 1396a) is 
        amended--
                    (A) in subsection (a)(10)(A)(ii)--
                            (i) in subclause (XVIII), by striking 
                        ``or'' at the end;
                            (ii) in subclause (XIX), by adding ``or'' 
                        at the end; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(XX) beginning January 1, 2014, 
                                who are under 65 years of age and are 
                                not described in a previous subclause 
                                of this clause, and whose income (as 
                                determined under subsection (e)(14)) 
                                exceeds 133 percent of the poverty line 
                                (as defined in section 2110(c)(5)) 
                                applicable to a family of the size 
                                involved but does not exceed the 
                                highest income eligibility level 
                                established under the State plan or 
                                under a waiver of the plan, subject to 
                                subsection (hh);'' and
                    (B) by adding at the end the following new 
                subsection:
    ``(hh)(1) A State may elect to phase-in the extension of 
eligibility for medical assistance to individuals described in 
subclause (XX) of subsection (a)(10)(A)(ii) based on income, so long as 
the State does not extend such eligibility to individuals described in 
such subclause with higher income before making individuals described 
in such subclause with lower income eligible for medical assistance.
    ``(2) If the State has elected the option to provide for a period 
of presumptive eligibility under section 1920 or 1920A, the State may 
elect to provide for a period of presumptive eligibility for medical 
assistance (not to exceed 60 days) for individuals described in 
subclause (XX) of subsection (a)(10)(A)(ii) in the same manner as the 
State provides for such a period under that section, subject to such 
guidance as the Secretary shall establish.
    ``(3) If an individual described in subclause (XX) of subsection 
(a)(10)(A)(ii) is the parent of a child who is under 19 years of age 
(or such higher age as the State may have elected under section 
1902(l)(1)(D)) who is eligible for medical assistance under the State 
plan or under a waiver of such plan, the individual may not be enrolled 
under the State plan unless the individual's child is enrolled under 
the State plan or under a waiver of the plan or is enrolled in other 
health insurance coverage. For purposes of the preceding sentence, the 
term `parent' includes an individual treated as a caretaker relative 
for purposes of carrying out section 1931 and a noncustodial parent.''.
            (2) Conforming amendments.--
                    (A) Section 1905(a) of such Act (42 U.S.C. 
                1396d(a)), as amended by subsection (a)(5)(C), is 
                amended in the matter preceding paragraph (1)--
                            (i) by striking ``or'' at the end of clause 
                        (xiii);
                            (ii) by inserting ``or'' at the end of 
                        clause (xiv); and
                            (iii) by inserting after clause (xiv) the 
                        following:
            ``(xv) individuals described in section 
        1902(a)(10)(A)(ii)(XX),''.
                    (B) Section 1903(f)(4) of such Act (42 U.S.C. 
                1396b(f)(4)) is amended by inserting 
                ``1902(a)(10)(A)(ii)(XX),'' after 
                ``1902(a)(10)(A)(ii)(XIX),''.

SEC. 1602. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED USING MODIFIED 
              GROSS INCOME.

    (a) In General.--Section 1902(e) of the Social Security Act (42 
U.S.C. 1396a(e)) is amended by adding at the end the following:
            ``(14) Income determined using modified gross income.--
                    ``(A) In general.--Notwithstanding subsection (r) 
                or any other provision of this title, except as 
                provided in subparagraph (D), the modified gross income 
                of an individual or family, as determined for purposes 
                of allowing a premium credit assistance amount for the 
                purchase of a qualified health benefits plan under 
                section 36B of the Internal Revenue Code of 1986, shall 
                be used for purposes of determining income eligibility 
                for medical assistance under the State plan and under 
                any waiver of such plan, and for any other purpose 
                applicable under the plan or waiver for which a 
                determination of income is required, including 
                imposition of premiums and cost-sharing.
                    ``(B) No income or expense disregards.--No type of 
                expense, block, or other income disregard shall be 
                applied by a State in determining the modified gross 
                income of an individual or family under the State plan 
                or under a waiver of the plan.
                    ``(C) No assets test.--A State shall not apply any 
                assets or resources test for purposes of determining 
                the eligibility for medical assistance under the State 
                plan or under a waiver of the plan of an individual or 
                family.
                    ``(D) Exceptions.--
                            ``(i) Individuals eligible because of other 
                        aid or assistance, elderly individuals, 
                        medically needy individuals, individuals 
                        eligible for medicare cost-sharing, and 
                        optional targeted low-income children.--
                        Subparagraphs (A), (B), and (C) shall not apply 
                        to the determination of eligibility under the 
                        State plan or under a waiver for medical 
                        assistance for the following:
                                    ``(I) Individuals who are eligible 
                                for medical assistance under the State 
                                plan or under a waiver of the plan on a 
                                basis that does not require a 
                                determination of income by the State 
                                agency administering the State plan or 
                                waiver, including as a result of 
                                eligibility for, or receipt of, other 
                                Federal or State aid or assistance, 
                                individuals who are eligible on the 
                                basis of receiving (or being treated as 
                                if receiving) supplemental security 
                                income benefits under title XVI, and 
                                individuals who are eligible as a 
                                result of being or being deemed to be a 
                                child in foster care under the 
                                responsibility of the State.
                                    ``(II) Individuals who have 
                                attained age 65 or who are title II 
                                disability beneficiaries (as defined in 
                                section 1148(k)(3)).
                                    ``(III) Individuals described in 
                                subsection (a)(10)(C).
                                    ``(IV) Individuals described in any 
                                clause of subsection (a)(10)(E).
                                    ``(V) Optional targeted low-income 
                                children described in section 
                                1905(u)(2)(B).
                            ``(ii) Express lane agency findings.--In 
                        the case of a State that elects the Express 
                        Lane option under paragraph (13), 
                        notwithstanding subparagraphs (A), (B), and 
                        (C), the State may rely on a finding made by an 
                        Express Lane agency in accordance with that 
                        paragraph relating to the income of an 
                        individual for purposes of determining the 
                        individual's eligibility for medical assistance 
                        under the State plan or under a waiver of the 
                        plan.
                            ``(iii) Medicare prescription drug 
                        subsidies determinations.--Subparagraphs (A), 
                        (B), and (C) shall not apply to any 
                        determinations of eligibility for premium and 
                        cost-sharing subsidies under and in accordance 
                        with section 1860D-14 made by the State 
                        pursuant to section 1935(a)(2).
                            ``(iv) Long-term care.--Subparagraphs (A), 
                        (B), and (C) shall not apply to any 
                        determinations of eligibility of individuals 
                        for purposes of medical assistance for services 
                        described in section 1917(c)(1)(C).
                            ``(v) Grandfather of current enrollees 
                        until date of next regular redetermination.--An 
                        individual who, on July 1, 2013, is enrolled in 
                        the State plan or under a waiver of the plan 
                        and who would be determined ineligible for 
                        medical assistance solely because of the 
                        application of the modified gross income 
                        standard described in subparagraph (A), shall 
                        remain eligible for medical assistance under 
                        the State plan or waiver (and subject to the 
                        same premiums and cost-sharing as applied to 
                        the individual on that date) through March 31, 
                        2014, or the date on which the individual's 
                        next regularly scheduled redetermination of 
                        eligibility is to occur, whichever is later.
                    ``(E) Limitation on secretarial authority.--The 
                Secretary shall not waive compliance with the 
                requirements of this paragraph except to the extent 
                necessary to permit a State to coordinate eligibility 
                requirements for dual eligible individuals (as defined 
                in section 1915(h)(2)(B)) under the State plan or under 
                a waiver of the plan and under title XVIII and 
                individuals who require the level of care provided in a 
                hospital, a nursing facility, or an intermediate care 
                facility for the mentally retarded.''.
    (b) Conforming Amendment.--Section 1902(a)(17) of such Act (42 
U.S.C. 1396a(a)(17)) is amended by inserting ``(e)(14),'' before 
``(l)(3)''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
take effect on July 1, 2013.

SEC. 1603. REQUIREMENT TO OFFER PREMIUM ASSISTANCE FOR EMPLOYER-
              SPONSORED INSURANCE.

    (a) In General.--Section 1906A of such Act (42 U.S.C. 1396e-1) is 
amended--
            (1) in subsection (a)--
                    (A) by striking ``may elect to'' and inserting 
                ``shall'';
                    (B) by striking ``under age 19''; and
                    (C) by inserting ``, in the case of an individual 
                under age 19,'' after ``(and'';
            (2) in subsection (c), in the first sentence, by striking 
        ``under age 19''; and
            (3) in subsection (d)(2)--
                    (A) in the first sentence, by striking ``under age 
                19''; and
                    (B) by striking the third sentence and inserting 
                ``A State may not require, as a condition of an 
                individual (or the individual's parent) being or 
                remaining eligible for medical assistance under this 
                title, that the individual (or the individual's parent) 
                apply for enrollment in qualified employer-sponsored 
                coverage under this section.''.
    (b) Conforming Amendment.--The heading for section 1906A of such 
Act (42 U.S.C. 1396e-1) is amended by striking ``option for children''.
    (c) Effective Date.--The amendments made by this section take 
effect on July 1, 2013.

SEC. 1604. PAYMENTS TO TERRITORIES.

    (a) Increase in Limit on Payments.--Section 1108(g) of the Social 
Security Act (42 U.S.C. 1308(g)) is amended--
            (1) in paragraph (2), in the matter preceding subparagraph 
        (A), by striking ``paragraph (3)'' and inserting ``paragraphs 
        (3) and (5)'';
            (2) in paragraph (4), by striking ``and (3)'' and inserting 
        ``(3), and (4)''; and
            (3) by adding at the end the following paragraph:
            ``(5) Fiscal year 2011 and thereafter.--The amounts 
        otherwise determined under this subsection for Puerto Rico, the 
        Virgin Islands, Guam, the Northern Mariana Islands, and 
        American Samoa for the second, third, and fourth quarters of 
        fiscal year 2011, and for each fiscal year after fiscal year 
        2011 (after the application of subsection (f) and the preceding 
        paragraphs of this subsection), shall be increased by 30 
        percent.''.
    (b) Disregard of Payments for Mandatory Expanded Enrollment.--
Section 1108(g)(4) of such Act (42 U.S.C. 1308(g)) is amended--
            (1) by striking ``to fiscal years beginning'' and inserting 
        ``to--
                    ``(A) fiscal years beginning'';
            (2) by striking the period at the end and inserting ``; 
        and''; and
            (3) by adding at the end the following:
                    ``(B) fiscal years beginning with fiscal year 2014, 
                payments made to Puerto Rico, the Virgin Islands, Guam, 
                the Northern Mariana Islands, or American Samoa on the 
                basis of the Federal medical assistance percentage as 
                increased under section 1902(gg)(5), and payments made 
                with respect to amounts expended for medical assistance 
                for newly eligible (as defined in section 1905(y)(2)) 
                nonpregnant childless adults who are eligible under 
                subclause (VIII) of section 1902(a)(10)(A)(i) and whose 
                income (as determined under section 1902(e)(14)) does 
                not exceed (in the case of each such commonwealth and 
                territory respectively) the income eligibility level in 
                effect for that population under title XIX or under a 
                waiver on the date of enactment of the America's 
                Healthy Future Act of 2009, shall not be taken into 
                account in applying subsection (f) (as increased in 
                accordance with paragraphs (1), (2), (3), and (5) of 
                this subsection) to such commonwealth or territory for 
                such fiscal year.''.
    (c) Increased FMAP.--
            (1) In general.--The first sentence of section 1905(b) of 
        the Social Security Act (42 U.S.C. 1396d(b)) is amended by 
        striking ``shall be 50 per centum'' and inserting ``shall be 55 
        percent''.
            (2) Effective date.--The amendment made by paragraph (1) 
        takes effect on January 1, 2011.

SEC. 1605. MEDICAID IMPROVEMENT FUND RESCISSION.

    (a) Rescission.--Any amounts available to the Medicaid Improvement 
Fund established under section 1941 of the Social Security Act (42 
U.S.C. 1396w-1) for any of fiscal years 2014 through 2018 that are 
available for expenditure from the Fund and that are not so obligated 
as of the date of the enactment of this Act are rescinded.
    (b) Conforming Amendments.--Section 1941(b)(1) of the Social 
Security Act (42 U.S.C. 1396w-1(b)(1)) is amended--
            (1) in subparagraph (A), by striking ``$100,000,000'' and 
        inserting ``$0''; and
            (2) in subparagraph (B), by striking ``$150,000,000'' and 
        inserting ``$0''.

              PART II--CHILDREN'S HEALTH INSURANCE PROGRAM

SEC. 1611. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP.

    (a) In General.--Section 2105(b) of the Social Security Act (42 
U.S.C. 1397ee(b)) is amended by adding at the end the following: 
``Notwithstanding the preceding sentence, during the period that begins 
on October 1, 2013, and ends on September 30, 2019, the enhanced FMAP 
determined for a State for a fiscal year (or for any portion of a 
fiscal year occurring during such period) shall be increased by 23 
percentage points, but in no case shall exceed 100 percent. The 
increase in the enhanced FMAP under the preceding sentence shall not 
apply with respect to determining the payment to a State under 
subsection (a)(1) for expenditures described in subparagraph (D)(iv), 
paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first 
sentence of section 1905(b).''.
    (b) Maintenance of Effort.--Section 2105(d) of the Social Security 
Act (42 U.S.C. 1397ee(d)) is amended by adding at the end the 
following:
            ``(3) Continuation of eligibility standards for children 
        until october 1, 2019.--During the period that begins on the 
        date of enactment of the America's Healthy Future Act of 2009 
        and ends on September 30, 2019, a State shall not have in 
        effect eligibility standards, methodologies, or procedures 
        under its State child health plan (including any waiver under 
        such plan) for children that are more restrictive than the 
        eligibility standards, methodologies, or procedures, 
        respectively, under such plan (or waiver) as in effect on the 
        date of enactment of that Act. The preceding sentence shall not 
        be construed as preventing a State during such period from--
                    ``(A) applying eligibility standards, 
                methodologies, or procedures for children under the 
                State child health plan or under any waiver of the plan 
                that are less restrictive than the eligibility 
                standards, methodologies, or procedures, respectively, 
                for children under the plan or waiver that are in 
                effect on the date of enactment of such Act; or
                    ``(B) imposing a limitation described in section 
                2112(b)(7) for a fiscal year in order to limit 
                expenditures under the State child health plan to those 
                for which Federal financial participation is available 
                under this section for the fiscal year.''.
    (c) No Enrollment Bonus Payments for Children Enrolled After Fiscal 
Year 2013.--Section 2105(a)(3)(F)(iii) of the Social Security Act (42 
U.S.C. 1397ee(a)(3)(F)(iii)) is amended by inserting ``or any children 
enrolled on or after October 1, 2013'' before the period.
    (d) Application of Streamlined Enrollment System.--Section 
2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is 
amended by adding at the end the following:
                    ``(M) Section 1943(b) (relating to coordination 
                with State health insurance exchanges and the State 
                Medicaid agency).''.

SEC. 1612. TECHNICAL CORRECTIONS.

    (a) CHIPRA.--Effective as if included in the enactment of the 
Children's Health Insurance Program Reauthorization Act of 2009 (Public 
Law 111-3) (in this section referred to as ``CHIPRA''):
            (1) Section 2104(m) of the Social Security Act, as added by 
        section 102 of CHIPRA, is amended--
                    (A) by redesignating paragraph (7) as paragraph 
                (8); and
                    (B) by inserting after paragraph (6), the 
                following:
            ``(7) Adjustment of fiscal years 2009 and 2010 allotments 
        to account for changes in projected spending for certain 
        previously approved expansion programs.--In the case of one of 
        the 50 States or the District of Columbia that has an approved 
        State plan amendment effective January 1, 2006, to provide 
        child health assistance through the provision of benefits under 
        the State plan under title XIX for children from birth through 
        age 5 whose family income does not exceed 200 percent of the 
        poverty line, the Secretary shall increase the allotments 
        otherwise determined for the State for fiscal years 2009 and 
        2010 under paragraphs (1) and (2)(A)(i) in order to take into 
        account changes in the projected total Federal payments to the 
        State under this title for such fiscal years that are 
        attributable to the provision of such assistance to such 
        children.''.
            (2) Section 605 of CHIPRA is amended by striking ``legal 
        residents'' and insert ``lawfully residing in the United 
        States''.
            (3) Subclauses (I) and (II) of paragraph (3)(C)(i) of 
        section 2105(a) of the Social Security Act (42 U.S.C. 
        1397ee(a)(3)(ii)), as added by section 104 of CHIPRA, are each 
        amended by striking ``, respectively''.
            (4) Section 2105(a)(3)(E)(ii) of the Social Security Act 
        (42 U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of 
        CHIPRA, is amended by striking subclause (IV).
            (5) Section 2105(c)(9)(B) of the Social Security Act (42 
        U.S.C. 1397e(c)(9)(B)), as added by section 211(c)(1) of 
        CHIPRA, is amended by striking ``section 1903(a)(3)(F)'' and 
        inserting ``section 1903(a)(3)(G)''.
            (6) Section 2109(b)(2)(B) of the Social Security Act (42 
        U.S.C. 1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is 
        amended by striking ``the child population growth factor under 
        section 2104(m)(5)(B)'' and inserting ``a high-performing State 
        under section 2111(b)(3)(B)''.
            (7) Section 211(a)(1)(B) of CHIPRA is amended--
                    (A) by striking ``is amended'' and all that follows 
                through ``adding'' and inserting ``is amended by 
                adding''; and
                    (B) by redesignating the new subparagraph to be 
                added by such section to section 1903(a)(3) of the 
                Social Security Act as a new subparagraph (H).
    (b) ARRA.--Effective as if included in the enactment of section 
5006(a) of division B of the American Recovery and Reinvestment Act of 
2009 (Public Law 111-5), the second sentence of section 1916A(a)(1) of 
the Social Security Act (42 U.S.C. 1396o-1(a)(1)) is amended by 
striking ``or (i)'' and inserting ``, (i), or (j)''.

                  PART III--ENROLLMENT SIMPLIFICATION

SEC. 1621. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE HEALTH 
              INSURANCE EXCHANGES.

    Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.) is 
amended by adding at the end the following:

``SEC. 1943. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE 
              HEALTH INSURANCE EXCHANGES.

    ``(a) Condition for Participation in Medicaid.--As a condition of 
the State plan under this title and receipt of any Federal financial 
assistance under section 1903(a) for calendar quarters beginning after 
January 1, 2013, a State shall ensure that the requirements of 
subsections (b), (c), and (d) are met.
    ``(b) Enrollment Simplification and Coordination With State Health 
Insurance Exchanges and Chip.--
            ``(1) In general.--A State shall establish procedures for--
                    ``(A) enabling individuals, through an Internet 
                website that meets the requirements of paragraph (4), 
                to apply for medical assistance under the State plan or 
                under a waiver of the plan, to be enrolled in the State 
                plan or waiver, to renew their enrollment in the plan 
                or waiver, and to consent to enrollment or reenrollment 
                in the State plan through electronic signature;
                    ``(B) enrolling, without any further determination 
                by the State and through such website, individuals who 
                are identified by an exchange established by the State 
                under section 2235 as being eligible for--
                            ``(i) medical assistance under the State 
                        plan or under a waiver of the plan; or
                            ``(ii) child health assistance under the 
                        State child health plan under title XXI;
                    ``(C) ensuring that individuals who apply for but 
                are determined to be ineligible for medical assistance 
                under the State plan or a waiver or ineligible for 
                child health assistance under the State child health 
                plan under title XXI, are able to apply for, and be 
                enrolled in, coverage through such an exchange and, if 
                applicable, obtain premium assistance for the purchase 
                of a qualified health benefits plan under section 36B 
                of the Internal Revenue Code of 1986 (and, if 
                applicable, advance payment of such assistance under 
                section 2248 of this Act), without having to submit an 
                additional or separate application, and receive 
                information regarding any other assistance or subsidies 
                available for coverage obtained through the exchange;
                    ``(D) ensuring that the State agency responsible 
                for administering the State plan under this title (in 
                this section referred to as the `State Medicaid 
                agency'), the State agency responsible for 
                administering the State child health plan under title 
                XXI (in this section referred to as the `State CHIP 
                agency') and an exchange established by the State under 
                section 2235 utilize a secure electronic interface 
                sufficient to allow for a determination of an 
                individual's eligibility for such medical assistance, 
                child health assistance, or premium assistance, as 
                appropriate; and
                    ``(E) coordinating, for individuals who are 
                enrolled in the State plan or under a waiver of the 
                plan and who are also enrolled in a qualified health 
                benefits plan offered through such an exchange, and for 
                individuals who are enrolled in the State child health 
                plan under title XXI and who are also enrolled in a 
                qualified health benefits plan, the provision of 
                medical assistance or child health assistance to such 
                individuals with the coverage provided under the 
                qualified health benefits plan in which they are 
                enrolled.
            ``(2) Agreements with state health insurance exchanges.--
        The State Medicaid agency and the State CHIP agency may enter 
        into an agreement with an exchange established by the State 
        under section 2235 under which the State Medicaid agency or 
        State CHIP agency may determine whether a State resident is 
        eligible for premium assistance for the purchase of a qualified 
        health benefits plan under section 36B of the Internal Revenue 
        Code of 1986 (and, if applicable, advance payment of such 
        assistance under section 2248 of this Act), so long as the 
        agreement meets such conditions and requirements as the 
        Secretary of the Treasury may prescribe to reduce 
        administrative costs and the likelihood of eligibility errors 
        and disruptions in coverage.
            ``(3) Streamlined enrollment system.--The State Medicaid 
        agency and State CHIP agency shall participate in and comply 
        with the requirements for the system established under section 
        2239 (relating to streamlined procedures for enrollment through 
        an exchange, Medicaid, and CHIP).
            ``(4) Enrollment website requirements.--The procedures 
        established by State under paragraph (1) shall include 
        establishing and having in operation, not later than January 1, 
        2013, an Internet website that is linked to any website of an 
        exchange established by the State under section 2235 and to the 
        State CHIP agency (if different from the State Medicaid agency) 
        and allows an individual who is eligible for medical assistance 
        under the State plan or under a waiver of the plan and who is 
        eligible to receive premium credit assistance for the purchase 
        of a qualified health benefits plan under section 36B of the 
        Internal Revenue Code of 1986 to compare the benefits, 
        premiums, and cost-sharing applicable to the individual under 
        the State plan or waiver with the benefits, premiums, and cost-
        sharing available to the individual under a qualified health 
        benefits plan offered through such an exchange, including, in 
        the case of a child, the coverage that would be provided for 
        the child through the State plan or waiver with the coverage 
        that would be provided to the child through enrollment in 
        family coverage under that plan and as supplemental coverage by 
        the State under the State plan or waiver.
            ``(5) Continued need for assessment for home and community-
        based services.--Nothing in paragraph (1) shall limit or modify 
        the requirement that the State assess an individual for 
        purposes of providing home and community-based services under 
        the State plan or under any waiver of such plan for individuals 
        described in subsection (a)(10)(A)(ii)(VI).
    ``(c) Option for Certain Medicaid-eligible Populations to Elect 
Subsidized Exchange Coverage.--
            ``(1) In general.--The State shall establish procedures to 
        ensure that a non-pregnant, nonelderly adult whose income 
        exceeds 100, but does not exceed 133 percent of the poverty 
        line (as defined in section 2110(c)(5)) who is eligible for 
        medical assistance under the State plan or under a waiver of 
        the plan and who is eligible to receive premium assistance for 
        the purchase of a qualified health benefits plan under section 
        36B of the Internal Revenue Code of 1986 (and advance payment 
        of the assistance under section 2248 of this Act) is--
                    ``(A) provided with the option to elect to enroll 
                themselves, or if applicable, their family, in such a 
                plan through an exchange established by the State under 
                section 2235 instead of enrolling in the State plan 
                under this title or a waiver of the plan and, in the 
                case of the adult, to waive, as a result of making such 
                an election, receipt of any medical assistance 
                (including medical assistance for premiums and cost-
                sharing) under the State plan or waiver;
                    ``(B) provided with--
                            ``(i) information, including through the 
                        State website established under section 
                        1902(e)(15), comparing the benefits and cost-
                        sharing that would be available under the State 
                        plan for the adult, and if applicable, the 
                        adult's family, with the benefits and cost-
                        sharing available to the adult, and if 
                        applicable, the adult's family, through 
                        qualified health benefits plans offered through 
                        such an exchange (including with respect to the 
                        various levels of coverage available to the 
                        adult or family); and
                            ``(ii) an explanation of the key 
                        differences between the benefits and cost-
                        sharing available for the adult, and if 
                        applicable, the adult's family, under the State 
                        plan or a waiver and the benefits and cost-
                        sharing available to the adult or family 
                        through qualified health benefits plans offered 
                        through such an exchange for each of the levels 
                        of coverage available to the adult or family; 
                        and
                    ``(C) if the adult elects to enroll themselves or 
                their family in a plan through such an exchange, 
                provided with assistance in selecting and enrolling in 
                such a plan.
            ``(2) Supplemental coverage, including epsdt benefits, for 
        children.--The State shall establish procedures to ensure that 
        any child who is eligible for medical assistance under the 
        State plan or under a waiver who is enrolled in a qualified 
        health benefits plan through such an exchange is provided with 
        supplemental coverage for items and services for which medical 
        assistance is available under the State plan or waiver and for 
        which benefits are not available under the qualified health 
        benefits plan in which the child is enrolled, including 
        services described in section 1905(a)(4)(B) (relating to early 
        and periodic screening, diagnostic, and treatment services 
        defined in section 1905(r)) and provided in accordance with the 
        requirements of section 1902(a)(43) and medical assistance for 
        premiums and cost-sharing imposed that exceed the amounts 
        permitted under the State plan or waiver and to assure 
        coordination of coverage for the child under the State plan or 
        waiver and under the qualified health benefits plan in which 
        the child is enrolled.
            ``(3) Waiver of receipt of medical assistance for electing 
        adults.--A nonpregnant, nonelderly adult whose income exceeds 
        100, but does not exceed 133 percent of the poverty line (as 
        defined in section 2110(c)(5)) who elects to enroll in a 
        qualified health benefits plan through an exchange established 
        by the State under section 2235 shall waive, as a result of 
        making such an election, being provided with medical assistance 
        for themself (including medical assistance for premiums and 
        cost-sharing) under the State plan or waiver while enrolled in 
        the qualified health benefits plan.
    ``(d) State Contribution for Medicaid-eligible Individuals Electing 
Coverage Through a State Exchange.--
            ``(1) In general.--Each of the 50 States and the District 
        of Columbia shall make an annual payment (beginning with 2014) 
        to the Secretary equal to the sum of the following products 
        determined with respect to each month of the preceding year for 
        each population described in paragraph (2):
                    ``(A) For each such month, the total number of 
                individuals in the population eligible for medical 
                assistance under the State plan or under a waiver of 
                the plan for full benefits (as defined in section 
                1905(y)(2)(B)) who were enrolled in coverage through an 
                exchange established by the State under section 2235 
                for any portion of the month.
                    ``(B) Subject to paragraph (3), for each such 
                month, the average cost of providing medical assistance 
                for the population under the State plan or a waiver of 
                the plan for the preceding year.
                    ``(C) For each such month, the State percentage 
                applicable under subsection (b) or (y) of section 1905 
                to expenditures for providing medical assistance to 
                individuals within the population for that month.
            ``(2) Populations described.--The populations described in 
        this paragraph are the following:
                    ``(A) Children.
                    ``(B) Nondisabled, childless adults under age 65.
                    ``(C) Nondisabled adults under age 65 who are 
                parents.
                    ``(D) Disabled, childless adults under age 65.
                    ``(E) Disabled adults under age 65 who are parents.
            ``(3) Average cost of medical assistance for children.--
        With respect to children, the average cost of providing medical 
        assistance under the State plan or under a waiver of the plan 
        for the preceding year shall be equal to the average cost of 
        providing children under the State plan or waiver essential 
        benefits described in section 2242 (as defined and specified by 
        the Secretary for that year in accordance with subsection (e) 
        of that section).''.

SEC. 1622. PERMITTING HOSPITALS TO MAKE PRESUMPTIVE ELIGIBILITY 
              DETERMINATIONS FOR ALL MEDICAID ELIGIBLE POPULATIONS.

    (a) In General.--Section 1902(a)(47) of the Social Security Act (42 
U.S.C. 1396a(a)(47)) is amended--
            (1) by striking ``at the option of the State, provide'' and 
        inserting ``provide--
                    ``(A) at the option of the State,'';
            (2) by inserting ``and'' after the semicolon; and
            (3) by adding at the end the following:
                    ``(B) that any hospital that is a participating 
                provider under the State plan may elect to be a 
                qualified entity for purposes of determining, on the 
                basis of preliminary information, whether any 
                individual is eligible for medical assistance under the 
                State plan or under a waiver of the plan for purposes 
                of providing the individual with medical assistance 
                during a presumptive eligibility period, in the same 
                manner, and subject to the same requirements, as apply 
                to the State options with respect to populations 
                described in section 1920, 1920A, or 1920B (but without 
                regard to whether the State has elected to provide for 
                a presumptive eligibility period under any such 
                sections), subject to such guidance as the Secretary 
                shall establish;''.
    (b) Conforming Amendment.--Section 1903(u)(1)(D)(v) of such Act (42 
U.S.C. 1396b(u)(1)(D)v)) is amended--
            (1) by striking ``or for'' and inserting ``for''; and
            (2) by inserting before the period at the end the 
        following: ``, or for medical assistance provided to an 
        individual during a presumptive eligibility period resulting 
        from a determination of presumptive eligibility made by a 
        hospital that elects under section 1902(a)(47)(B) to be a 
        qualified entity for such purpose''.
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendment made 
        by subsection (a) shall apply to services furnished on or after 
        January 1, 2014, without regard to whether or not final 
        regulations to carry out such amendment have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act which the Secretary 
        of Health and Human Services determines requires State 
        legislation (other than legislation appropriating funds) in 
        order for the plan to meet the additional requirement imposed 
        by the amendment made by this section, the State plan shall not 
        be regarded as failing to comply with the requirements of such 
        title solely on the basis of its failure to meet this 
        additional requirement before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1623. PROMOTING TRANSPARENCY IN THE DEVELOPMENT, IMPLEMENTATION, 
              AND EVALUATION OF MEDICAID AND CHIP WAIVERS AND SECTION 
              1937 STATE PLAN AMENDMENTS.

    (a) Waiver Transparency.--
            (1) In general.--Section 1115 of the Social Security Act 
        (42 U.S.C. 1315) is amended by inserting after subsection (c) 
        the following:
    ``(d) In the case of any experimental, pilot, or demonstration 
project undertaken under subsection (a) to promote the objectives of 
title XIX or XXI in a State that would result in an impact on 
eligibility, enrollment, benefits, cost-sharing, or financing with 
respect to a State program under title XIX or XXI (in this subsection 
referred to as a `Medicaid demonstration project' and a `CHIP 
demonstration project', respectively,) the following shall apply:
            ``(1) The Secretary may not approve a proposal for a 
        Medicaid demonstration project, CHIP demonstration project, or 
        a renewal of or an amendment to a previously approved Medicaid 
        demonstration project or CHIP demonstration project unless the 
        State requesting approval certifies that the following process 
        was used to develop the proposal:
                    ``(A) At least 30 days prior to publication of the 
                notice required under subparagraph (C), the State 
                provided notice (which may have been accomplished by 
                electronic mail) of the State's intent to develop the 
                proposal to the medical care advisory committee 
                established for the State for purposes of complying 
                with section 1902(a)(4) and any individual or 
                organization that requests or has requested such 
                notice.
                    ``(B) Subsequent to providing the notice required 
                under subparagraph (A) and prior to the notice required 
                under subparagraph (C), the State convened at least 1 
                meeting of such medical care advisory committee at 
                which the proposal and any modifications of the 
                proposal were the primary items considered and 
                discussed.
                    ``(C) At least 60 days prior to the date that the 
                State submits the proposal to the Secretary, the State 
                published for written comment (in accordance with the 
                State's procedure for issuing regulations) a notice of 
                the proposal that contained at least the following:
                            ``(i) Information regarding how the public 
                        may submit comments to the State on the 
                        proposal.
                            ``(ii) A statement of the State's 
                        projections regarding the likely effect and 
                        impact of the proposal on any individuals who 
                        are then eligible for, or receiving, medical 
                        assistance, child health assistance, or other 
                        health benefits coverage under a State program 
                        under title XIX or XXI and the State's 
                        assumptions on which such projections are 
                        based.
                            ``(iii) A statement of the likely fiscal 
                        impact of the proposal, including all relevant 
                        calculations, showing how Federal and State 
                        spending on the project will compare to the 
                        amount of Federal and State funds that would 
                        have been expended had the project not been 
                        implemented.
                    ``(D) Concurrent with the publication of the notice 
                required under subparagraph (C), the State--
                            ``(i) posted the proposal (and any 
                        modifications of the proposal) on the State's 
                        official Medicaid or CHIP Internet website; and
                            ``(ii) provided the notice required under 
                        subparagraph (B) (which may have been 
                        accomplished by electronic mail) to the medical 
                        care advisory committee referred to in 
                        subparagraph (A) and to any individual or 
                        organization that requested such notice.
                    ``(E) Not later than 30 days after publication of 
                the notice required under subparagraph (C), the State 
                convened at least 1 open meeting of the medical care 
                advisory committee referred to in subparagraph (A), at 
                which the proposal and any modifications of the 
                proposal were the primary items considered and 
                discussed.
                    ``(F) After publication of the notice required 
                under subparagraph (C), the State--
                            ``(i) held at least 2 public hearings on 
                        the proposal and any modifications of the 
                        proposal; and
                            ``(ii) held the last such public hearing no 
                        more than 30 days before the State submitted 
                        the proposal to the Secretary.
                    ``(G) The State has a record of all public comments 
                submitted in response to the notice required under 
                subparagraph (B) or at any hearings or meetings 
                required under this paragraph regarding the proposal.
            ``(2) A State shall include with any proposal submitted to 
        the Secretary for a Medicaid demonstration project, CHIP 
        demonstration project, or a renewal of or an amendment to a 
        previously approved Medicaid demonstration project or CHIP 
        demonstration project, the following:
                    ``(A) A detailed description of the public notice 
                and input process used to develop the proposal in 
                accordance with the requirements of paragraph (1).
                    ``(B) Copies of all notices required under 
                paragraph (1).
                    ``(C) The dates of all meetings and hearings 
                required under paragraph (1).
                    ``(D) A summary of the public comments received in 
                response to the notices required under paragraph (1) or 
                at any hearings or meetings required under that 
                paragraph regarding the proposal and the State's 
                response to the comments.
                    ``(E) A summary of any changes in the proposal that 
                were made in response to the comments.
                    ``(F) A certification that the State complied with 
                any applicable notification requirements with respect 
                to Indian tribes during the development of the proposal 
                in accordance with paragraph (1).
            ``(3) The Secretary shall return to a State without action 
        any proposal for a Medicaid demonstration project, CHIP 
        demonstration project, or a renewal of or an amendment to a 
        previously approved Medicaid demonstration project or CHIP 
        demonstration project, that fails to demonstrate compliance 
        with the requirements of paragraphs (1) and (2).
            ``(4) With respect to all proposals for Medicaid 
        demonstration projects, CHIP demonstration projects, or renewal 
        of or amendments to a previously approved Medicaid or CHIP 
        demonstration project, received by the Secretary the following 
        shall apply:
                    ``(A) On or before the 10th day of each month, the 
                Secretary shall publish a notice in the Federal 
                Register identifying all of the proposals for such 
                demonstration projects or amendments that were received 
                by the Secretary during the preceding month.
                    ``(B) The notice required under subparagraph (A) 
                shall provide information regarding the method by which 
                comments on the proposals will be received from the 
                public.
                    ``(C) Not later than 7 days after receipt of a 
                proposal for a Medicaid demonstration project, CHIP 
                demonstration project, or a renewal of or an amendment 
                to a previously approved Medicaid or CHIP demonstration 
                project, the Secretary shall--
                            ``(i) provide notice (which may be 
                        accomplished by electronic mail) to any 
                        individual or organization that requests or has 
                        requested such notification;
                            ``(ii) publish on the official Internet 
                        website of the Centers for Medicare & Medicaid 
                        Services a copy of the proposal, including any 
                        appendices or modifications of the proposal; 
                        and
                            ``(iii) ensure that the information posted 
                        on the website is updated at least monthly to 
                        accurately reflect the current nature and 
                        status of the proposal.
                    ``(D) The Secretary shall provide for a period of 
                not less than 30 days from the later of the date of 
                publication of the notice required under subparagraph 
                (A) that first identifies receipt of the proposal or 
                the date on which an official Internet website 
                containing the information required under subparagraph 
                (C)(ii) with respect to the proposal is first 
                published, in which written comments on the proposal 
                may be submitted from all interested parties.
                    ``(E) After the completion of the public comment 
                period required under subparagraph (D), if the 
                Secretary intends to approve the proposal, as 
                originally submitted or revised, the Secretary shall--
                            ``(i) publish and post on the official 
                        Internet website for the Centers for Medicare & 
                        Medicaid Services the proposed terms and 
                        conditions for such approval and updated 
                        versions of the statements required to be 
                        published by the State under clauses (ii) and 
                        (iii) of paragraph (1)(C);
                            ``(ii) provide at least a 15-day period for 
                        the submission of written comments from all 
                        interested parties on such proposed terms and 
                        conditions and such statements; and
                            ``(iii) retain, and make available upon 
                        request, all comments received concerning the 
                        proposal, the terms and conditions for approval 
                        of the proposal, or the statements required to 
                        be published by the State under clauses (ii) 
                        and (iii) of paragraph (1)(C).
                    ``(F) In no event may the Secretary approve a 
                proposal for a Medicaid or CHIP demonstration project 
                or renewal of or an amendment to a previously approved 
                Medicaid or CHIP demonstration project unless the 
                Secretary determines that the proposal, renewal, or the 
                amendment--
                            ``(i) is based on a reasonable hypothesis 
                        which the Secretary has determined is likely to 
                        assist in promoting the objectives of title XIX 
                        or XXI; and
                            ``(ii) will be evaluated no less frequently 
                        than every 3 years in accordance with paragraph 
                        (6).
                    ``(G) Not later than 3 business days after the 
                approval of any proposal for a Medicaid demonstration 
                project, CHIP demonstration project, or renewal of or 
                amendment to a previously approved Medicaid or CHIP 
                demonstration project, the Secretary shall post on the 
                official Internet website for the Centers for Medicare 
                & Medicaid Services the following:
                            ``(i) The text of the approved Medicaid 
                        demonstration project, CHIP demonstration 
                        project, or renewal of or amendment to a 
                        previously approved Medicaid or CHIP 
                        demonstration project.
                            ``(ii) A list identifying each provision of 
                        title XIX or XXI, and each regulation relating 
                        to either such title, for which compliance is 
                        waived under the approved demonstration project 
                        or amendment and any costs that would otherwise 
                        not be permitted that will be allowed under the 
                        demonstration project or amendment.
                            ``(iii) The terms and conditions for 
                        approval of the demonstration project or 
                        amendment.
                            ``(iv) The approval letter.
                            ``(v) The operations protocol for the 
                        demonstration project or amendment.
                            ``(vi) The evaluation design for the 
                        demonstration project or amendment.
                            ``(vii) Any item required to be posted 
                        under this subparagraph that is not available 
                        within 3 business days of the approval of the 
                        demonstration project or amendment shall be 
                        posted as soon as the item becomes available,
                    ``(H) On or before the 10th day of each month the 
                Secretary shall publish a notice in the Federal 
                Register that identifies any proposals for Medicaid 
                demonstration projects, CHIP demonstration projects, or 
                renewal of or amendments to a previously approved 
                Medicaid or CHIP demonstration project that were 
                approved, denied, or returned to the State without 
                action during the preceding month.
                    ``(I) The Secretary shall post on the official 
                Internet website for the Centers for Medicare and 
                Medicaid Services all quarterly reports submitted by 
                the State (including data on whether the State is 
                meeting its budget neutrality targets), evaluations, 
                and other information the Secretary determines to be 
                appropriate, on Medicaid or CHIP demonstration projects 
                that are operational.
            ``(5) Any provision under title XIX or XXI, or under any 
        regulation in effect that relates to either such title, that is 
        not explicitly waived by the Secretary and identified in the 
        list required under paragraph (4)(G)(ii) when approving the 
        Medicaid demonstration project, CHIP demonstration project, or 
        renewal of or amendment to any such demonstration project, is 
        not waived and a State shall continue to comply with any such 
        requirement.
            ``(6)(A) In the case of a proposal for a Medicaid 
        demonstration project or CHIP demonstration project, the 
        Secretary shall, by contract with a qualified research 
        organization described in subparagraph (B), conduct an 
        independent evaluation consistent with the evaluation criteria 
        described in subparagraph (C) applicable to the individual 
        project.
            ``(B) A qualified research organization described in this 
        subparagraph is an entity that the Secretary determines--
                    ``(i) has staff with demonstrated expertise 
                regarding Medicaid or CHIP beneficiaries, policies, and 
                data systems (as applicable), and research design and 
                methodology; and
                    ``(ii) does not and did not in the past 24 months, 
                by contract or subcontract, directly or indirectly, 
                receive funds from the State that has proposed the 
                demonstration project.
            ``(C) The evaluation criteria described in this 
        subparagraph shall include, but not be limited to, the 
        following:
                    ``(i) The use of services by beneficiaries under 
                the project.
                    ``(ii) The amount of out-of-pocket costs for health 
                care services incurred by beneficiaries under the 
                project.
                    ``(iii) The extent to which special populations 
                such as adults with disabilities, adults with chronic 
                illness, and children with special health care needs 
                are able to access needed health care services.
                    ``(iv) If children are enrolled in the project, the 
                extent to which such children are able to access early 
                and periodic screening, diagnostic, and treatment 
                services described in section 1905(r).
                    ``(v) The level of satisfaction of beneficiaries 
                under the project with respect to the accessibility, 
                quality, and cost of care, including the extent to 
                which beneficiaries under the project understand the 
                choices of health care coverage available to them.
                    ``(vi) The cost of health care services incurred by 
                the State agency administering the project, whether 
                through fee-for-service payments, premium payments, or 
                otherwise.
                    ``(vii) Administrative costs incurred by the State 
                agency administering the project and by any 
                administrative contractors.
            ``(D) The Secretary shall not approve a proposal for a 
        Medicaid demonstration project or a CHIP demonstration project, 
        or a proposal for the extension of such a demonstration 
        project, unless the State agency proposing to administer the 
        demonstration project agrees to cooperate fully with the 
        Secretary to the extent necessary to enable the Secretary to 
        conduct the independent evaluation described in subparagraph 
        (B) including collecting, verifying the accuracy of, and 
        submitting to the organization on a timely basis data needed to 
        conduct the independent evaluation.
            ``(E) The State agency administering the project shall be 
        allowed at least 30 days prior to publication of the 
        independent evaluation to submit comments to the Secretary, and 
        the State agency's comments shall be included in the results of 
        the evaluation.
            ``(F) The results of all evaluations conducted under this 
        paragraph with respect to a Medicaid demonstration project or 
        CHIP demonstration project shall be submitted to the Committee 
        on Finance of the Senate and the Committee on Energy and 
        Commerce of the House of Representatives not later than 6 
        months prior to the completion of the initial term of a 
        demonstration project and shall thereafter be posted on the 
        official Internet website of the Centers for Medicare & 
        Medicaid Services.
            ``(G) Out of any money in the Treasury of the United States 
        not otherwise appropriated, there are appropriated to the 
        Secretary, $4,500,000 for fiscal year 2010 and each fiscal year 
        thereafter, for the purpose of carrying out the independent 
        evaluations required under this paragraph. Amounts appropriated 
        under this subparagraph for a fiscal year shall remain 
        available until expended.''.
            (2) Rule of construction.--Nothing in the amendment made by 
        subsection (a) shall be construed to--
                    (A) authorize the waiver of any provision of title 
                XIX or XXI of the Social Security Act (42 U.S.C. 1396 
                et seq., 1397aa et seq.) that is not otherwise 
                authorized to be waived under such titles or under 
                title XI of such Act (42 U.S.C. 1301 et seq.) as of the 
                date of enactment of this Act; or
                    (B) imply congressional approval of any 
                experimental, pilot, or demonstration project affecting 
                the Medicaid program under title XIX of the Social 
                Security Act or the Children's health insurance program 
                under title XXI of such Act that has been approved as 
                of such date of enactment.
    (b) Transparency for Certain State Plan Amendments.--Section 1937 
of such Act (42 U.S.C. 1396u-7) is amended by adding at the end the 
following:
    ``(d) State Plan Amendment Approval Requirements.--In the case of 
any State plan amendment proposed under subsection (a) that would limit 
the benefits eligible individuals would receive, the following shall 
apply:
            ``(1) The Secretary may not approve a proposal for the 
        amendment unless the State requesting approval certifies that 
        the following process was used to develop the amendment:
                    ``(A) Prior to publication of the notice required 
                under subparagraph (B), the State--
                            ``(i) provided notice (which may have been 
                        accomplished by electronic mail) of the State's 
                        intent to develop the State plan amendment to 
                        the medical care advisory committee established 
                        for the State for purposes of complying with 
                        section 1902(a)(4) and any individual or 
                        organization that requests such notice; and
                            ``(ii) convened at least 1 meeting of such 
                        medical care advisory committee at which the 
                        State plan amendment was considered and 
                        discussed.
                    ``(B) At least 60 days prior to the date that the 
                State submits the State plan amendment to the 
                Secretary, the State published for written comment (in 
                accordance with the State's procedure for issuing 
                regulations) a notice of the proposal that contains at 
                least the following:
                            ``(i) Information regarding how the public 
                        may submit comments to the State on the State 
                        plan amendment.
                            ``(ii) A statement of the State's 
                        projections regarding the likely effect and 
                        impact of the proposal on any individuals who 
                        are eligible for, or receiving, medical 
                        assistance, under the State program under this 
                        title and the State's assumptions on which the 
                        projections are based.
                    ``(C) Concurrent with the publication of the notice 
                required under subparagraph (B), the State--
                            ``(i) posted the State plan amendment on 
                        the State's official Medicaid or CHIP Internet 
                        website; and
                            ``(ii) provided the notice (which may have 
                        been accomplished by electronic mail) to the 
                        medical care advisory committee referred to in 
                        subparagraph (A)(i) and to any individual or 
                        organization that requested such notice.
                    ``(D) Not later than 30 days after publication of 
                the notice required under subparagraph (B), the State 
                convened at least 1 open meeting of the medical care 
                advisory committee referred to in subparagraph (A)(i), 
                at which the State plan amendment was considered and 
                discussed.
            ``(2) A State shall include with any State plan amendment 
        submitted to the Secretary for approval the following:
                    ``(A) A detailed description of the public notice 
                and input process used to develop the State plan 
                amendment in accordance with the requirements of 
                paragraph (1).
                    ``(B) Copies of all notices required under 
                paragraph (1).
                    ``(C) The dates of all meetings required under 
                paragraph (1).
                    ``(D) A certification that the State complied with 
                any applicable notification requirements with respect 
                to Indian tribes during the development of the proposal 
                in accordance with paragraph (1).
            ``(3) The Secretary shall return to a State without action 
        any State plan amendment that fails to satisfy the requirements 
        of paragraphs (1) and (2).
            ``(4) With respect to all State plan amendments submitted 
        for approval to the Secretary under this section the following 
        shall apply:
                    ``(A) On or before the 10th day of each month the 
                Secretary shall publish a notice in the Federal 
                Register identifying all the State plan amendments 
                submitted for approval during the preceding month.
                    ``(B) The notice required under subparagraph (A) 
                shall provide information regarding the method by which 
                comments on the proposals will be received from the 
                public.
                    ``(C) Not later than 7 days after submission of a 
                State plan amendment for approval the Secretary shall--
                            ``(i) provide notice (which may be 
                        accomplished by electronic mail) to any 
                        individual or organization that has requested 
                        such notification; and
                            ``(ii) publish on the official Internet 
                        website of the Centers for Medicare & Medicaid 
                        Services a copy of the State plan amendment.
                    ``(D) The Secretary shall provide for a period of 
                not less than 30 days from the later of the date of 
                publication of the notice required under subparagraph 
                (A) that first identifies receipt of the State plan 
                amendment or the date on which an official Internet 
                website containing the information required under 
                subparagraph (C)(ii) with respect to the State plan 
                amendment is first published, in which written comments 
                on the State plan amendment may be submitted from all 
                interested parties.
                    ``(E) On or before the 10th day of each month the 
                Secretary shall publish a notice in the Federal 
                Register that identifies any State plan amendments that 
                were approved, denied, or returned to the State without 
                action during the preceding month.''.
    (c) Effective Dates.--
            (1) Section 1115 requirements.--Subject to paragraph (2), 
        the amendment made by subsection (a) shall take effect on the 
        date of enactment of this Act and shall apply to--
                    (A) any proposal to conduct any experimental, pilot 
                or demonstration project affecting the Medicaid program 
                under title XIX of the Social Security Act or the State 
                Children's Health Insurance Program under title XXI of 
                such Act that is pending on the date of enactment or 
                that is submitted to the Secretary after the date of 
                enactment;
                    (B) any proposal to extend such a project that is 
                pending on the date of enactment or that is submitted 
                to the Secretary after the date of enactment; and
                    (C) any proposal to amend such a project that is 
                pending on the date of enactment or that is submitted 
                to the Secretary after the date of enactment.
            (2) Evaluation requirements applicable to new waivers.--The 
        requirements of section 1115(d)(6) of the Social Security Act 
        (relating to evaluation), as added by subsection (a), shall 
        apply only to a proposal described in paragraph (1)(A) of this 
        subsection.
            (3) Certain state plan amendments.--The amendment made by 
        subsection (b) shall take effect on the date of enactment of 
        this Act and shall apply to any State plan amendment for which 
        approval is pending on the date of enactment or that is 
        submitted to the Secretary of Health and Human Services for 
        approval after the date of enactment of this Act.

SEC. 1624. STANDARDS AND BEST PRACTICES TO IMPROVE ENROLLMENT OF 
              VULNERABLE AND UNDERSERVED POPULATIONS.

    (a) In General.--Not later than April 1, 2011, the Secretary of 
Health and Human Services shall issue guidance to States regarding 
standards and best practices for conducting outreach to and enrolling 
vulnerable and underserved populations eligible for medical assistance 
under Medicaid under title XIX of the Social Security Act or for child 
health assistance under CHIP under title XXI of such Act, including 
children, unaccompanied homeless youth, children and youth with special 
health care needs, pregnant women, racial and ethnic minorities, rural 
populations, victims of abuse or trauma, individuals with mental health 
or substance-related disorders, and individuals with HIV/AIDS.
    (b) Requirements.--
            (1) In general.--The guidance issued under subsection (a) 
        shall--
                    (A) detail effective ways to inform vulnerable 
                populations about coverage available under Medicaid and 
                CHIP;
                    (B) identify ways to assist vulnerable populations 
                to enroll in the programs;
                    (C) identify ways that application and enrollment 
                barriers for such populations can be eliminated; and
                    (D) address specific methods for outreach and 
                enrollment, including outstationing of eligibility 
                workers, the Express Lane eligibility option, residency 
                requirements, documentation of income and assets, 
                presumptive eligibility, continuous eligibility, and 
                automatic renewal.
            (2) Development and implementation.--The Secretary of 
        Health and Human Services may use all available legal authority 
        and shall work with appropriate stakeholders, including 
        representatives of States and children's groups, to ensure that 
        the guidance issued under subsection (a) is developed and 
        implemented effectively.
            (3) Report to congress.--Not later than 2 years after the 
        enactment of this Act and annually thereafter, the Secretary of 
        Health and Human Services shall review and report to Congress 
        on the progress made by States in implementing the standards 
        and best practices identified in the guidance issued under 
        subsection (a) and increasing the enrollment of vulnerable 
        populations under Medicaid and CHIP.

                       PART IV--MEDICAID SERVICES

SEC. 1631. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), is amended--
            (1) in subsection (a)--
                    (A) in paragraph (27), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (28) as paragraph 
                (29); and
                    (C) by inserting after paragraph (27) the following 
                new paragraph:
            ``(28) freestanding birth center services (as defined in 
        subsection (l)(3)(A)) and other ambulatory services that are 
        offered by a freestanding birth center (as defined in 
        subsection (l)(3)(B)) and that are otherwise included in the 
        plan; and''; and
            (2) in subsection (l), by adding at the end the following 
        new paragraph:
    ``(3)(A) The term `freestanding birth center services' means 
services furnished to an individual at a freestanding birth center (as 
defined in subparagraph (B)) at such center.
    ``(B) The term `freestanding birth center' means a health 
facility--
            ``(i) that is not a hospital;
            ``(ii) where childbirth is planned to occur away from the 
        pregnant woman's residence;
            ``(iii) that is licensed or otherwise approved by the State 
        to provide prenatal labor and delivery or postpartum care and 
        other ambulatory services that are included in the plan; and
            ``(iv) that complies with such other requirements relating 
        to the health and safety of individuals furnished services by 
        the facility as the State shall establish.
    ``(C) A State shall provide separate payments to providers 
administering prenatal labor and delivery or postpartum care in a 
freestanding birth center (as defined in subparagraph (B)), such as 
nurse midwives and other providers of services such as birth attendants 
recognized under State law, as determined appropriate by the Secretary. 
For purposes of the preceding sentence, the term `birth attendant' 
means an individual who is recognized or registered by the State 
involved to provide health care at childbirth and who provides such 
care within the scope of practice under which the individual is legally 
authorized to perform such care under State law (or the State 
regulatory mechanism provided by State law), regardless of whether the 
individual is under the supervision of, or associated with, a physician 
or other health care provider. Nothing in this subparagraph shall be 
construed as changing State law requirements applicable to a birth 
attendant.''.
    (b) Conforming Amendment.--Section 1902(a)(10)(A) of the Social 
Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the matter 
preceding clause (i) by striking ``and (21)'' and inserting ``, (21), 
and (28)''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act and shall apply to services 
        furnished on or after such date.
            (2) Exception if state legislation required.--In the case 
        of a State plan for medical assistance under title XIX of the 
        Social Security Act which the Secretary of Health and Human 
        Services determines requires State legislation (other than 
        legislation appropriating funds) in order for the plan to meet 
        the additional requirement imposed by the amendments made by 
        this section, the State plan shall not be regarded as failing 
        to comply with the requirements of such title solely on the 
        basis of its failure to meet this additional requirement before 
        the first day of the first calendar quarter beginning after the 
        close of the first regular session of the State legislature 
        that begins after the date of the enactment of this Act. For 
        purposes of the previous sentence, in the case of a State that 
        has a 2-year legislative session, each year of such session 
        shall be deemed to be a separate regular session of the State 
        legislature.

SEC. 1632. CONCURRENT CARE FOR CHILDREN.

    Section 1905(o)(1) of the Social Security Act (42 U.S.C. 
1396d(o)(1)) is amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (C)''; and
            (2) by adding at the end the following new subparagraph:
    ``(C) A voluntary election to have payment made for hospice care 
for a child (as defined by the State) shall not constitute a waiver of 
any rights of the child to be provided with, or to have payment made 
under this title for, services that are related to the treatment of the 
child's condition for which a diagnosis of terminal illness has been 
made.''.

SEC. 1633. FUNDING TO EXPAND STATE AGING AND DISABILITY RESOURCE 
              CENTERS.

    Out of any funds in the Treasury not otherwise appropriated, there 
is appropriated to the Secretary of Health and Human Services, acting 
through the Assistant Secretary for Aging, $10,000,000 for each of 
fiscal years 2010 through 2014, to carry out subsections 
(a)(20)(B)(iii) and (b)(8) of section 202 of the Older Americans Act of 
1965 (42 U.S.C. 3012).

SEC. 1634. COMMUNITY FIRST CHOICE OPTION.

    Section 1915 of the Social Security Act (42 U.S.C. 1396n) is 
amended by adding at the end the following:
    ``(k) State Plan Option to Provide Home and Community-based 
Attendant Services and Supports.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, during the 5-year period that begins on 
        January 1, 2014, a State may provide through a State plan 
        amendment for the provision of medical assistance for home and 
        community-based attendant services and supports for individuals 
        who are eligible for medical assistance under the State plan 
        whose income does not exceed 150 percent of the poverty line 
        (as defined in section 2110(c)(5)) or, if greater, the income 
        level applicable for an individual who has been determined to 
        require an institutional level of care to be eligible for 
        nursing facility services under the State plan and with respect 
        to whom there has been a determination that, but for the 
        provision of such services, the individuals would require the 
        level of care provided in a hospital, a nursing facility, an 
        intermediate care facility for the mentally retarded, or an 
        institution for mental diseases, the cost of which could be 
        reimbursed under the State plan, but only if the individual 
        chooses to receive such home and community-based attendant 
        services and supports, and only if the State meets the 
        following requirements:
                    ``(A) Availability.--The State shall make available 
                home and community-based attendant services and 
                supports to eligible individuals, as needed, to assist 
                in accomplishing activities of daily living, 
                instrumental activities of daily living, and health-
                related tasks through hands-on assistance, supervision, 
                or cueing--
                            ``(i) under a person-centered plan of 
                        services and supports that is based on an 
                        assessment of functional need and that is 
                        agreed to in writing by the individual or, as 
                        appropriate, the individual's representative;
                            ``(ii) in a home or community setting, 
                        which does not include a nursing facility, 
                        institution for mental diseases, or an 
                        intermediate care facility for the mentally 
                        retarded;
                            ``(iii) under an agency-provider model or 
                        other model (as defined in paragraph (6)(C )); 
                        and
                            ``(iv) the furnishing of which--
                                    ``(I) is selected, managed, and 
                                dismissed by the individual, or, as 
                                appropriate, with assistance from the 
                                individual's representative;
                                    ``(II) is controlled, to the 
                                maximum extent possible, by the 
                                individual or where appropriate, the 
                                individual's representative, regardless 
                                of who may act as the employer of 
                                record; and
                                    ``(III) provided by an individual 
                                who is qualified to provide such 
                                services, including family members (as 
                                defined by the Secretary).
                    ``(B) Included services and supports.--In addition 
                to assistance in accomplishing activities of daily 
                living, instrumental activities of daily living, and 
                health related tasks, the home and community-based 
                attendant services and supports made available 
                include--
                            ``(i) the acquisition, maintenance, and 
                        enhancement of skills necessary for the 
                        individual to accomplish activities of daily 
                        living, instrumental activities of daily 
                        living, and health related tasks;
                            ``(ii) back-up systems or mechanisms (such 
                        as the use of beepers or other electronic 
                        devices) to ensure continuity of services and 
                        supports; and
                            ``(iii) voluntary training on how to 
                        select, manage, and dismiss attendants.
                    ``(C) Excluded services and supports.--Subject to 
                subparagraph (D), the home and community-based 
                attendant services and supports made available do not 
                include--
                            ``(i) room and board costs for the 
                        individual;
                            ``(ii) special education and related 
                        services provided under the Individuals with 
                        Disabilities Education Act and vocational 
                        rehabilitation services provided under the 
                        Rehabilitation Act of 1973;
                            ``(iii) assistive technology devices and 
                        assistive technology services other than those 
                        under (1)(B)(ii);
                            ``(iv) medical supplies and equipment; or
                            ``(v) home modifications.
                    ``(D) Permissible services and supports.--The home 
                and community-based attendant services and supports may 
                include--
                            ``(i) expenditures for transition costs 
                        such as rent and utility deposits, first 
                        month's rent and utilities, bedding, basic 
                        kitchen supplies, and other necessities 
                        required for an individual to make the 
                        transition from a nursing facility, institution 
                        for mental diseases, or intermediate care 
                        facility for the mentally retarded to a 
                        community-based home setting where the 
                        individual resides; and
                            ``(ii) expenditures relating to a need 
                        identified in an individual's person-centered 
                        plan of services that increase independence or 
                        substitute for human assistance, to the extent 
                        that expenditures would otherwise be made for 
                        the human assistance.
            ``(2) Increased federal financial participation.--For 
        purposes of payments to a State under section 1903(a)(1), with 
        respect to amounts expended by the State to provide medical 
        assistance under the State plan for home and community-based 
        attendant services and supports to eligible individuals in 
        accordance with this subsection during a fiscal year quarter 
        occurring during the period described in paragraph (1), the 
        Federal medical assistance percentage applicable to the State 
        (as determined under sections 1905(b) and 1902(gg)(5)) shall be 
        increased by 6 percentage points.
            ``(3) State requirements.--In order for a State plan 
        amendment to be approved under this subsection, the State 
        shall--
                    ``(A) develop and implement such amendment in 
                collaboration with a Development and Implementation 
                Council established by the State that includes a 
                majority of members with disabilities, elderly 
                individuals, and their representatives and consults and 
                collaborates with such individuals;
                    ``(B) provide consumer controlled home and 
                community-based attendant services and supports to 
                individuals on a statewide basis, in a manner that 
                provides such services and supports in the most 
                integrated setting appropriate to the individual's 
                needs, and without regard to the individual's age, type 
                or nature of disability, severity of disability, or the 
                form of home and community-based attendant services and 
                supports that the individual requires in order to lead 
                an independent life;
                    ``(C) with respect to expenditures during the first 
                full fiscal year in which the State plan amendment is 
                implemented, maintain or exceed the level of State 
                expenditures for medical assistance that is provided 
                under section 1905(a), section 1915, section 1115, or 
                otherwise to individuals with disabilities or elderly 
                individuals attributable to the preceding fiscal year;
                    ``(D) establish and maintain a comprehensive, 
                continuous quality assurance system with respect to 
                community- based attendant services and supports that--
                            ``(i) includes standards for agency-based 
                        and other delivery models with respect to 
                        training, appeals for denials and 
                        reconsideration procedures of an individual 
                        plan, and other factors as determined by the 
                        Secretary;
                            ``(ii) incorporates feedback from consumers 
                        and their representatives, disability 
                        organizations, providers, families of disabled 
                        or elderly individuals, members of the 
                        community, and others and maximizes consumer 
                        independence and consumer control;
                            ``(iii) monitors the health and well-being 
                        of each individual who receives home and 
                        community-based attendant services and 
                        supports, including a process for the mandatory 
                        reporting, investigation, and resolution of 
                        allegations of neglect, abuse, or exploitation 
                        in connection with the provision of such 
                        services and supports; and
                            ``(iv) provides information about the 
                        provisions of the quality assurance required 
                        under clauses (i) through (iii) to each 
                        individual receiving such services; and
                    ``(E) collect and report information, as determined 
                necessary by the Secretary, for the purposes of 
                approving the State plan amendment, providing Federal 
                oversight, and conducting an evaluation under paragraph 
                (5)(A), including data regarding how the State provides 
                home and community-based attendant services and 
                supports and other home and community-based services, 
                the cost of such services and supports, and how the 
                State provides individuals with disabilities who 
                otherwise qualify for institutional care under the 
                State plan or under a waiver the choice to instead 
                receive home and community-based services in lieu of 
                institutional care.
            ``(4) Compliance with certain laws.--A State shall ensure 
        that, regardless of whether the State uses an agency-provider 
        model or other models to provide home and community-based 
        attendant services and supports under a State plan amendment 
        under this subsection, such services and supports are provided 
        in accordance with the requirements of the Fair Labor Standards 
        Act of 1938 and applicable Federal and State laws regarding--
                    ``(A) withholding and payment of Federal and State 
                income and payroll taxes;
                    ``(B) the provision of unemployment and workers 
                compensation insurance;
                    ``(C) maintenance of general liability insurance; 
                and
                    ``(D) occupational health and safety.
            ``(5) Evaluation, data collection, and report to 
        congress.--
                    ``(A) Evaluation.--The Secretary shall conduct an 
                evaluation of the provision of home and community-based 
                attendant services and supports under this subsection 
                in order to determine the effectiveness of the 
                provision of such services and supports in allowing the 
                individuals receiving such services and supports to 
                lead an independent life to the maximum extent 
                possible; the impact on the physical and emotional 
                health of the individuals who receive such services; 
                and an comparative analysis of the costs of services 
                provided under the State plan amendment under this 
                subsection and those provided under institutional care 
                in a nursing facility, institution for mental diseases, 
                or an intermediate care facility for the mentally 
                retarded.
                    ``(B) Data collection.--The State shall provide the 
                Secretary with the following information regarding the 
                provision of home and community-based attendant 
                services and supports under this subsection for each 
                fiscal year for which such services and supports are 
                provided:
                            ``(i) The number of individuals who are 
                        estimated to receive home and community-based 
                        attendant services and supports under this 
                        subsection during the fiscal year.
                            ``(ii) The number of individuals that 
                        received such services and supports during the 
                        preceding fiscal year.
                            ``(iii) The specific number of individuals 
                        served by type of disability, age, gender, 
                        education level, and employment status.
                            ``(iv) Whether the specific individuals 
                        have been previously served under any other 
                        home and community based services program under 
                        the State plan or under a waiver.
                    ``(C) Reports.--Not later than--
                            ``(i) December 31, 2017, the Secretary 
                        shall submit to Congress and make available to 
                        the public an interim report on the findings of 
                        the evaluation under subparagraph (A); and
                            ``(ii) December 31, 2019, the Secretary 
                        shall submit to Congress and make available to 
                        the public a final report on the findings of 
                        the evaluation under subparagraph (A).
            ``(6) Definitions.--In this subsection:
                    ``(A) Activities of daily living.--The term 
                `activities of daily living' includes tasks such as 
                eating, toileting, grooming, dressing, bathing, and 
                transferring.
                    ``(B) Consumer controlled.--The term `consumer 
                controlled' means a method of selecting and providing 
                services and supports that allow the individual, or 
                where appropriate, the individual's representative, 
                maximum control of the home and community-based 
                attendant services and supports, regardless of who acts 
                as the employer of record.
                    ``(C) Delivery models.--
                            ``(i) Agency-provider model.--The term 
                        `agency-provider model' means, with respect to 
                        the provision of home and community-based 
                        attendant services and supports for an 
                        individual, subject to paragraph (4), a method 
                        of providing consumer controlled services and 
                        supports under which entities contract for the 
                        provision of such services and supports.
                            ``(ii) Other models.--The term `other 
                        models' means, subject to paragraph (4), 
                        methods, other than an agency-provider model, 
                        for the provision of consumer controlled 
                        services and supports. Such models may include 
                        the provision of vouchers, direct cash 
                        payments, or use of a fiscal agent to assist in 
                        obtaining services.
                    ``(D) Health-related tasks.--The term `health-
                related tasks' means specific tasks related to the 
                needs of an individual, which can be delegated or 
                assigned by licensed health-care professionals under 
                State law to be performed by an attendant.
                    ``(E) Individual's representative.--The term 
                `individual's representative' means a parent, family 
                member, guardian, advocate, or other authorized 
                representative of an individual
                    ``(F) Instrumental activities of daily living.--The 
                term `instrumental activities of daily living' includes 
                (but is not limited to) meal planning and preparation, 
                managing finances, shopping for food, clothing, and 
                other essential items, performing essential household 
                chores, communicating by phone or other media, and 
                traveling around and participating in the community.''.

SEC. 1635. PROTECTION FOR RECIPIENTS OF HOME AND COMMUNITY-BASED 
              SERVICES AGAINST SPOUSAL IMPOVERISHMENT.

    During the 5-year period that begins on January 1, 2014, section 
1924(h)(1)(A) of the Social Security Act (42 U.S.C. 1396r-5(h)(1)(A)) 
shall be applied as though ``is eligible for medical assistance for 
home and community-based services provided under subsection (c), (d), 
or (i) of section 1915, under a waiver approved under section 1115, or 
who is eligible for such medical assistance by reason of being 
determined eligible under section 1902(a)(10)(C) or by reason of 
section 1902(f) or otherwise on the basis of a reduction of income 
based on costs incurred for medical or other remedial care, or who is 
eligible for medical assistance for home and community-based attendant 
services and supports under section 1915(k)'' were substituted in such 
section for ``(at the option of the State) is described in section 
1902(a)(10)(A)(ii)(VI)''.

SEC. 1636. INCENTIVES FOR STATES TO OFFER HOME AND COMMUNITY-BASED 
              SERVICES AS A LONG-TERM CARE ALTERNATIVE TO NURSING 
              HOMES.

    (a) State Balancing Incentive Payments Program.--Notwithstanding 
section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), in the 
case of a balancing incentive payment State, as defined in subsection 
(b), that meets the conditions described in subsection (c), during the 
balancing incentive period, the Federal medical assistance percentage 
determined for the State under section 1905(b) of such Act and 
increased under section 1902(gg)(5) shall be increased by the 
applicable percentage points determined under subsection (d) with 
respect to eligible medical assistance expenditures described in 
subsection (e).
    (b) Balancing Incentive Payment State.--A balancing incentive 
payment State is a State--
            (1) in which less than 50 percent of the total expenditures 
        for medical assistance under the State Medicaid program for 
        fiscal year 2009 for long-term services and supports (as 
        defined by the Secretary under subsection (f))(1)) are for non-
        institutionally-based long-term services and supports described 
        in subsection (f)(1)(B);
            (2) that submits an application and meets the conditions 
        described in subsection (c); and
            (3) that is selected by the Secretary to participate in the 
        State balancing incentive payment program established under 
        this section.
    (c) Conditions.--The conditions described in this subsection are 
the following:
            (1) Application.--The State submits an application to the 
        Secretary that includes, in addition to such other information 
        as the Secretary shall require--
                    (A) a proposed budget that details the State's plan 
                to expand and diversify medical assistance for non-
                institutionally-based long-term services and supports 
                described in subsection (f)(1)(B) under the State 
                Medicaid program during the balancing incentive period 
                and achieve the target spending percentage applicable 
                to the State under paragraph (2), including through 
                structural changes to how the State furnishes such 
                assistance, such as through the establishment of a ``no 
                wrong door - single entry point system'', optional 
                presumptive eligibility, case management services, and 
                the use of core standardized assessment instruments, 
                and that includes a description of the new or expanded 
                offerings of such services that the State will provide 
                and the projected costs of such services; and
                    (B) in the case of a State that proposes to expand 
                the provision of home and community-based services 
                under its State Medicaid program through a State plan 
                amendment under section 1915(i) of the Social Security 
                Act, at the option of the State, an election to 
                increase the income eligibility for such services from 
                150 percent of the poverty line to such higher 
                percentage as the State may establish for such purpose, 
                not to exceed 300 percent of the supplemental security 
                income benefit rate established by section 1611(b)(1) 
                of the Social Security Act (42 U.S.C. 1382(b)(1)).
            (2) Target spending percentages.--
                    (A) In the case of a balancing incentive payment 
                State in which less than 25 percent of the total 
                expenditures for home and community-based services 
                under the State Medicaid program for fiscal year 2009 
                are for such services, the target spending percentage 
                for the State to achieve by not later than October 1, 
                2015, is that 25 percent of the total expenditures for 
                home and community-based services under the State 
                Medicaid program are for such services.
                    (B) In the case of any other balancing incentive 
                payment State, the target spending percentage for the 
                State to achieve by not later than October 1, 2015, is 
                that 50 percent of the total expenditures for home and 
                community-based services under the State Medicaid 
                program are for such services.
            (3) Maintenance of eligibility requirements.--The State 
        does not apply eligibility standards, methodologies, or 
        procedures for determining eligibility for medical assistance 
        for non-institutionally-based long-term services and supports 
        described in subsection (f)(1)(B) under the State Medicaid 
        program that are more restrictive than the eligibility 
        standards, methodologies, or procedures in effect for such 
        purposes on December 31, 2010.
            (4) Use of additional funds.--The State agrees to use the 
        additional Federal funds paid to the State as a result of this 
        section only for purposes of providing new or expanded 
        offerings of non-institutionally-based long-term services and 
        supports described in subsection (f)(1)(B) under the State 
        Medicaid program.
            (5) Structural changes.--The State agrees to make, not 
        later than the end of the 6-month period that begins on the 
        date the State submits an application under this section, the 
        following changes:
                    (A) ``No wrong door''--single entry point system.--
                Development of a statewide system to enable consumers 
                to access all long-term services and supports through 
                an agency, organization, coordinated network, or 
                portal, in accordance with such standards as the State 
                shall establish and that shall provide information 
                regarding the availability of such services, how to 
                apply for such services, and referral services for 
                services and supports otherwise available in the 
                community ; and determinations of financial and 
                functional eligibility for such services and supports, 
                or assistance with assessment processes for financial 
                and functional eligibility.
                    (B) Conflict-free case management services.--
                Conflict-free case management services to develop a 
                service plan, arrange for services and supports, 
                support the beneficiary (and, if appropriate, the 
                beneficiary's caregivers) in directing the provision of 
                services and supports, for the beneficiary, and conduct 
                ongoing monitoring to assure that services and supports 
                are delivered to meet the beneficiary's needs and 
                achieve intended outcomes.
                    (C) Core standardized assessment instruments.--
                Development of core standardized assessment instruments 
                for determining eligibility for non-institutionally-
                based long-term services and supports described in 
                subsection (f)(1)(B), which shall be used in a uniform 
                manner throughout the State, to determine a 
                beneficiary's needs for training, support services, 
                medical care, transportation, and other services, and 
                develop an individual service plan to address such 
                needs.
            (6) Data collection.--The State agrees to collect from 
        providers of services and through such other means as the State 
        determines appropriate the following data:
                    (A) Services data.--Services data from providers of 
                non-institutionally-based long-term services and 
                supports described in subsection (f)(1)(B) on a per-
                beneficiary basis and in accordance with such 
                standardized coding procedures as the State shall 
                establish in consultation with the Secretary.
                    (B) Quality data.--Quality data on a selected set 
                of core quality measures agreed upon by the Secretary 
                and the State that are linked to population-specific 
                outcomes measures and accessible to providers.
                    (C) Outcomes measures.--Outcomes measures data on a 
                selected set of core population-specific outcomes 
                measures agreed upon by the Secretary and the State 
                that are accessible to providers and include--
                            (i) measures of beneficiary and family 
                        caregiver experience with providers;
                            (ii) measures of beneficiary and family 
                        caregiver satisfaction with services; and
                            (iii) measures for achieving desired 
                        outcomes appropriate to a specific beneficiary, 
                        including employment, participation in 
                        community life, health stability, and 
                        prevention of loss in function.
    (d) Applicable Percentage Points Increase in FMAP.--The applicable 
percentage points increase is--
            (1) in the case of a balancing incentive payment State 
        subject to the target spending percentage described in 
        subsection (c)(2)(A), 5 percentage points; and
            (2) in the case of any other balancing incentive payment 
        State, 2 percentage points.
    (e) Eligible Medical Assistance Expenditures.--
            (1) In general.--Subject to paragraph (2), medical 
        assistance described in this subsection is medical assistance 
        for non-institutionally-based long-term services and supports 
        described in subsection (f)(1)(B) that is provided by a 
        balancing incentive payment State under its State Medicaid 
        program during the balancing incentive payment period.
            (2) Limitation on payments.--In no case may the aggregate 
        amount of payments made by the Secretary to balancing incentive 
        payment States under this section during the balancing 
        incentive period exceed $3,000,000,000.
    (f) Definitions.--In this section:
            (1) Long-term services and supports defined.--The term 
        ``long-term services and supports'' has the meaning given that 
        term by Secretary and shall include the following (as defined 
        with for purposes of State Medicaid programs under title XIX of 
        the Social Security Act):
                    (A) Institutionally-based long-term services and 
                supports.--Services provided in an institution, 
                including the following:
                            (i) Nursing facility services.
                            (ii) Services in an intermediate care 
                        facility for the mentally retarded described in 
                        subsection (a)(15) of section 1905 of such Act.
                    (B) Non-institutionally-based long-term services 
                and supports.--Services not provided in an institution, 
                including the following:
                            (i) Home and community-based services 
                        provided under subsection (c), (d), or (i), of 
                        section 1915 of such Act or under a waiver 
                        under section 1115 of such Act.
                            (ii) Home health care services.
                            (iii) Personal care services.
                            (iv) Services described in subsection 
                        (a)(26) of section 1905 of such Act (relating 
                        to PACE program services).
                            (v) Self-directed personal assistance 
                        services described in section 1915(j) of such 
                        Act.
            (2) Balancing incentive period.--The term ``balancing 
        incentive period'' means the period that begins on October 1, 
        2011, and ends on September 30, 2015.
            (3) Poverty line.--The term ``poverty line'' has the 
        meaning given that term in section 2110(c)(5) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(5)).
            (4) State medicaid program.--The term ``State Medicaid 
        program'' means the State program for medical assistance 
        provided under a State plan under title XIX of the Social 
        Security Act and under any waiver approved with respect to such 
        State plan.

SEC. 1636A. REMOVAL OF BARRIERS TO PROVIDING HOME AND COMMUNITY-BASED 
              SERVICES.

    (a) Oversight and Assessment of the Administration of Home and 
Community-based Services.--The Secretary of Health and Human Services 
shall promulgate regulations to ensure that all States develop service 
systems that are designed to--
            (1) allocate resources for services in a manner that is 
        responsive to the changing needs and choices of beneficiaries 
        receiving non-institutionally-based long-term services and 
        supports described in section 1936(f)(1)(B) (including such 
        services and supports that are provided under programs other 
        the State Medicaid program), and that provides strategies for 
        beneficiaries receiving such services to maximize their 
        independence;
            (2) provide the support and coordination needed for a 
        beneficiary in need of such services (and their family 
        caregivers or representative, if applicable) to design an 
        individualized, self-directed, community-supported life; and
            (3) improve coordination among all providers of such 
        services under federally and State-funded programs in order 
        to--
                    (A) achieve a more consistent administration of 
                policies and procedures across programs in relation to 
                the provision of such services; and
                    (B) oversee and monitor all service system 
                functions to assure--
                            (i) coordination of, and effectiveness of, 
                        eligibility determinations and individual 
                        assessments; and
                            (ii) development and service monitoring of 
                        a complaint system, a management system, a 
                        system to qualify and monitor providers, and 
                        systems for role-setting and individual budget 
                        determinations.
    (b) Additional State Options.--Section 1915(i) of the Social 
Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the 
following new paragraphs:
            ``(6) State option to provide home and community-based 
        services to individuals eligible for services under a waiver.--
                    ``(A) In general.--A State that provides home and 
                community-based services in accordance with this 
                subsection to individuals who satisfy the needs-based 
                criteria for the receipt of such services established 
                under paragraph (1)(A) may, in addition to continuing 
                to provide such services to such individuals, elect to 
                provide home and community-based services in accordance 
                with the requirements of this paragraph to individuals 
                who are eligible for home and community-based services 
                under a waiver approved for the State under subsection 
                (c), (d), or (e) or under section 1115 to provide such 
                services, but only for those individuals whose income 
                does not exceed 300 percent of the supplemental 
                security income benefit rate established by section 
                1611(b)(1).
                    ``(B) Application of same requirements for 
                individuals satisfying needs-based criteria.--Subject 
                to subparagraph (C), a State shall provide home and 
                community-based services to individuals under this 
                paragraph in the same manner and subject to the same 
                requirements as apply under the other paragraphs of 
                this subsection to the provision of home and community-
                based services to individuals who satisfy the needs-
                based criteria established under paragraph (1)(A).
                    ``(C) Authority to offer different type, amount, 
                duration, or scope of home and community-based 
                services.--A State may offer home and community-based 
                services to individuals under this paragraph that 
                differ in type, amount, duration, or scope from the 
                home and community-based services offered for 
                individuals who satisfy the needs-based criteria 
                established under paragraph (1)(A), so long as such 
                services are within the scope of services described in 
                paragraph (4)(B) of subsection (c) for which the 
                Secretary has the authority to approve a waiver and do 
                not include room or board.
            ``(7) State option to offer home and community-based 
        services to specific, targeted populations.--
                    ``(A) In general.--A State may elect in a State 
                plan amendment under this subsection to target the 
                provision of home and community-based services under 
                this subsection to specific populations and to differ 
                the type, amount, duration, or scope of such services 
                to such specific populations.
                    ``(B) 5-year term.--
                            ``(i) In general.--An election by a State 
                        under this paragraph shall be for a period of 5 
                        years.
                            ``(ii) Phase-in of services and eligibility 
                        permitted during initial 5-year period.--A 
                        State making an election under this paragraph 
                        may, during the first 5-year period for which 
                        the election is made, phase-in the enrollment 
                        of eligible individuals, or the provision of 
                        services to such individuals, or both, so long 
                        as all eligible individuals in the State for 
                        such services are enrolled, and all such 
                        services are provided, before the end of the 
                        initial 5-year period.
                    ``(C) Renewal.--An election by a State under this 
                paragraph may be renewed for additional 5-year terms if 
                the Secretary determines, prior to beginning of each 
                such renewal period, that the State has--
                            ``(i) adhered to the requirements of this 
                        subsection and paragraph in providing services 
                        under such an election; and
                            ``(ii) met the State's objectives with 
                        respect to quality improvement and beneficiary 
                        outcomes.''.
    (c) Removal of Limitation on Scope of Services.--Paragraph (1) of 
section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as 
amended by subsection (a), is amended by striking ``or such other 
services requested by the State as the Secretary may approve''.
    (d) Optional Eligibility Category To Provide Full Medicaid Benefits 
to Individuals Receiving Home and Community-based Services Under a 
State Plan Amendment.--
            (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by 
        section 1639(a)(1), is amended--
                    (A) in subclause (XX), by striking ``or'' at the 
                end;
                    (B) in subclause (XXI), by adding ``or'' at the 
                end; and
                    (C) by inserting after subclause (XXI), the 
                following new subclause:
                                    ``(XXII) who are eligible for home 
                                and community-based services under 
                                needs-based criteria established under 
                                paragraph (1)(A) of section 1915(i), or 
                                who are eligible for home and 
                                community-based services under 
                                paragraph (6) of such section, and who 
                                will receive home and community-based 
                                services pursuant to a State plan 
                                amendment under such subsection;''.
            (2) Conforming amendments.--
                    (A) Section 1903(f)(4) of the Social Security Act 
                (42 U.S.C. 1396b(f)(4)), as amended by section 
                1639(a)(4)(B), is amended in the matter preceding 
                subparagraph (A), by inserting 
                ``1902(a)(10)(A)(ii)(XXII),'' after 
                ``1902(a)(10)(A)(ii)(XXI),''.
                    (B) Section 1905(a) of the Social Security Act (42 
                U.S.C. 1396d(a)) , as so amended, is amended in the 
                matter preceding paragraph (1)--
                            (i) in clause (xv), by striking ``or'' at 
                        the end;
                            (ii) in clause (xvi), by adding ``or'' at 
                        the end; and
                            (iii) by inserting after clause (xvi) the 
                        following new clause:
            ``(xvii) individuals who are eligible for home and 
        community-based services under needs-based criteria established 
        under paragraph (1)(A) of section 1915(i), or who are eligible 
        for home and community-based services under paragraph (6) of 
        such section, and who will receive home and community-based 
        services pursuant to a State plan amendment under such 
        subsection,''.
    (e) Elimination of Option To Limit Number of Eligible Individuals 
or Length of Period for Grandfathered Individuals if Eligibility 
Criteria Is Modified.--Paragraph (1) of section 1915(i) of such Act (42 
U.S.C. 1396n(i)) is amended--
            (1) by striking subparagraph (C) and inserting the 
        following:
                    ``(C) Projection of number of individuals to be 
                provided home and community-based services.--The State 
                submits to the Secretary, in such form and manner, and 
                upon such frequency as the Secretary shall specify, the 
                projected number of individuals to be provided home and 
                community-based services.''; and
            (2) in subclause (II) of subparagraph (D)(ii), by striking 
        ``to be eligible for such services for a period of at least 12 
        months beginning on the date the individual first received 
        medical assistance for such services'' and inserting ``to 
        continue to be eligible for such services after the effective 
        date of the modification and until such time as the individual 
        no longer meets the standard for receipt of such services under 
        such pre-modified criteria''.
    (f) Elimination of Option To Waive Statewideness; Addition of 
Option To Waive Comparability.--Paragraph (3) of section 1915(i) of 
such Act (42 U.S.C. 1396n(3)) is amended by striking ``1902(a)(1) 
(relating to statewideness)'' and inserting ``1902(a)(10)(B) (relating 
to comparability)''.
    (g) Effective Date.--The amendments made by subsections (b) through 
(f) take effect on the first day of the first fiscal year quarter that 
begins after the date of enactment of this Act.

SEC. 1637. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

    (a) Extension of Demonstration.--
            (1) In general.--Section 6071(h) of the Deficit Reduction 
        Act of 2005 (42 U.S.C. 1396a note) is amended--
                    (A) in paragraph (1)(E), by striking ``fiscal year 
                2011'' and inserting ``each of fiscal years 2011 
                through 2016''; and
                    (B) in paragraph (2), by striking ``2011'' and 
                inserting ``2016''.
            (2) Evaluation.--Paragraphs (2) and (3) of section 6071(g) 
        of such Act is amended are each amended by striking ``2011'' 
        and inserting ``2016''.
    (b) Reduction of Institutional Residency Period.--
            (1) In general.--Section 6071(b)(2) of the Deficit 
        Reduction Act of 2005 (42 U.S.C. 1396a note) is amended--
                    (A) in subparagraph (A)(i), by striking ``, for a 
                period of not less than 6 months or for such longer 
                minimum period, not to exceed 2 years, as may be 
                specified by the State'' and inserting ``for a period 
                of not less than 90 consecutive days''; and
                    (B) by adding at the end the following:
        ``Any days that an individual resides in an institution on the 
        basis of having been admitted solely for purposes of receiving 
        short-term rehabilitative services for a period for which 
        payment for such services is limited under title XVIII shall 
        not be taken into account for purposes of determining the 90-
        day period required under subparagraph (A)(i).''.
            (2) Effective date.--The amendments made by this subsection 
        take effect 30 days after the date of enactment of this Act.

SEC. 1638. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE.

    Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is 
amended by inserting ``or the care and services themselves, or both'' 
before ``(if provided in or after''.

SEC. 1639. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

    (a) Coverage as Optional Categorically Needy Group.--
            (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by 
        section 1601(e), is amended--
                    (A) in subclause (XIX), by striking ``or'' at the 
                end;
                    (B) in subclause (XX), by adding ``or'' at the end; 
                and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(XXI) who are described in 
                                subsection (ii) (relating to 
                                individuals who meet certain income 
                                standards);''.
            (2) Group described.--Section 1902 of such Act (42 U.S.C. 
        1396a), as amended by section 1601(d), is amended by adding at 
        the end the following new subsection:
    ``(ii)(1) Individuals described in this subsection are 
individuals--
                    ``(A) whose income does not exceed an income 
                eligibility level established by the State that does 
                not exceed the highest income eligibility level 
                established under the State plan under this title (or 
                under its State child health plan under title XXI) for 
                pregnant women; and
                    ``(B) who are not pregnant.
            ``(2) At the option of a State, individuals described in 
        this subsection may include individuals who, had individuals 
        applied on or before January 1, 2007, would have been made 
        eligible pursuant to the standards and processes imposed by 
        that State for benefits described in clause (XV) of the matter 
        following subparagraph (G) of section subsection (a)(10) 
        pursuant to a waiver granted under section 1115.
            ``(3) At the option of a State, for purposes of subsection 
        (a)(17)(B), in determining eligibility for services under this 
        subsection, the State may consider only the income of the 
        applicant or recipient.''.
            (3) Limitation on benefits.--Section 1902(a)(10) of the 
        Social Security Act (42 U.S.C. 1396a(a)(10)), as amended by 
        section 1601(a)(5)(A), is amended in the matter following 
        subparagraph (G)--
                    (A) by striking ``and (XV)'' and inserting 
                ``(XV)''; and
                    (B) by inserting ``, and (XVI) the medical 
                assistance made available to an individual described in 
                subsection (ii) shall be limited to family planning 
                services and supplies described in section 
                1905(a)(4)(C) including medical diagnosis and treatment 
                services that are provided pursuant to a family 
                planning service in a family planning setting'' before 
                the semicolon.
            (4) Conforming amendments.--
                    (A) Section 1905(a) of the Social Security Act (42 
                U.S.C. 1396d(a)), as amended by section 1601(e)(2)(A), 
                is amended in the matter preceding paragraph (1)--
                            (i) in clause (xiv), by striking ``or'' at 
                        the end;
                            (ii) in clause (xv), by adding ``or'' at 
                        the end; and
                            (iii) by inserting after clause (xv) the 
                        following:
                            ``(xvi) individuals described in section 
                        1902(ii),''.
                    (B) Section 1903(f)(4) of such Act (42 U.S.C. 
                1396b(f)(4)), as amended by section 1601(e)(2)(B), is 
                amended by inserting ``1902(a)(10)(A)(ii)(XXI),'' after 
                ``1902(a)(10)(A)(ii)(XX),''.
    (b) Presumptive Eligibility.--
            (1) In general.--Title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.) is amended by inserting after section 
        1920B the following:

         ``presumptive eligibility for family planning services

    ``Sec. 1920C.  (a) State Option.--State plan approved under section 
1902 may provide for making medical assistance available to an 
individual described in section 1902(ii) (relating to individuals who 
meet certain income eligibility standard) during a presumptive 
eligibility period. In the case of an individual described in section 
1902(ii), such medical assistance shall be limited to family planning 
services and supplies described in 1905(a)(4)(C) and, at the State's 
option, medical diagnosis and treatment services that are provided in 
conjunction with a family planning service in a family planning 
setting.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Presumptive eligibility period.--The term 
        `presumptive eligibility period' means, with respect to an 
        individual described in subsection (a), the period that--
                    ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the individual is described in 
                section 1902(ii); and
                    ``(B) ends with (and includes) the earlier of--
                            ``(i) the day on which a determination is 
                        made with respect to the eligibility of such 
                        individual for services under the State plan; 
                        or
                            ``(ii) in the case of such an individual 
                        who does not file an application by the last 
                        day of the month following the month during 
                        which the entity makes the determination 
                        referred to in subparagraph (A), such last day.
            ``(2) Qualified entity.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `qualified entity' means any entity that--
                            ``(i) is eligible for payments under a 
                        State plan approved under this title; and
                            ``(ii) is determined by the State agency to 
                        be capable of making determinations of the type 
                        described in paragraph (1)(A).
                    ``(B) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a State from 
                limiting the classes of entities that may become 
                qualified entities in order to prevent fraud and abuse.
    ``(c) Administration.--
            ``(1) In general.--The State agency shall provide qualified 
        entities with--
                    ``(A) such forms as are necessary for an 
                application to be made by an individual described in 
                subsection (a) for medical assistance under the State 
                plan; and
                    ``(B) information on how to assist such individuals 
                in completing and filing such forms.
            ``(2) Notification requirements.--A qualified entity that 
        determines under subsection (b)(1)(A) that an individual 
        described in subsection (a) is presumptively eligible for 
        medical assistance under a State plan shall--
                    ``(A) notify the State agency of the determination 
                within 5 working days after the date on which 
                determination is made; and
                    ``(B) inform such individual at the time the 
                determination is made that an application for medical 
                assistance is required to be made by not later than the 
                last day of the month following the month during which 
                the determination is made.
            ``(3) Application for medical assistance.--In the case of 
        an individual described in subsection (a) who is determined by 
        a qualified entity to be presumptively eligible for medical 
        assistance under a State plan, the individual shall apply for 
        medical assistance by not later than the last day of the month 
        following the month during which the determination is made.
    ``(d) Payment.--Notwithstanding any other provision of law, medical 
assistance that--
            ``(1) is furnished to an individual described in subsection 
        (a)--
                    ``(A) during a presumptive eligibility period; and
                    ``(B) by a entity that is eligible for payments 
                under the State plan; and
            ``(2) is included in the care and services covered by the 
        State plan,
shall be treated as medical assistance provided by such plan for 
purposes of clause (4) of the first sentence of section 1905(b).''.
            (2) Conforming amendments.--
                    (A) Section 1902(a)(47) of the Social Security Act 
                (42 U.S.C. 1396a(a)(47)), as amended by section 
                1622(a), is amended--
                            (i) in subparagraph (A), by inserting 
                        before the semicolon at the end the following: 
                        ``and provide for making medical assistance 
                        available to individuals described in 
                        subsection (a) of section 1920C during a 
                        presumptive eligibility period in accordance 
                        with such section''; and
                            (ii) in subparagraph (B), by striking ``or 
                        1920B'' and inserting ``1920B, or 1920C''.
                    (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
                1396b(u)(1)(D)(v)), as amended by section 1622(b), is 
                amended by inserting ``or for medical assistance 
                provided to an individual described in subsection (a) 
                of section 1920C during a presumptive eligibility 
                period under such section,'' after ``1920B during a 
                presumptive eligibility period under such section,''.
    (c) Clarification of Coverage of Family Planning Services and 
Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
7(b)), as amended by section 1601(c), is amended by adding at the end 
the following:
            ``(7) Coverage of family planning services and supplies.--
        Notwithstanding the previous provisions of this section, a 
        State may not provide for medical assistance through enrollment 
        of an individual with benchmark coverage or benchmark-
        equivalent coverage under this section unless such coverage 
        includes for any individual described in section 1905(a)(4)(C), 
        medical assistance for family planning services and supplies in 
        accordance with such section.''.
    (d) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and shall apply to 
items and services furnished on or after such date.

SEC. 1640. GRANTS FOR SCHOOL-BASED HEALTH CENTERS.

    Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.), as 
amended by section 1621, is amended by adding at the end the following:

``SEC. 1944. GRANTS FOR SCHOOL-BASED HEALTH CENTERS.

    ``(a) Program.--The Secretary shall establish a program to award 
grants to eligible entities to support the operation of school-based 
health centers (as defined in section 2110(c)(9)).
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall--
            ``(1) be a school-based health center or a sponsoring 
        facility (as defined in section 2110(c)(9)(B)) of a school-
        based health center; and
            ``(2) submit an application at such time, in such manner, 
        and containing such information as the Secretary may require, 
        including at a minimum an assurance that funds awarded under 
        the grant shall not be used to provide any service that is not 
        authorized or allowed by Federal, State, or local law.
    ``(c) Preference.--In awarding grants under this section, the 
Secretary shall give preference to awarded grants for school-based 
health centers that serve a large population of children eligible for 
medical assistance under the State plan under this title or under a 
waiver of the plan or children eligible for child health assistance 
under the State child health plan under title XXI.
    ``(d) Appropriations.--Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated for each of fiscal years 
2010 and 2011, $100,000,000 for the purpose of carrying out this 
section. Funds appropriated under this subsection shall remain 
available until expended.''.

SEC. 1641. THERAPEUTIC FOSTER CARE.

    Section 1905 of the Social Security Act (42 U.S.C. 1396d), as 
amended by sections 1601(a)(3) and 1636, is amended by adding at the 
end the following:
    ``(aa)(1) Nothing in subsection (a) shall be construed as limiting 
a State from providing medical assistance for therapeutic foster care 
for children in foster care under the responsibility of the State in 
out-of-home placements.
    ``(2) The term `therapeutic foster care' means a foster care 
program that provides--
            ``(A) to a child in foster care under the responsibility of 
        the State--
                    ``(i) structured daily activities that develop, 
                improve, monitor, and reinforce age-appropriate social, 
                communications, and behavioral skills;
                    ``(ii) crisis intervention and crisis support 
                services;
                    ``(iii) medication monitoring;
                    ``(iv) counseling; and
                    ``(v) case management services; and
            ``(B) specialized training for the foster parent and 
        consultation with the foster parent on the management of 
        children with mental illnesses and related health and 
        developmental conditions.''.

SEC. 1642. SENSE OF THE SENATE REGARDING LONG-TERM CARE.

    (a) Findings.--The Senate makes the following findings:
            (1) Nearly 2 decades have passed since Congress seriously 
        considered long-term care reform. The United States Bipartisan 
        Commission on Comprehensive Health Care, also know as the 
        ``Pepper Commission'', released its ``Call for Action'' 
        blueprint for health reform in September 1990. In the 20 years 
        since those recommendations were made, Congress has never acted 
        on the report.
            (2) In 1999, under the United States Supreme Court's 
        decision in Olmstead v. L.C., 527 U.S. 581 (1999), individuals 
        with disabilities have the right to choose to receive their 
        long-term services and supports in the community, rather than 
        in an institutional setting.
            (3) Despite the Pepper Commission and Olmstead decision, 
        the long-term care provided to our Nation`s elderly and 
        disabled has not improved. In fact, for many, it has gotten far 
        worse.
            (4) In 2007, 69 percent of Medicaid long-term care spending 
        for elderly individuals and adults with physical disabilities 
        paid for institutional services. Only 6 states spent 50 percent 
        or more of their Medicaid long-term care dollars on home and 
        community-based services for elderly individuals and adults 
        with physical disabilities while \1/2\ of the States spent less 
        than 25 percent. This disparity continues even though, on 
        average, it is estimated that Medicaid dollars can support 
        nearly 3 elderly individuals and adults with physical 
        disabilities in home and community-based services for every 
        individual in a nursing home. Although every State has chosen 
        to provide certain services under home and community-based 
        waivers, these services are unevenly available within and 
        across States, and reach a small percentage of eligible 
        individuals.
    (b) Sense of the Senate.--It is the sense of the Senate that--
            (1) during the 111th session of Congress, Congress should 
        address long-term services and supports in a comprehensive way 
        that guarantees elderly and disabled individuals the care they 
        need; and
            (2) long term services and supports should be made 
        available in the community in addition to in institutions.

              PART V--MEDICAID PRESCRIPTION DRUG COVERAGE

SEC. 1651. PRESCRIPTION DRUG REBATES.

    (a) Increase in Minimum Rebate Percentage for Single Source Drugs 
and Innovator Multiple Source Drugs.--Section 1927(c)(1)(B) of the 
Social Security Act (42 U.S.C. 1396r-8(c)(1)(B)) is amended--
            (1) in clause (i)--
                    (A) in subclause (IV), by striking ``and'' at the 
                end;
                    (B) in subclause (V)--
                            (i) by inserting ``and before January 1, 
                        2010'' after ``December 31, 1995,''; and
                            (ii) by striking the period at the end and 
                        inserting ``; and''; and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VI) except as provided in clause 
                                (iii), after December 31, 2009, 23.1 
                                percent.''; and
            (2) by adding at the end the following new clause:
                            ``(iii) Minimum rebate percentage for 
                        certain drugs.--
                                    ``(I) In general.--In the case of a 
                                single source drug or an innovator 
                                multiple source drug described in 
                                subclause (II), the minimum rebate 
                                percentage for rebate periods specified 
                                in clause (i)(VI) is 17.1 percent.
                                    ``(II) Drug described.--For 
                                purposes of subclause (I), a single 
                                source drug or an innovator multiple 
                                source drug described in this subclause 
                                is any of the following drugs:
                                            ``(aa) A clotting factor 
                                        for which a separate furnishing 
                                        payment is made under section 
                                        1842(o)(5) and which is 
                                        included on a list of such 
                                        factors specified and updated 
                                        regularly by the Secretary.
                                            ``(bb) A drug approved by 
                                        the Food and Drug 
                                        Administration exclusively for 
                                        pediatric indications.''.
    (b) Increase in Rebate for Other Drugs.--Section 1927(c)(3)(B) of 
such Act (42 U.S.C. 1396r-8(c)(3)(B)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by inserting ``and before January 1, 2010,'' 
                after ``December 31, 1993,''; and
                    (B) by striking the period and inserting ``; and''; 
                and
            (3) by adding at the end the following new clause:
                            ``(iii) after December 31, 2009, is 13 
                        percent.''.
    (c) Extension of Prescription Drug Discounts to Enrollees of 
Medicaid Managed Care Organizations.--
            (1) In general.--Section 1903(m)(2)(A) of such Act (42 
        U.S.C. 1396b(m)(2)(A)) is amended--
                    (A) in clause (xi), by striking ``and'' at the end;
                    (B) in clause (xii), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
                            ``(xiii) such contract provides that (I) 
                        covered outpatient drugs dispensed to 
                        individuals eligible for medical assistance who 
                        are enrolled with the entity shall be subject 
                        to the same rebate required by the agreement 
                        entered into under section 1927 as the State is 
                        subject to and that the State shall collect 
                        such rebates from manufacturers, (II) 
                        capitation rates paid to the entity shall be 
                        based on actual cost experience related to 
                        rebates and subject to the Federal regulations 
                        requiring actuarially sound rates, and (III) 
                        the entity shall report to the State, on such 
                        timely and periodic basis as specified by the 
                        Secretary, information on the total number of 
                        units of each dosage form and strength and 
                        package size by National Drug Code of each 
                        covered outpatient drug dispensed to 
                        individuals eligible for medical assistance who 
                        are enrolled with the entity and for which the 
                        entity is responsible for coverage of such drug 
                        under this subsection.''.
            (2) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-
        8) is amended--
                    (A) in subsection (d)(4), by inserting after 
                subparagraph (E) the following:
                    ``(F) Notwithstanding the preceding subparagraphs 
                of this paragraph, any formulary established by 
                medicaid managed care organization with a contract 
                under section 1903(m) may be based on positive 
                inclusion of drugs selected by a formulary committee 
                consisting of physicians, pharmacists, and other 
                individuals with appropriate clinical experience as 
                long as drugs excluded from the formulary are available 
                through prior authorization, as described in paragraph 
                (5).''; and
                    (B) in subsection (j), by striking paragraph (1) 
                and inserting the following:
            ``(1) Covered outpatient drugs are not subject to the 
        requirements of this section if such drugs are--
                    ``(A) dispensed by health maintenance 
                organizations, including Medicaid managed care 
                organizations that contract under section 1903(m); and
                    ``(B) subject to discounts under section 340B of 
                the Public Health Service Act.''.
    (d) Additional Rebate for New Formulations of Existing Drugs.--
            (1) In general.--Section 1927(c)(2) of the Social Security 
        Act (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end 
        the following new subparagraph:
                    ``(C) Treatment of new formulations.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in the case of a drug that is a 
                        new formulation, such as an extended-release 
                        formulation, of a single source drug or an 
                        innovator multiple source drug, the rebate 
                        obligation with respect to the drug under this 
                        section shall be the amount computed under this 
                        section for the new formulation of the drug or, 
                        if greater, the product of--
                                    ``(I) the average manufacturer 
                                price of the new formulation of the 
                                single source drug or innovator 
                                multiple source drug;
                                    ``(II) the highest additional 
                                rebate (calculated as a percentage of 
                                average manufacturer price) under this 
                                section for any strength of the 
                                original single source drug or 
                                innovator multiple source drug; and
                                    ``(III) the total number of units 
                                of each dosage form and strength of the 
                                new formulation paid for under the 
                                State plan in the rebate period (as 
                                reported by the State).
                            ``(ii) No application to new formulations 
                        of orphan drugs.--Clause (i) shall not apply to 
                        a new formulation of a covered outpatient drug 
                        that is or has been designated under section 
                        526 of the Federal Food, Drug, and Cosmetic Act 
                        (21 U.S.C. 360bb) for a rare disease or 
                        condition, without regard to whether the period 
                        of market exclusivity for the drug under 
                        section 527 of such Act has expired or the 
                        specific indication for use of the drug.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to drugs dispensed after December 31, 2009.
    (e) Maximum Rebate Amount.--Section 1927(c)(2) of such Act (42 
U.S.C. 1396r-8(c)(2)), as amended by subsection (d), is amended by 
adding at the end the following new subparagraph:
                    ``(D) Maximum rebate amount.--In no case shall the 
                sum of the amounts applied under paragraph (1)(A)(ii) 
                and this paragraph with respect to each dosage form and 
                strength of a single source drug or an innovator 
                multiple source drug for a rebate period beginning 
                after December 31, 2009, exceed 100 percent of the 
                average manufacturer price of the drug.''.
    (f) Conforming Amendments.--
            (1) In general.--Section 340B of the Public Health Service 
        Act (42 U.S.C. 256b) is amended--
                    (A) in subsection (a)(2)(B)(i), by striking 
                ``1927(c)(4)'' and inserting ``1927(c)(3)''; and
                    (B) by striking subsection (c); and
                    (C) redesignating subsection (d) as subsection (c).
            (2) Effective date.--The amendments made by this subsection 
        take effect on January 1, 2010.

SEC. 1652. ELIMINATION OF EXCLUSION OF COVERAGE OF CERTAIN DRUGS.

    (a) In General.--Section 1927(d) of the Social Security Act (42 
U.S.C. 1397r-8(d)) is amended--
            (1) in paragraph (2)--
                    (A) by striking subparagraphs (E), (I), and (J), 
                respectively; and
                    (B) by redesignating subparagraphs (F), (G), (H), 
                and (K) as subparagraphs (E), (F), (G), and (H), 
                respectively; and
            (2) by adding at the end the following new paragraph:
            ``(7) Non-excludable drugs.--The following drugs or classes 
        of drugs, or their medical uses, shall not be excluded from 
        coverage:
                    ``(A) Agents when used to promote smoking 
                cessation.
                    ``(B) Barbiturates.
                    ``(C) Benzodiazepines.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2014.

SEC. 1653. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT.

    (a) Pharmacy Reimbursement Limits.--
            (1) In general.--Section 1927(e) of the Social Security Act 
        (42 U.S.C. 1396r-8(e)) is amended--
                    (A) in paragraph (4), by striking ``(or, effective 
                January 1, 2007, two or more)''; and
                    (B) by striking paragraph (5) and inserting the 
                following:
            ``(5) Use of amp in upper payment limits.--The Secretary 
        shall calculate the Federal upper reimbursement limit 
        established under paragraph (4) as no less than 175 percent of 
        the weighted average (determined on the basis of utilization) 
        of the most recently reported monthly average manufacturer 
        prices for pharmaceutically and therapeutically equivalent 
        multiple source drug products that are available for purchase 
        by retail community pharmacies on a nationwide basis. The 
        Secretary shall implement a smoothing process for average 
        manufacturer prices. Such process shall be similar to the 
        smoothing process used in determining the average sales price 
        of a drug or biological under section 1847A.''.
            (2) Definition of amp.--Section 1927(k)(1) of such Act (42 
        U.S.C. 1396r-8(k)(1)) is amended--
                    (A) in subparagraph (A), by striking ``by'' and all 
                that follows through the period and inserting ``by--
                            ``(i) wholesalers for drugs distributed to 
                        retail community pharmacies; and
                            ``(ii) retail community pharmacies that 
                        purchase drugs directly from the 
                        manufacturer.''; and
                    (B) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) Exclusion of customary prompt pay discounts 
                and other payments.--
                            ``(i) In general.--The average manufacturer 
                        price for a covered outpatient drug shall 
                        exclude--
                                    ``(I) customary prompt pay 
                                discounts extended to wholesalers;
                                    ``(II) bona fide service fees paid 
                                by manufacturers to wholesalers or 
                                retail community pharmacies, including 
                                (but not limited to) distribution 
                                service fees, inventory management 
                                fees, product stocking allowances, and 
                                fees associated with administrative 
                                services agreements and patient care 
                                programs (such as medication compliance 
                                programs and patient education 
                                programs);
                                    ``(III) reimbursement by 
                                manufacturers for recalled, damaged, 
                                expired, or otherwise unsalable 
                                returned goods, including (but not 
                                limited to) reimbursement for the cost 
                                of the goods and any reimbursement of 
                                costs associated with return goods 
                                handling and processing, reverse 
                                logistics, and drug destruction; and
                                    ``(IV) payments received from, and 
                                rebates or discounts provided to, 
                                pharmacy benefit managers, managed care 
                                organizations, health maintenance 
                                organizations, insurers, hospitals, 
                                clinics, mail order pharmacies, long 
                                term care providers, manufacturers, or 
                                any other entity that does not conduct 
                                business as a wholesaler or a retail 
                                community pharmacy.
                            ``(ii) Inclusion of other discounts and 
                        payments.--Notwithstanding clause (i), any 
                        other discounts, rebates, payments, or other 
                        financial transactions that are received by, 
                        paid by, or passed through to, retail community 
                        pharmacies shall be included in the average 
                        manufacturer price for a covered outpatient 
                        drug.''; and
                    (C) in subparagraph (C), by striking ``the retail 
                pharmacy class of trade'' and inserting ``retail 
                community pharmacies''.
            (3) Definition of multiple source drug.--Section 1927(k)(7) 
        of such Act (42 U.S.C. 1396r-8(k)(7)) is amended--
                    (A) in subparagraph (A)(i)(III), by striking ``the 
                State'' and inserting ``the United States''; and
                    (B) in subparagraph (C)--
                            (i) in clause (i), by inserting ``and'' 
                        after the semicolon;
                            (ii) in clause (ii), by striking ``; and'' 
                        and inserting a period; and
                            (iii) by striking clause (iii).
            (4) Definitions of retail community pharmacy; wholesaler.--
        Section 1927(k) of such Act (42 U.S.C. 1396r-8(k)) is amended 
        by adding at the end the following new paragraphs:
            ``(10) Retail community pharmacy.--The term `retail 
        community pharmacy' means an independent pharmacy, a chain 
        pharmacy, a supermarket pharmacy, or a mass merchandiser 
        pharmacy that is licensed as a pharmacy by the State and that 
        dispenses medications to the general public at retail prices. 
        Such term does not include a pharmacy that dispenses 
        prescription medications to patients primarily through the 
        mail, nursing home pharmacies, long-term care facility 
        pharmacies, hospital pharmacies, clinics, charitable or not-
        for-profit pharmacies, government pharmacies, or pharmacy 
        benefit managers.
            ``(11) Wholesaler.--The term `wholesaler' means a drug 
        wholesaler that is engaged in wholesale distribution of 
        prescription drugs to retail community pharmacies, including 
        (but not limited to) manufacturers, repackers, distributors, 
        own-label distributors, private-label distributors, jobbers, 
        brokers, warehouses (including manufacturer's and distributor's 
        warehouses, chain drug warehouses, and wholesale drug 
        warehouses) independent wholesale drug traders, and retail 
        community pharmacies that conduct wholesale distributions.''.
    (b) Disclosure of Price Information to the Public.--Section 
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i), in the matter preceding 
                subclause (I), by inserting ``month of a'' after 
                ``each''; and
                    (B) in the second sentence, by inserting 
                ``(relating to the weighted average of the most 
                recently reported monthly average manufacturer 
                prices)'' after ``(D)(v)''; and
            (2) in subparagraph (D)(v), by striking ``average 
        manufacturer prices'' and inserting ``the weighted average of 
        the most recently reported monthly average manufacturer prices 
        and the average retail survey price determined for each 
        multiple source drug in accordance with subsection (f)''.
    (c) Clarification of Application of Survey of Retail Prices.--
Section 1927(f)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended--
            (1) in subparagraph (A)(i), by inserting ``with respect to 
        a retail community pharmacy,'' before ``the determination''; 
        and
            (2) in subparagraph (C)(ii), by striking ``retail 
        pharmacies'' and inserting ``retail community pharmacies''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the first day of the first calendar year quarter that begins 
at least 180 days after the date of enactment of this Act, without 
regard to whether or not final regulations to carry out such amendments 
have been promulgated by such date.

SEC. 1654. STUDY OF BARRIERS TO APPROPRIATE UTILIZATION OF GENERIC 
              MEDICINE IN FEDERAL HEALTH CARE PROGRAMS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of State laws that have a negative impact on generic 
drug utilization in Federal health care programs (as defined in section 
1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f))) due to 
restrictions such as (but not limited to) limits on pharmacists' 
ability to provide a generic drug substitute for a prescribed name 
brand drug and carve-outs of certain classes of drugs from generic 
substitution.
    (b) Report.--Not later than April 1, 2012, the Comptroller General 
of the United States shall submit a report to Congress on the results 
of the study conducted under subsection (a).

    PART VI--MEDICAID DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS

SEC. 1655. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

    (a) In General.--Section 1923(f) of the Social Security Act (42 
U.S.C. 1396r-4(f)) is amended--
            (1) in paragraph (1), by striking ``and (3)'' and inserting 
        ``, (3), and (7)'';
            (2) in paragraph (3)(A), by striking ``paragraph (6)'' and 
        inserting ``paragraphs (6) and (7)'';
            (3) by redesignating paragraph (7) as paragraph (8); and
            (4) by inserting after paragraph (6) the following new 
        paragraph:
            ``(7) Reduction of state dsh allotments once reduction in 
        uninsured threshold reached.--
                    ``(A) In general.--Subject to subparagraph (E), the 
                DSH allotment for a State for fiscal years beginning 
                with the fiscal year described in subparagraph (C) 
                (with respect to the State), is equal to the DSH 
                allotment that would be determined under this 
                subsection for the State for the fiscal year without 
                application of this paragraph (but after the 
                application of subparagraph (D)), reduced by the 
                applicable percentage determined for the State for the 
                fiscal year under subparagraph (B).
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage for a State 
                for a fiscal year is the following:
                            ``(i) Uninsured reduction threshold fiscal 
                        year.--In the case of the first fiscal year 
                        described in subparagraph (C) with respect to 
                        the State--
                                    ``(I) if the State is a low DSH 
                                State described in paragraph (5)(B), 
                                the applicable percentage is equal to 
                                25 percent; and
                                    ``(II) if the State is any other 
                                State, the applicable percentage is 50 
                                percent.
                            ``(ii) Subsequent fiscal years in which the 
                        percentage of uninsured decreases.--In the case 
                        of any fiscal year after the first fiscal year 
                        described in subparagraph (C) with respect to a 
                        State, if the Secretary determines on the basis 
                        of the most recent American Community Survey of 
                        the Bureau of the Census, that the percentage 
                        of uncovered individuals residing in the State 
                        is less than the percentage of such individuals 
                        determined for the State for the preceding 
                        fiscal year--
                                    ``(I) if the State is a low DSH 
                                State described in paragraph (5)(B), 
                                the applicable percentage is equal to 
                                the product of the amount by which the 
                                percentage of uncovered individuals for 
                                the fiscal year is less than the 
                                percentage of such individuals for the 
                                preceding fiscal year and 17.5 percent; 
                                and
                                    ``(II) if the State is any other 
                                State, the applicable percentage is 
                                equal to the product of the amount by 
                                which the percentage of uncovered 
                                individuals for the fiscal year is less 
                                than the percentage of such individuals 
                                for the preceding fiscal year and 35 
                                percent.
                    ``(C) Fiscal year described.--For purposes of 
                subparagraph (A), the fiscal year described in this 
                subparagraph with respect to a State is the first 
                fiscal year that occurs after fiscal year 2012 for 
                which the Secretary determines, on the basis of the 
                most recent American Community Survey of the Bureau of 
                the Census, that the percentage of uncovered 
                individuals residing in the State is at least 50 
                percent less than the percentage of such individuals 
                determined for the State for fiscal year 2009.
                    ``(D) Exclusion of portions diverted for coverage 
                expansions.--For purposes of applying the applicable 
                percentage reduction under subparagraph (A) to the DSH 
                allotment for a State for a fiscal year, the DSH 
                allotment for a State that would be determined under 
                this subsection for the State for the fiscal year 
                without the application of this paragraph (and prior to 
                any such reduction) shall not include any portion of 
                the allotment for which the Secretary has approved the 
                State's diversion to the costs of providing medical 
                assistance or other health benefits coverage under a 
                waiver that is in effect on July 2009.
                    ``(E) Minimum allotment.--In no event shall the DSH 
                allotment determined for a State in accordance with 
                this paragraph for fiscal year 2013 or any succeeding 
                fiscal year be less than the amount equal to 35 percent 
                of the DSH allotment determined for the State for 
                fiscal year 2012 under this subsection (and after the 
                application of this paragraph, if applicable), 
                increased by the percentage change in the consumer 
                price index for all urban consumers (all items, U.S. 
                city average) for each previous fiscal year occurring 
                before the fiscal year.
                    ``(F) Uncovered individuals.--In this paragraph, 
                the term `uncovered individuals' means individuals with 
                no health insurance (as defined in section 2791 of the 
                Public Health Service Act) at any time during a 
                year.''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2011.

                        PART VII--DUAL ELIGIBLES

SEC. 1661. 5-YEAR PERIOD FOR DEMONSTRATION PROJECTS.

    (a) In General.--Section 1915(h) of the Social Security Act (42 
U.S.C. 1396n(h)) is amended--
            (1) by inserting ``(1)'' after ``(h)'';
            (2) by inserting ``, or a waiver described in paragraph 
        (2)'' after ``(e)''; and
            (3) by adding at the end the following new paragraph:
    ``(2)(A) Notwithstanding subsections (c)(3) and (d) (3), any waiver 
under subsection (b), (c), or (d), or a waiver under section 1115, that 
provides medical assistance for dual eligible individuals (including 
any such waivers under which non dual eligible individuals may be 
enrolled in addition to dual eligible individuals) may be conducted for 
a period of 5 years and, upon the request of the State, may be extended 
for additional 5-year periods unless the Secretary determines that for 
the previous waiver period the conditions for the waiver have not been 
met or it would no longer be cost-effective and efficient, or 
consistent with the purposes of this title, to extend the waiver.
    ``(B) In this paragraph, the term `dual eligible individual' means 
an individual who is entitled to, or enrolled for, benefits under part 
A of title XVIII, or enrolled for benefits under part B of title XVIII, 
and is eligible for medical assistance under the State plan under this 
title or under a waiver of such plan.''.
    (b) Conforming Amendments.--
            (1) Section 1915 of such Act (42 U.S.C. 1396n) is amended--
                    (A) in subsection (b), by adding at the end the 
                following new sentence: ``Subsection (h)(2) shall apply 
                to a waiver under this subsection.'';
                    (B) in subsection (c)(3), in the second sentence, 
                by inserting ``(other than a waiver described in 
                subsection (h)(2))'' after ``A waiver under this 
                subsection'';
                    (C) in subsection (d)(3), in the second sentence, 
                by inserting ``(other than a waiver described in 
                subsection (h)(2))'' after ``A waiver under this 
                subsection''.
            (2) Section 1115 of such Act (42 U.S.C. 1315) is amended--
                    (A) in subsection (e)(2), by inserting ``(5 years, 
                in the case of a waiver described in section 
                1915(h)(2))'' after ``3 years''; and
                    (B) in subsection (f)(6), by inserting ``(5 years, 
                in the case of a waiver described in section 
                1915(h)(2))'' after ``3 years''.

SEC. 1662. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINATION FOR LOW-
              INCOME MEDICARE BENEFICIARIES.

    (a) Establishment of Federal Coordinated Health Care Office.--
            (1) In general.--Not later than March 1, 2010, the 
        Secretary of Health and Human Services (in this section 
        referred to as the ``Secretary'') shall establish a Federal 
        Coordinated Health Care Office.
            (2) Establishment and reporting to cms administrator.--The 
        Federal Coordinated Health Care Office--
                    (A) shall be established within the Centers for 
                Medicare & Medicaid Services; and
                    (B) have as the Office a Director who shall be 
                appointed by, and be in direct line of authority to, 
                the Administrator of the Centers for Medicare & 
                Medicaid Services.
    (b) Purpose.--The purpose of the Federal Coordinated Health Care 
Office is to bring together officers and employees of the Medicare and 
Medicaid programs at the Centers for Medicare & Medicaid Services in 
order to--
            (1) more effectively integrate benefits under the Medicare 
        program under title XVIII of the Social Security Act and the 
        Medicaid program under title XIX of such Act; and
            (2) improve the coordination between the Federal Government 
        and States for individuals eligible for benefits under both 
        such programs in order to ensure that such individuals get full 
        access to the items and services to which they are entitled 
        under titles XVIII and XIX of the Social Security Act.
    (c) Goals.--The goals of the Federal Coordinated Health Care Office 
are as follows:
            (1) Providing dual eligible individuals full access to the 
        benefits to which such individuals are entitled under the 
        Medicare and Medicaid programs.
            (2) Simplifying the processes for dual eligible individuals 
        to access the items and services they are entitled to under the 
        Medicare and Medicaid programs.
            (3) Improving the quality of health care and long-term 
        services for dual eligible individuals.
            (4) Increasing dual eligible individuals' understanding of 
        and satisfaction with coverage under the Medicare and Medicaid 
        programs.
            (5) Eliminating regulatory conflicts between rules under 
        the Medicare and Medicaid programs.
            (6) Improving care continuity and ensuring safe and 
        effective care transitions for dual eligible individuals.
            (7) Eliminating cost-shifting between the Medicare and 
        Medicaid program and among related health care providers.
            (8) Improving the quality of performance of providers of 
        services and suppliers under the Medicare and Medicaid 
        programs.
    (d) Specific Responsibilities.--The specific responsibilities of 
the Federal Coordinated Health Care Office are as follows:
            (1) Providing States, specialized MA plans for special 
        needs individuals (as defined in section 1859(b)(6) of the 
        Social Security Act (42 U.S.C. 1395w-28(b)(6))), physicians and 
        other relevant entities or individuals with the education and 
        tools necessary for developing programs that align benefits 
        under the Medicare and Medicaid programs for dual eligible 
        individuals.
            (2) Supporting State efforts to coordinate and align acute 
        care and long-term care services for dual eligible individuals 
        with other items and services furnished under the Medicare 
        program.
            (3) Providing support for coordination of contracting and 
        oversight by States and the Centers for Medicare & Medicaid 
        Services with respect to the integration of the Medicare and 
        Medicaid programs in a manner that is supportive of the goals 
        described in paragraph (3).
            (4) To consult and coordinate with the Medicare Payment 
        Advisory Commission established under section 1805 of the 
        Social Security Act (42 U.S.C. 1395b-6) and the Medicaid and 
        CHIP Payment and Access Commission established under section 
        1900 of such Act (42 U.S.C. 1396) with respect to policies 
        relating to the enrollment in, and provision of, benefits to 
        dual eligible individuals under the Medicare program under 
        title XVIII of the Social Security Act and the Medicaid program 
        under title XIX of such Act.
    (e) Report.--The Secretary shall, as part of the budget transmitted 
under section 1105(a) of title 31, United States Code, submit to 
Congress an annual report containing recommendations for legislation 
that would improve care coordination and benefits for dual eligible 
individuals.
    (f) Dual Eligible Defined.--In this section, the term ``dual 
eligible individual'' means an individual who is entitled to, or 
enrolled for, benefits under part A of title XVIII of the Social 
Security Act, or enrolled for benefits under part B of title XVIII of 
such Act, and is eligible for medical assistance under a State plan 
under title XIX of such Act or under a waiver of such plan.

                      PART VIII--MEDICAID QUALITY

SEC. 1671. ADULT HEALTH QUALITY MEASURES.

    Title XI of the Social Security Act (42 U.S.C. 1301 et seq.), as 
amended by section 401 of the Children's Health Insurance Program 
Reauthorization Act of 2009 (Public Law 111-3), is amended by inserting 
after section 1139A the following new section:

``SEC. 1139B. ADULT HEALTH QUALITY MEASURES.

    ``(a) Development of Core Set of Health Care Quality Measures for 
Adults Eligible for Benefits Under Medicaid.--The Secretary shall 
identify and publish a recommended core set of adult health quality 
measures for Medicaid eligible adults in the same manner as the 
Secretary identifies and publishes a core set of child health quality 
measures under section 1139A, including with respect to identifying and 
publishing existing adult health quality measures that are in use under 
public and privately sponsored health care coverage arrangements, or 
that are part of reporting systems that measure both the presence and 
duration of health insurance coverage over time, that may be applicable 
to Medicaid eligible adults.
    ``(b) Deadlines.--
            ``(1) Recommended measures.--Not later than January 1, 
        2011, the Secretary shall identify and publish for comment a 
        recommended core set of adult health quality measures for 
        Medicaid eligible adults.
            ``(2) Dissemination.--Not later than January 1, 2012, the 
        Secretary shall publish an initial core set of adult health 
        quality measures that are applicable to Medicaid eligible 
        adults.
            ``(3) Standardized reporting.--Not later than January 1, 
        2013, the Secretary, in consultation with States, shall develop 
        a standardized format for reporting information based on the 
        initial core set of adult health quality measures and create 
        procedures to encourage States to use such measures to 
        voluntarily report information regarding the quality of health 
        care for Medicaid eligible adults.
            ``(4) Reports to congress.--Not later than January 1, 2014, 
        and every 3 years thereafter, the Secretary shall include in 
        the report to Congress required under section 1139A(a)(6) 
        information similar to the information required under that 
        section with respect to the measures established under this 
        section.
            ``(5) Establishment of medicaid quality measurement 
        program.--
                    ``(A) In general.--Not later than 12 months after 
                the release of the recommended core set of adult health 
                quality measures under paragraph (1)), the Secretary 
                shall establish a Medicaid Quality Measurement Program 
                in the same manner as the Secretary establishes the 
                pediatric quality measures program under section 
                1139A(b). The aggregate amount awarded by the Secretary 
                for grants and contracts for the development, testing, 
                and validation of emerging and innovative evidence-
                based measures under such program shall equal the 
                aggregate amount awarded by the Secretary for grants 
                under section 1139A(b)(4)(A)
                    ``(B) Revising, strengthening, and improving 
                initial core measures.--Beginning not later than 24 
                months after the establishment of the Medicaid Quality 
                Measurement Program, and annually thereafter, the 
                Secretary shall publish recommended changes to the 
                initial core set of adult health quality measures that 
                shall reflect the results of the testing, validation, 
                and consensus process for the development of adult 
                health quality measures.
    ``(c) Construction.--Nothing in this section shall be construed as 
supporting the restriction of coverage, under title XIX or XXI or 
otherwise, to only those services that are evidence-based, or in anyway 
limiting available services.
    ``(d) Annual State Reports Regarding State-Specific Quality of Care 
Measures Applied Under Medicaid.--
            ``(1) Annual state reports.--Each State with a State plan 
        or waiver approved under title XIX shall annually report 
        (separately or as part of the annual report required under 
        section 1139A(c)), to the Secretary on the--
                    ``(A) State-specific adult health quality measures 
                applied by the State under the such plan, including 
                measures described in subsection (a)(5); and
                    ``(B) State-specific information on the quality of 
                health care furnished to Medicaid eligible adults under 
                such plan, including information collected through 
                external quality reviews of managed care organizations 
                under section 1932 and benchmark plans under section 
                1937.
            ``(2) Publication.--Not later than September 30, 2014, and 
        annually thereafter, the Secretary shall collect, analyze, and 
        make publicly available the information reported by States 
        under paragraph (1).
    ``(e) Appropriation.--Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated for each of fiscal years 
2010 through 2014, $60,000,000 for the purpose of carrying out this 
section. Funds appropriated under this subsection shall remain 
available until expended.''.

SEC. 1672. PAYMENT ADJUSTMENT FOR HEALTH CARE-ACQUIRED CONDITIONS.

    (a) In General.--The Secretary of Health and Human Services (in 
this subsection referred to as the ``Secretary'') shall conduct surveys 
to identify current State practices that prohibit payment for health 
care-acquired conditions and shall promulgate regulations, to be 
effective as of July 1, 2011, to prohibit payments to States under 
section 1903 of the Social Security Act for any amounts expended for 
providing medical assistance for such conditions. Such regulations 
shall ensure that a prohibition on payment for health care-acquired 
conditions shall not affect care or services provided to a Medicaid 
beneficiary.
    (b) Health Care-Acquired Condition.--In this section. the term 
``health care-acquired condition'' means a medical condition for which 
an individual was diagnosed that could be identified by a secondary 
diagnostic code described in section 1886(d)(4)(D)(iv) of the Social 
Security Act (42 U.S.C. 1395ww(d)(4)(D)(iv)).
    (c) Medicare Provisions.--In carrying out this section, the 
Secretary may elect to apply to State plans (or waivers) under title 
XIX of the Social Security Act the regulations promulgated pursuant to 
section 1886(d)(4)(D) of such Act (42 U.S.C. 1395ww(d)(4)(D)) relating 
to the prohibition of payments based on the presence of a secondary 
diagnosis code specified by the Secretary in such regulations. The 
Secretary may exclude certain conditions identified under title XVIII 
of the Social Security Act for non-payment under title XIX of such Act 
when the Secretary finds the inclusion of such conditions to be 
inapplicable to beneficiaries under title XIX.

SEC. 1673. DEMONSTRATION PROJECT TO EVALUATE INTEGRATED CARE AROUND A 
              HOSPITALIZATION.

    (a) Authority to Conduct Project.--The Secretary of Health and 
Human Services (in this section referred to as the ``Secretary'') shall 
establish a demonstration project under title XIX of the Social 
Security Act to evaluate the use of bundled payments for the provision 
of integrated care for a Medicaid beneficiary--
            (1) with respect to an episode of care that includes a 
        hospitalization; and
            (2) for concurrent physicians services provided during a 
        hospitalization.
    (b) Requirements.--The demonstration project shall be conducted in 
accordance with the following:
            (1) The demonstration project shall be conducted in up to 8 
        States, determined by the Secretary based on consideration of 
        the potential to lower costs under the Medicaid program while 
        improving care for Medicaid beneficiaries. A State selected to 
        participate in the demonstration project may target the 
        demonstration project to particular categories of 
        beneficiaries, beneficiaries with particular diagnoses, or 
        particular geographic regions of the State, but the Secretary 
        shall insure that, as a whole, the demonstration project is, to 
        the greatest extent possible, representative of the demographic 
        and geographic composition of Medicaid beneficiaries 
        nationally.
            (2) The demonstration project shall focus on conditions 
        where there is evidence of an opportunity for providers of 
        services and suppliers to improve the quality of care furnished 
        to Medicaid beneficiaries while reducing total expenditures 
        under the State Medicaid programs selected to participate, as 
        determined by the Secretary.
            (3) A State selected to participate in the demonstration 
        project shall specify the 1 or more episodes of care the State 
        proposes to address in the project, the services to be included 
        in the bundled payments, and the rationale for the selection of 
        such episodes of care and services. The Secretary may modify 
        the episodes of care as well as the services to be included in 
        the bundled payments prior to or after approving the project. 
        The Secretary may also vary such factors among the different 
        States participating in the demonstration project.
            (4) The Secretary shall ensure that payments made under the 
        demonstration project are adjusted for severity of illness and 
        other characteristics of Medicaid beneficiaries within a 
        category or having a diagnosis targeted as part of the 
        demonstration project. States shall ensure that Medicaid 
        beneficiaries are not liable for any additional cost sharing 
        than if their care had not been subject to payment under the 
        demonstration project.
            (5) Hospitals participating in the demonstration project 
        shall have or establish robust discharge planning programs to 
        ensure that Medicaid beneficiaries requiring post-acute care 
        are appropriately placed in, or have ready access to, post-
        acute care settings.
            (6) The Secretary and each State selected to participate in 
        the demonstration project shall ensure that the demonstration 
        project does not result in the Medicaid beneficiaries whose 
        care is subject to payment under the demonstration project 
        being provided with less items and services for which medical 
        assistance is provided under the State Medicaid program than 
        the items and services for which medical assistance would have 
        been provided to such beneficiaries under the State Medicaid 
        program in the absence of the demonstration project.
    (c) Waiver of Provisions.--Notwithstanding section 1115(a) of the 
Social Security Act (42 U.S.C. 1315(a)), the Secretary may waive such 
provisions of titles XIX, XVIII, and XI of that Act as may be necessary 
to accomplish the goals of the demonstration, ensure beneficiary access 
to acute and post-acute care, and maintain quality of care.
    (d) Evaluation and Report.--
            (1) Data.--Each State selected to participate in the 
        demonstration project under this section shall provide to the 
        Secretary, in such form and manner as the Secretary shall 
        specify, relevant data necessary to monitor outcomes, costs, 
        and quality, and evaluate the rationales for selection of the 
        episodes of care and services specified by States under 
        subsection (b)(3).
            (2) Report.--Not later than 1 year after the conclusion of 
        the demonstration project, the Secretary shall submit a report 
        to Congress on the results of the demonstration project.

SEC. 1674. MEDICAID GLOBAL PAYMENT SYSTEM DEMONSTRATION PROJECT.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall, in 
coordination with the Innovation Center (as established under section 
3021), establish the Medicaid Global Payment System Demonstration 
Project under which a participating State shall adjust the payments 
made to an eligible safety net hospital system or network from a fee-
for-service payment structure to a global capitated payment model.
    (b) Duration and Scope.--The demonstration project conducted under 
this section shall operate during a period of fiscal years 2010 through 
2012. The Secretary shall select not more than 5 States to participate 
in the demonstration project.
    (c) Eligible Safety Net Hospital System or Network.--For purposes 
of this section, the term ``eligible safety net hospital system or 
network'' means a large, safety net hospital system or network (as 
defined by the Secretary) that operates within a State selected by the 
Secretary under subsection (b).
    (d) Evaluation.--
            (1) Testing.--The Innovation Center shall test and evaluate 
        the demonstration project conducted under this section to 
        examine any changes in health care quality outcomes and 
        spending by the eligible safety net hospital systems or 
        networks.
            (2) Budget neutrality.--During the testing period under 
        paragraph (1), any budget neutrality requirements under section 
        1115A(b)(3) of the Social Security Act (as added by section 
        3021) shall not be applicable.
            (3) Modification.--During the testing period under 
        paragraph (1), the Secretary may, in the Secretary's 
        discretion, modify or terminate the demonstration project 
        conducted under this section.
    (e) Report.--Not later than 12 months after the date of completion 
of the demonstration project under this section, the Secretary shall 
submit to Congress a report containing the results of the evaluation 
and testing conducted under subsection (d), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 1675. PEDIATRIC ACCOUNTABLE CARE ORGANIZATION DEMONSTRATION 
              PROJECT.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall establish the 
Pediatric Accountable Care Organization Demonstration Project to 
authorize a participating State to allow pediatric medical providers 
that meet specified requirements to be recognized as an accountable 
care organization for purposes of receiving incentive payments (as 
described under subsection (d)), in the same manner as an accountable 
care organization is recognized and provided with incentive payments 
under section 1899 of the Social Security Act (as added by section 
3022).
    (b) Application.--A State that desires to participate in the 
demonstration project under this section shall submit to the Secretary 
an application at such time, in such manner, and containing such 
information as the Secretary may require.
    (c) Requirements.--
            (1) Performance guidelines.--The Secretary, in consultation 
        with the States and pediatric providers, shall establish 
        guidelines to ensure that the quality of care delivered to 
        individuals by a provider recognized as an accountable care 
        organization under this section is not less than the quality of 
        care that would have otherwise been provided to such 
        individuals.
            (2) Savings requirement.--A participating State, in 
        consultation with the Secretary, shall establish an annual 
        minimal level of savings in expenditures for items and services 
        covered under the Medicaid program under title XIX of the 
        Social Security Act and the CHIP program under title XXI of 
        such Act that must be reached by an accountable care 
        organization in order for such organization to receive an 
        incentive payment under subsection (d).
    (d) Incentive Payment.--An accountable care organization that meets 
the performance guidelines established by the Secretary under 
subsection (c)(1) and achieves savings greater than the annual minimal 
savings level established by the State under subsection (c)(2) shall 
receive an incentive payment for such year equal to a portion (as 
determined appropriate by the Secretary) of the amount of such excess 
savings. The Secretary may establish an annual cap on incentive 
payments for an accountable care organization.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 1676. MEDICAID EMERGENCY PSYCHIATRIC DEMONSTRATION PROJECT.

    (a) Authority To Conduct Demonstration Project.--The Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') shall establish a demonstration project for up to 8 
States under which an eligible State (as described in subsection (c)) 
shall provide reimbursement under the State Medicaid plan under title 
XIX of the Social Security Act to an institution for mental diseases 
(as defined in section 1905(i) of such Act) that is not publicly owned 
or operated and that is subject to the requirements of section 1867 of 
the Social Security Act (42 U.S.C. 1395dd) for the provision of medical 
assistance available under such plan to an individual who--
            (1) has attained age 21, but has not attained age 65;
            (2) is eligible for medical assistance under such plan; and
            (3) requires such medical assistance to stabilize a 
        psychiatric emergency medical condition, as evidenced by the 
        expression of suicidal or homicidal thoughts or gestures 
        determined dangerous to the individual or others.
    (b) In-stay Review.--The Secretary shall establish a mechanism for 
in-stay review to determine whether or not the patient has been 
stabilized (as defined in subsection (h)(5)). This mechanism shall 
commence before the third day of the inpatient stay. States 
participating in the demonstration project may manage the provision of 
these benefits under the project through utilization review, 
authorization, or management practices, or the application of medical 
necessity and appropriateness criteria applicable to behavioral health.
    (c) Eligible State Defined.--
            (1) Application.--Upon approval of an application submitted 
        by a State described in paragraph (2), the State shall be an 
        eligible State for purposes of conducting a demonstration 
        project under this section.
            (2) State described.--States shall be selected by the 
        Secretary in a manner so as to provide geographic diversity on 
        the basis of the application to conduct a demonstration project 
        under this section submitted by such States.
    (d) Length of Demonstration Project.--The demonstration project 
established under this section shall be conducted for a period of 3 
consecutive years.
    (e) Limitations on Federal Funding.--
            (1) Appropriation.--
                    (A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, there is appropriated to 
                carry out this section, $75,000,000 for fiscal year 
                2010.
                    (B) Budget authority.--Subparagraph (A) constitutes 
                budget authority in advance of appropriations Act and 
                represents the obligation of the Federal Government to 
                provide for the payment of the amounts appropriated 
                under that subparagraph.
            (2) 3-year availability.--Funds appropriated under 
        paragraph (1) shall remain available for obligation through 
        December 31, 2012.
            (3) Limitation on payments.--In no case may--
                    (A) the aggregate amount of payments made by the 
                Secretary to eligible States under this section exceed 
                $75,000,000; or
                    (B) payments be provided by the Secretary under 
                this section after December 31, 2012.
            (4) Funds allocated to states.--The Secretary shall 
        allocate funds to eligible States based on their applications 
        and the availability of funds.
            (5) Payments to states.--The Secretary shall pay to each 
        eligible State, from its allocation under paragraph (4), an 
        amount each quarter equal to the Federal medical assistance 
        percentage of expenditures in the quarter for medical 
        assistance described in subsection (a).
    (f) Reports.--
            (1) Annual progress reports.--The Secretary shall submit 
        annual reports to Congress on the progress of the demonstration 
        project conducted under this section.
            (2) Final report and recommendation.--An evaluation should 
        be conducted of the demonstration project's impact on the 
        functioning of the health and mental health service system and 
        on individuals enrolled in the Medicaid program. This 
        evaluation should include collection of baseline data for one-
        year prior to the initiation of the demonstration project as 
        well as collection of data from matched comparison states not 
        participating in the demonstration. The evaluation measures 
        shall include the following:
                    (A) A determination, by State, as to whether the 
                demonstration project resulted in increased access to 
                inpatient mental health services under the Medicaid 
                program and whether average length of stays were longer 
                (or shorter) for individuals admitted under the 
                demonstration project compared with individuals 
                otherwise admitted in comparison sites.
                    (B) An analysis by State, regarding whether the 
                demonstration project produced a significant reduction 
                in emergency room visits for individuals eligible for 
                assistance under the Medicaid program or in the 
                duration of emergency room lengths of stay.
                    (C) An assessment of discharge planning by 
                participating hospitals that ensures access to further 
                (non-emergency) inpatient or residential care as well 
                as continuity of care for those discharged to 
                outpatient care.
                    (D) An assessment of the impact of the 
                demonstration project on the costs of the full range of 
                mental health services (including inpatient, emergency 
                and ambulatory care) under the plan as contrasted with 
                the comparison areas.
                    (E) Data on the percentage of consumers with 
                Medicaid coverage who are admitted to inpatient 
                facilities as a result of the demonstration project as 
                compared to those admitted to these same facilities 
                through other means.
                    (F) A recommendation regarding whether the 
                demonstration project should be continued after 
                December 31, 2012, and expanded on a national basis.
    (g) Waiver Authority.--
            (1) In general.--The Secretary shall waive the limitation 
        of subdivision (B) following paragraph (28) of section 1905(a) 
        of the Social Security Act (42 U.S.C. 1396d(a)) (relating to 
        limitations on payments for care or services for individuals 
        under 65 years of age who are patients in an institution for 
        mental diseases) for purposes of carrying out the demonstration 
        project under this section.
            (2) Limited other waiver authority.--The Secretary may 
        waive other requirements of titles XI and XIX of the Social 
        Security Act (including the requirements of sections 1902(a)(1) 
        (relating to statewideness) and 1902(1)(10)(B) (relating to 
        comparability)) only to extent necessary to carry out the 
        demonstration project under this section.

   PART IX--IMPROVEMENTS TO THE MEDICAID AND CHIP PAYMENT AND ACCESS 
                          COMMISSION (MACPAC)

SEC. 1681. MACPAC ASSESSMENT OF POLICIES AFFECTING ALL MEDICAID 
              BENEFICIARIES.

    (a) In General.--Section 1900 of the Social Security Act (42 U.S.C. 
1396) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in the paragraph heading, by inserting 
                        ``for all states'' before ``and annual''; and
                            (ii) in subparagraph (A), by striking 
                        ``children's'';
                            (iii) in subparagraph (B), by inserting ``, 
                        the Secretary, and States'' after ``Congress'';
                            (iv) in subparagraph (C), by striking 
                        ``March 1'' and inserting ``March 15''; and
                            (v) in subparagraph (D), by striking ``June 
                        1'' and inserting ``June 15'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i)--
                                            (aa) by inserting ``the 
                                        efficient provision of'' after 
                                        ``expenditures for''; and
                                            (bb) by striking 
                                        ``hospital, skilled nursing 
                                        facility, physician, Federally-
                                        qualified health center, rural 
                                        health center, and other fees'' 
                                        and inserting ``payments to 
                                        medical, dental, and health 
                                        professionals, hospitals, 
                                        residential and long-term care 
                                        providers, providers of home 
                                        and community based services, 
                                        Federally-qualified health 
                                        centers and rural health 
                                        clinics, managed care entities, 
                                        and providers of other covered 
                                        items and services''; and
                                    (II) in clause (iii), by inserting 
                                ``(including how such factors and 
                                methodologies enable such beneficiaries 
                                to obtain the services for which they 
                                are eligible, affect provider supply, 
                                and affect providers that serve a 
                                disproportionate share of low-income 
                                and other vulnerable populations)'' 
                                after ``beneficiaries'';
                            (ii) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (F) and (H), respectively;
                            (iii) by inserting after subparagraph (A), 
                        the following:
                    ``(B) Eligibility policies.--Medicaid and CHIP 
                eligibility policies, including a determination of the 
                degree to which Federal and State policies provide 
                health care coverage to needy populations.
                    ``(C) Enrollment and retention processes.--Medicaid 
                and CHIP enrollment and retention processes, including 
                a determination of the degree to which Federal and 
                State policies encourage the enrollment of individuals 
                who are eligible for such programs and screen out 
                individuals who are ineligible, while minimizing the 
                share of program expenses devoted to such processes.
                    ``(D) Coverage policies.--Medicaid and CHIP benefit 
                and coverage policies, including a determination of the 
                degree to which Federal and State policies provide 
                access to the services enrollees require to improve and 
                maintain their health and functional status.
                    ``(E) Quality of care.--Medicaid and CHIP policies 
                as they relate to the quality of care provided under 
                those programs, including a determination of the degree 
                to which Federal and State policies achieve their 
                stated goals and interact with similar goals 
                established by other purchasers of health care 
                services.'';
                            (iv) by inserting after subparagraph (F) 
                        (as redesignated by clause (ii) of this 
                        subparagraph), the following:
                    ``(G) Interactions with medicare and medicaid.--
                Consistent with paragraph (11), the interaction of 
                policies under Medicaid and the Medicare program under 
                title XVIII, including with respect to how such 
                interactions affect access to services, payments, and 
                dual eligible individuals.'' and
                            (v) in subparagraph (H) (as so 
                        redesignated), by inserting ``and preventive, 
                        acute, and long-term services and supports'' 
                        after ``barriers'';
                    (C) by redesignating paragraphs (3) through (9) as 
                paragraphs (4) through (10), respectively;
                    (D) by inserting after paragraph (2), the following 
                new paragraph:
            ``(3) Recommendations and reports of state-specific data.--
        MACPAC shall--
                    ``(A) review national and State-specific Medicaid 
                and CHIP data; and
                    ``(B) submit reports and recommendations to 
                Congress, the Secretary, and States based on such 
                reviews.'';
                    (E) in paragraph (4), as redesignated by 
                subparagraph (C), by striking ``or any other problems'' 
                and all that follows through the period and inserting 
                ``, as well as other factors that adversely affect, or 
                have the potential to adversely affect, access to care 
                by, or the health care status of, Medicaid and CHIP 
                beneficiaries. MACPAC shall include in the annual 
                report required under paragraph (1)(D) a description of 
                all such areas or problems identified with respect to 
                the period addressed in the report.'';
                    (F) in paragraph (5), as so redesignated,--
                            (i) in the paragraph heading, by inserting 
                        ``and regulations'' after ``reports''; and
                            (ii) by striking ``If'' and inserting the 
                        following:
                    ``(A) Certain secretarial reports.--If''; and
                            (iii) in the second sentence, by inserting 
                        ``and the Secretary'' after ``appropriate 
                        committees of Congress''; and
                            (iv) by adding at the end the following:
                    ``(B) Regulations.--MACPAC shall review Medicaid 
                and CHIP regulations and may comment through submission 
                of a report to the appropriate committees of Congress 
                and the Secretary, on any such regulations that affect 
                access, quality, or efficiency of health care.'';
                    (G) in paragraph (10), as so redesignated, by 
                inserting ``, and shall submit with any 
                recommendations, a report on the Federal and State-
                specific budget consequences of the recommendations'' 
                before the period; and
                    (H) by adding at the end the following:
            ``(11) Consultation and coordination with medpac.--
                    ``(A) In general.--MACPAC shall regularly consult 
                with the Medicare Payment Advisory Commission (in this 
                paragraph referred to as `MedPAC') established under 
                section 1805 in carrying out its duties under this 
                section, particularly with respect to the issues 
                specified in paragraph (2) as they relate to those 
                Medicaid beneficiaries who are dually eligible for 
                Medicaid and the Medicare program under title XVIII, 
                adult Medicaid beneficiaries (who are not dually 
                eligible for Medicare), and beneficiaries under 
                Medicare. Responsibility for analysis of and 
                recommendations to change Medicare policy regarding 
                Medicare beneficiaries, including Medicare 
                beneficiaries who are dually eligible for Medicare and 
                Medicaid, shall rest with MedPAC.
                    ``(B) Information sharing.--MACPAC and MedPAC shall 
                have access to deliberations and records of the other 
                such entity, respectively, upon the request of the 
                other such entity.
            ``(12) Consultation with states.--MACPAC shall regularly 
        consult with States in carrying out its duties under this 
        section, including with respect to developing processes for 
        carrying out such duties, and shall ensure that input from 
        States is taken into account and represented in MACPAC's 
        recommendations and reports.
            ``(13) Coordinate and consult with the federal coordinated 
        health care office.--MACPAC shall coordinate and consult with 
        the Federal Coordinated Health Care Office established under 
        section 1662 of the America's Healthy Future Act of 2009 before 
        making any recommendations regarding dual eligible individuals.
            ``(14) Programmatic oversight vested in the secretary.--
        MACPAC's authority to make recommendations in accordance with 
        this section shall not affect, or be considered to duplicate, 
        the Secretary's authority to carry out Federal responsibilities 
        with respect to Medicaid and CHIP.'';
            (2) in subsection (c)(2)--
                    (A) by striking subparagraphs (A) and (B) and 
                inserting the following:
                    ``(A) In general.--The membership of MACPAC shall 
                include individuals who have had direct experience as 
                enrollees or parents or caregivers of enrollees in 
                Medicaid or CHIP and individuals with national 
                recognition for their expertise in Federal safety net 
                health programs, health finance and economics, 
                actuarial science, health plans and integrated delivery 
                systems, reimbursement for health care, health 
                information technology, and other providers of health 
                services, public health, and other related fields, who 
                provide a mix of different professions, broad 
                geographic representation, and a balance between urban 
                and rural representation.
                    ``(B) Inclusion.--The membership of MACPAC shall 
                include (but not be limited to) physicians, dentists, 
                and other health professionals, employers, third-party 
                payers, and individuals with expertise in the delivery 
                of health services. Such membership shall also include 
                representatives of children, pregnant women, the 
                elderly, individuals with disabilities, caregivers, and 
                dual eligible individuals, current or former 
                representatives of State agencies responsible for 
                administering Medicaid, and current or former 
                representatives of State agencies responsible for 
                administering CHIP.''.
            (3) in subsection (d)(2), by inserting ``and State'' after 
        ``Federal'';
            (4) in subsection (e)(1), in the first sentence, by 
        inserting ``and, as a condition for receiving payments under 
        sections 1903(a) and 2105(a), from any State agency responsible 
        for administering Medicaid or CHIP,'' after ``United States''; 
        and
            (5) in subsection (f)--
                    (A) in the subsection heading, by striking 
                ``Authorization of Appropriations'' and inserting 
                ``Funding'';
                    (B) in paragraph (1), by inserting ``(other than 
                for fiscal year 2010)'' before ``in the same manner''; 
                and
                    (C) by adding at the end the following:
            ``(3) Funding for fiscal year 2010.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, there is appropriated to 
                MACPAC to carry out the provisions of this section for 
                fiscal year 2010, $9,000,000.
                    ``(B) Transfer of funds.--Notwithstanding section 
                2104(a)(13), from the amounts appropriated in such 
                section for fiscal year 2010, $2,000,000 is hereby 
                transferred and made available in such fiscal year to 
                MACPAC to carry out the provisions of this section.
            ``(4) Availability.--Amounts made available under 
        paragraphs (2) and (3) to MACPAC to carry out the provisions of 
        this section shall remain available until expended.''.
    (b) Conforming MedPAC Amendments.--Section 1805(b) of the Social 
Security Act (42 U.S.C. 1395b-6(b)), is amended--
            (1) in paragraph (1)(C), by striking ``March 1 of each year 
        (beginning with 1998)'' and inserting ``March 15'';
            (2) in paragraph (1)(D), by inserting ``, and (beginning 
        with 2012) containing an examination of the topics described in 
        paragraph (9), to the extent feasible'' before the period; and
            (3) by adding at the end the following:
            ``(9) Review and annual report on medicaid and commercial 
        trends.--The Commission shall review and report on aggregate 
        trends in spending, utilization, and financial performance 
        under the Medicaid program under title XIX and the private 
        market for health care services with respect to providers for 
        which, on an aggregate national basis, a significant portion of 
        revenue or services is associated with the Medicaid program. 
        Where appropriate, the Commission shall conduct such review in 
        consultation with the Medicaid and CHIP Payment and Access 
        Commission (MACPAC) established under section 1900.
            ``(10) Coordinate and consult with the federal coordinated 
        health care office.--The Commission shall coordinate and 
        consult with the Federal Coordinated Health Care Office 
        established under section 1662 of the America's Healthy Future 
        Act of 2009 before making any recommendations regarding dual 
        eligible individuals.''.

              PART X--AMERICAN INDIANS AND ALASKA NATIVES

SEC. 1691. SPECIAL RULES RELATING TO INDIANS.

    (a) No Cost-sharing for Indians With Income at or Below 300 Percent 
of Poverty Enrolled in Coverage Through a State Exchange.--For 
provisions prohibiting cost sharing for Indians enrolled in any 
qualified health benefits plan in the individual market through an 
exchange, see section 2247(d) of the Social Security Act.
    (b) Payer of Last Resort.--Nothing in this Act or the amendments 
made by this Act shall affect the right of the United States, an Indian 
tribe, or a tribal organization to recover reimbursement from third 
parties for the costs of health services in accordance with section 206 
of the Indian Health Care Improvement Act (42 U.S.C. 1621e).
    (c) Facilitating Enrollment of Indians Under the Express Lane 
Option.--Section 1902(e)(13)(F)(ii) of the Social Security Act (42 
U.S.C. 1396a(e)(13)(F)(ii)) is amended--
            (1) in the clause heading, by inserting ``and indian tribes 
        and tribal organizations'' after ``agencies''; and
            (2) by adding at the end the following:
                                    ``(IV) The Indian Health Service, 
                                an Indian Tribe, Tribal Organization, 
                                or Urban Indian Organization (as 
                                defined in section 1139(c)).''.
    (d) Technical Corrections.--Section 1139(c) of the Social Security 
Act (42 U.S.C. 1320b-9(c)) is amended by striking ``In this section'' 
and inserting ``For purposes of this section, title XIX, and title 
XXI''.

SEC. 1692. ELIMINATION OF SUNSET FOR REIMBURSEMENT FOR ALL MEDICARE 
              PART B SERVICES FURNISHED BY CERTAIN INDIAN HOSPITALS AND 
              CLINICS.

    (a) Reimbursement for All Medicare Part B Services Furnished by 
Certain Indian Hospitals and Clinics.--Section 1880(e)(1)(A) of the 
Social Security Act (42 U.S.C. 1395qq(e)(1)(A)) is amended by striking 
``during the 5-year period beginning on'' and inserting ``on or 
after''.
    (b) Effective Date.--The amendments made by this section shall 
apply to items or services furnished on or after January 1, 2010.

               Subtitle H--Addressing Health Disparities

SEC. 1701. STANDARDIZED COLLECTION OF DATA.

    (a) Uniform Categories and Collection Requirements.--
            (1) Application of omb standards for data collection and 
        classification.--The Secretary of Health and Human Services, in 
        consultation with the Director of the Office of Personnel 
        Management, the Secretary of Defense, the Secretary of Veterans 
        Affairs, and the head of other appropriate Federal agencies, 
        shall establish procedures to ensure that, beginning January 1, 
        2011, all data collected under a Federal health care program 
        (as defined in section 1128B(f) of the Social Security Act (42 
        U.S.C. 1320a-7b(f)) and under the health insurance program 
        under chapter 89 of title 5, United States Code, on race, 
        ethnicity, sex, and primary language, complies with the 
        following:
                    (A) Office of Management and Budget Directive 15 
                (Standards for the Classification of Federal Data on 
                Race and Ethnicity).
                    (B) Guidance for Federal agencies that collect or 
                use aggregate data on race issued by the Office of 
                Management and Budget.
                    (C) Guidance for Federal agencies for the 
                allocation of multiple race responses for use in civil 
                rights monitoring and enforcement issued by the Office 
                of Management and Budget.
            (2) Access and treatment for individuals with 
        disabilities.--Not later than January 1, 2012, the Secretary of 
        Health and Human Services, in consultation with the Director of 
        the Office of Personnel Management, the Secretary of Defense, 
        the Secretary of Veterans Affairs, and the head of other 
        appropriate Federal agencies, shall establish procedures for 
        the Administrator of the Centers on Medicare & Medicaid 
        Services to collect data under Federal health care programs (as 
        so defined) and the health insurance program under chapter 89 
        of title 5, United States Code, in order to assess access to 
        care and treatment for individuals with disabilities. Such 
        procedures shall include surveying health care providers to 
        identify--
                    (A) locations where individuals with disabilities 
                access primary, acute (including intensive), and long-
                term care;
                    (B) the number of providers with accessible 
                facilities and equipment to meet the needs of the 
                individuals with disabilities; and
                    (C) the number of employees of health care 
                providers trained in disability awareness and patient 
                care of individuals with disabilities.
    (b) Medicaid Conforming Amendments.--
            (1) State plan requirement.--Section 1902(a) of the Social 
        Security Act (42 U.S.C. 1396a(a)), as amended by section 
        1601(d), is amended--
                    (A) in paragraph (74), by striking ``and'' at the 
                end;
                    (B) in paragraph (75), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by inserting after paragraph (75) the following 
                new paragraph:
            ``(76) provide that any data collected under the State plan 
        meets the requirements of section 1701(a) of the America's 
        Healthy Future Act of 2009.''.
    (c) CHIP Conforming Amendments.--Section 2108(e) of the Social 
Security Act (42 U.S.C. 1397hh(e)) is amended by adding at the end the 
following new paragraph:
            ``(7) Data collected and reported in accordance with 
        section 1701(a) of the America's Healthy Future Act of 2009, 
        with respect to individuals enrolled in the State child health 
        plan (and, in the case of enrollees under 19 years of age, 
        their parents or legal guardians), including data regarding the 
        primary language of such individuals, parents, and legal 
        guardians.''.

SEC. 1702. REQUIRED COLLECTION OF DATA.

    (a) Population Surveys and Quality Reporting.--Beginning January 1, 
2012:
            (1) Federally-funded population surveys.--All federally 
        funded population survey, including Current Population Surveys 
        and American Community Surveys conducted by the Bureau of Labor 
        Statistics and the Bureau of the Census, shall collect 
        sufficient data relating to race, ethnicity, sex, primary 
        language, and types of disability subgroups to generate 
        statistically reliable estimates in studies comparing health 
        disparities populations.
            (2) Quality reporting requirements.--Any reporting 
        requirements imposed for purposes of measuring quality under a 
        Federal health care program (as defined in section 1128B(f) of 
        the such Act (42 U.S.C. 1320a-7b(f)) or under the health 
        insurance program under chapter 89 of title 5, United States 
        Code, shall include requirements for the collection of data on 
        individuals receiving health care items or services under such 
        programs by race, ethnicity, sex, primary language, and types 
        of disability.
    (b) Extending Medicare Requirement to Address Health Disparities 
Data Collection to Medicaid and CHIP.--Title XIX of the Social Security 
Act (42 U.S.C. 1396 et seq.), as amended by section 1640 is amended by 
adding at the end the following new section:

``SEC. 1945. ADDRESSING HEALTH CARE DISPARITIES.

    ``(a) Evaluating Data Collection Approaches.--The Secretary shall 
evaluate approaches for the collection of data under this title and 
title XXI, to be performed in conjunction with existing quality 
reporting requirements and programs under this title and title XXI, 
that allow for the ongoing, accurate, and timely collection and 
evaluation of data on disparities in health care services and 
performance on the basis of race, ethnicity, sex, primary language, and 
types of disability. In conducting such evaluation, the Secretary shall 
consider the following objectives:
            ``(1) Protecting patient privacy.
            ``(2) Minimizing the administrative burdens of data 
        collection and reporting on States, providers, and health plans 
        participating under this title or title XXI.
            ``(3) Improving program data under this title and title XXI 
        on race, ethnicity, sex, primary language, and types of 
        disability.
    ``(b) Reports to Congress.--
            ``(1) Report on evaluation.--Not later than 18 months after 
        the date of the enactment of this section, the Secretary shall 
        submit to Congress a report on the evaluation conducted under 
        subsection (a). Such report shall, taking into consideration 
        the results of such evaluation--
                    ``(A) identify approaches (including defining 
                methodologies) for identifying and collecting and 
                evaluating data on health care disparities on the basis 
                of race, ethnicity, sex, primary language, and types of 
                disability for the programs under this title and title 
                XXI; and
                    ``(B) include recommendations on the most effective 
                strategies and approaches to reporting HEDIS quality 
                measures as required under section 1852(e)(3) and other 
                nationally recognized quality performance measures, as 
                appropriate, on such bases.
            ``(2) Reports on data analyses.--Not later than 4 years 
        after the date of the enactment of this section, and 4 years 
        thereafter, the Secretary shall submit to Congress a report 
        that includes recommendations for improving the identification 
        of health care disparities for beneficiaries under this title 
        and under title XXI based on analyses of the data collected 
        under subsection (c).
    ``(c) Implementing Effective Approaches.--Not later than 24 months 
after the date of the enactment of this section, the Secretary shall 
implement the approaches identified in the report submitted under 
subsection (b)(1) for the ongoing, accurate, and timely collection and 
evaluation of data on health care disparities on the basis of race, 
ethnicity, sex, primary language, and types of disability.''.

SEC. 1703. DATA SHARING AND PROTECTION.

    The Secretary of Health and Human Services, in consultation with 
the Director of the Office of Personnel Management, the Secretary of 
Defense, the Secretary of Veterans Affairs, and the head of other 
appropriate Federal agencies, shall establish procedures --
            (1) for sharing data collected under a Federal health care 
        program (as defined in section 1128B(f) of the such Act (42 
        U.S.C. 1320a-7b(f)) or under the health insurance program under 
        chapter 89 of title 5, United States Code, on race, ethnicity, 
        sex primary language, and type of disability, measures relating 
        to such data, and analyses of such data, with other relevant 
        Federal and State agencies including, within the Department of 
        Health and Human Services, the Office of Minority Health, the 
        Agency for Healthcare Research and Quality, the Centers for 
        Disease Control and Prevention, and the Centers for Medicare & 
        Medicaid Services; and
            (2) establish procedures to ensure that all appropriate 
        privacy and information security safeguards are used in the 
        collection, analysis, and sharing of such data.

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.

    (a) Transition Planning.--Section 475(5)(H) of the Social Security 
Act (42 U.S.C. 675(5)(H)) is amended by inserting ``includes 
information about the importance of designating another individual to 
make health care treatment decisions on behalf of the child if the 
child becomes unable to participate in such decisions and the child 
does not have, or does not want, a relative who would otherwise be 
authorized under State law to make such decisions, and provides the 
child with the option to execute a health care power of attorney, 
health care proxy, or other similar document recognized under State 
law,'' after ``employment services,''.
    (b) Independent Living Education.--Section 477(b)(3) of such Act 
(42 U.S.C. 677(b)(3)) is amended by adding at the end the following:
                    ``(K) A certification by the chief executive 
                officer of the State that the State will ensure that an 
                adolescent participating in the program under this 
                section are provided with education about the 
                importance of designating another individual to make 
                health care treatment decisions on behalf of the 
                adolescent if the adolescent becomes unable to 
                participate in such decisions and the adolescent does 
                not have, or does not want, a relative who would 
                otherwise be authorized under State law to make such 
                decisions, whether a health care power of attorney, 
                health care proxy, or other similar document is 
                recognized under State law, and how to execute such a 
                document if the adolescent wants to do so.''.
    (c) Health Oversight and Coordination Plan.--Section 422(b)(15)(A) 
of such Act (42 U.S.C. 622(b)(15)(A)) is amended--
            (1) in clause (v), by striking ``and'' at the end; and
            (2) by adding at the end the following:
                            ``(vii) steps to ensure that the components 
                        of the transition plan development process 
                        required under section 475(5)(H) that relate to 
                        the health care needs of children aging out of 
                        foster care, including the requirements to 
                        include options for health insurance, 
                        information about a health care power of 
                        attorney, health care proxy, or other similar 
                        document recognized under State law, and to 
                        provide the child with the option to execute 
                        such a document, are met; and''.
    (d) Effective Date.--The amendments made by this section take 
effect on October 1, 2010.

             Subtitle I--Maternal and Child Health Services

SEC. 1801. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING 
              PROGRAMS.

    Title V of the Social Security Act (42 U.S.C. 701 et seq.) is 
amended by adding at the end the following new section:

``SEC. 511. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING 
              PROGRAMS.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to strengthen and improve the programs and activities 
        carried out under this title;
            ``(2) to improve coordination of services for at risk 
        communities; and
            ``(3) to identify and provide comprehensive services to 
        improve outcomes for families who reside in at risk 
        communities.
    ``(b) Requirement for All States to Assess Statewide Needs and 
Identify at Risk Communities.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this section, each State shall, as a condition 
        of receiving payments from an allotment for the State under 
        section 502 for fiscal year 2011, conduct a statewide needs 
        assessment (which shall be separate from the statewide needs 
        assessment required under section 505(a)) that identifies--
                    ``(A) communities with concentrations of--
                            ``(i) premature birth, low-birth weight 
                        infants, and infant mortality, including infant 
                        death due to neglect, or other indicators of 
                        at-risk prenatal, maternal, newborn, or child 
                        health;
                            ``(ii) poverty;
                            ``(iii) crime;
                            ``(iv) domestic violence;
                            ``(v) high rates of high-school drop-outs;
                            ``(vi) substance abuse;
                            ``(vii) unemployment; or
                            ``(viii) child maltreatment;
                    ``(B) the quality and capacity of existing programs 
                or initiatives for early childhood home visitation in 
                the State including--
                            ``(i) the number and types of individuals 
                        and families who are receiving services under 
                        such programs or initiatives;
                            ``(ii) the gaps in early childhood home 
                        visitation in the State; and
                            ``(iii) the extent to which such programs 
                        or initiatives are meeting the needs of 
                        eligible families described in subsection 
                        (k)(2); and
                    ``(C) the State's capacity for providing substance 
                abuse treatment and counseling services to individuals 
                and families in need of such treatment or services.
            ``(2) Coordination with other assessments.--In conducting 
        the statewide needs assessment required under paragraph (1), 
        the State shall coordinate with, and take into account, other 
        appropriate needs assessments conducted by the State, as 
        determined by the Secretary, including the needs assessment 
        required under section 505(a) (both the most recently completed 
        assessment and any such assessment in progress), the 
        communitywide strategic planning and needs assessments 
        conducted in accordance with section 640(g)(1)(C) of the Head 
        Start Act, and the inventory of current unmet needs and current 
        community-based and prevention-focused programs and activities 
        to prevent child abuse and neglect, and other family resource 
        services operating in the State required under section 205(3) 
        of the Child Abuse Prevention and Treatment Act.
            ``(3) Submission to the secretary.--Each State shall submit 
        to the Secretary, in such form and manner as the Secretary 
        shall require--
                    ``(A) the results of the statewide needs assessment 
                required under paragraph (1); and
                    ``(B) a description of how the State intends to 
                address needs identified by the assessment, 
                particularly with respect to communities identified 
                under paragraph (1)(A), which may include applying for 
                a grant to conduct an early childhood home visitation 
                program in accordance with the requirements of this 
                section.
    ``(c) Grants for Early Childhood Home Visitation Programs.--
            ``(1) Authority to make grants.--In addition to any other 
        payments made under this title to a State, the Secretary shall 
        make grants to eligible entities to enable the entities to 
        deliver services under early childhood home visitation programs 
        that satisfy the requirements of subsection (d) to eligible 
        families in order to promote improvements in maternal and 
        prenatal health, infant health, child health and development, 
        parenting related to child development outcomes, school 
        readiness, and the socioeconomic status of such families, and 
        reductions in child abuse, neglect, and injuries.
            ``(2) Authority to use initial grant funds for planning or 
        implementation.--An eligible entity that receives a grant under 
        paragraph (1) may use a portion of the funds made available to 
        the entity during the first 6 months of the period for which 
        the grant is made for planning or implementation activities to 
        assist with the establishment of early childhood home 
        visitation programs that satisfy the requirements of subsection 
        (d).
            ``(3) Grant duration.--The Secretary shall determine the 
        period of years for which a grant is made to an eligible entity 
        under paragraph (1).
    ``(d) Requirements.--The requirements of this subsection for an 
early childhood home visitation program conducted with a grant made 
under this section are as follows:
            ``(1) Quantifiable, measurable improvement in benchmark 
        areas.--
                    ``(A) In general.--The eligible entity establishes, 
                subject to the approval of the Secretary, quantifiable, 
                measurable 3- and 5-year benchmarks for demonstrating 
                that the program results in improvements for the 
                eligible families participating in the program in each 
                of the following areas:
                            ``(i) Improved maternal and newborn health.
                            ``(ii) Prevention of child injuries and 
                        reduction of emergency department visits.
                            ``(iii) Improvement in school readiness and 
                        achievement.
                            ``(iv) Reduction in crime or domestic 
                        violence.
                            ``(v) Improvements in family economic self-
                        sufficiency.
                            ``(vi) Improvements in the coordination and 
                        referrals for other community resources and 
                        supports.
                    ``(B) Demonstration of improvements after 3 
                years.--
                            ``(i) Report to the secretary.--Not later 
                        than 30 days after the end of the 3rd year in 
                        which the eligible entity conducts the program, 
                        the entity submits to the Secretary a report 
                        demonstrating improvement in at least 4 of the 
                        areas specified in subparagraph (A).
                            ``(ii) Corrective action plan.--If the 
                        report submitted by the eligible entity under 
                        clause (i) fails to demonstrate improvement in 
                        at least 4 of the areas specified in 
                        subparagraph (A), the entity shall develop and 
                        implement a plan to improve outcomes in each of 
                        the areas specified in subparagraph (A), 
                        subject to approval by the Secretary. The plan 
                        shall include provisions for the Secretary to 
                        monitor implementation of the plan and conduct 
                        continued oversight of the program, including 
                        through submission by the entity of regular 
                        reports to the Secretary.
                            ``(iii) Technical assistance.--
                                    ``(I) In general.--The Secretary 
                                shall provide an eligible entity 
                                required to develop and implement an 
                                improvement plan under clause (ii) with 
                                technical assistance to develop and 
                                implement the plan. The Secretary may 
                                provide the technical assistance 
                                directly or through grants, contracts, 
                                or cooperative agreements.
                                    ``(II) Advisory panel.--The 
                                Secretary shall establish an advisory 
                                panel for purposes of obtaining 
                                recommendations regarding the technical 
                                assistance provided to entities in 
                                accordance with subclause (I).
                            ``(iv) No improvement or failure to submit 
                        report.--If the Secretary determines after a 
                        period of time specified by the Secretary that 
                        an eligible entity implementing an improvement 
                        plan under clause (ii) has failed to 
                        demonstrate any improvement in the areas 
                        specified in subparagraph (A), or if the 
                        Secretary determines that an eligible entity 
                        has failed to submit the report required under 
                        clause (i), the Secretary shall terminate the 
                        entity's grant and may include any unexpended 
                        grant funds in grants made to nonprofit 
                        organizations under subsection (h)(2)(B).
                    ``(C) Final report.--Not later than December 31, 
                2014, the eligible entity shall submit a report to the 
                Secretary demonstrating improvements (if any) in each 
                of the areas specified in subparagraph (A).
            ``(2) Improvements in outcomes for individual families.--
                    ``(A) In general.--The program is designed, with 
                respect to an eligible family participating in the 
                program, to result in the participant outcomes 
                described in subparagraph (B) that the eligible entity 
                identifies on the basis of an individualized assessment 
                of the family, are relevant for that family.
                    ``(B) Participant outcomes.--The participant 
                outcomes described in this subparagraph are the 
                following:
                            ``(i) Improvements in prenatal, maternal, 
                        and newborn health, including improved 
                        pregnancy outcomes
                            ``(ii) Improvements in child health and 
                        development, including the prevention of child 
                        injuries and maltreatment and improvements in 
                        cognitive, language, social-emotional, and 
                        physical developmental indicators.
                            ``(iii) Improvements in parenting skills.
                            ``(iv) Improvements in school readiness and 
                        child academic achievement.
                            ``(v) Reductions in crime or domestic 
                        violence.
                            ``(vi) Improvements in family economic 
                        self-sufficiency.
                            ``(vii) Improvements in the coordination of 
                        referrals for, and the provision of, other 
                        community resources and supports for eligible 
                        families, consistent with State child welfare 
                        agency training.
            ``(3) Core components.--The program includes the following 
        core components:
                    ``(A) Service delivery model or models.--
                            ``(i) In general.--Subject to clause (ii), 
                        the program is conducted using 1 or more of the 
                        service delivery models described in item (aa) 
                        or (bb) of subclause (I) or in subclause (II) 
                        selected by the eligible entity:
                                    ``(I) The model conforms to a clear 
                                consistent home visitation model that 
                                has been in existence for at least 3 
                                years and is research-based, grounded 
                                in relevant empirically-based 
                                knowledge, linked to program determined 
                                outcomes, associated with a national 
                                organization or institution of higher 
                                education that has comprehensive home 
                                visitation program standards that 
                                ensure high quality service delivery 
                                and continuous program quality 
                                improvement, and has demonstrated 
                                significant, (and in the case of the 
                                service delivery model described in 
                                item (aa), sustained) positive 
                                outcomes, as described in the benchmark 
                                areas specified in paragraph (1)(A) and 
                                the participant outcomes described in 
                                paragraph (2)(B), when evaluated using 
                                well-designed and rigorous--
                                            ``(aa) randomized 
                                        controlled research designs, 
                                        and the evaluation results have 
                                        been published in a peer-
                                        reviewed journal; or
                                            ``(bb) quasi-experimental 
                                        research designs.
                                    ``(II) The model conforms to a 
                                promising and new approach to achieving 
                                the benchmark areas specified in 
                                paragraph (1)(A) and the participant 
                                outcomes described in paragraph (2)(B), 
                                has been developed or identified by a 
                                national organization or institution of 
                                higher education, and will be evaluated 
                                through well-designed and rigorous 
                                process.
                            ``(ii) Majority of grant funds used for 
                        evidence-based models.--An eligible entity 
                        shall use not more than 25 percent of the 
                        amount of the grant paid to the entity for a 
                        fiscal year for purposes of conducting a 
                        program using the service delivery model 
                        described in clause (i)(III).
                            ``(iii) Criteria for evidence of 
                        effectiveness of models.--The Secretary shall 
                        establish criteria for evidence of 
                        effectiveness of the service delivery models 
                        (which may be tiered) and for assessing such 
                        evidence with respect to each such model. The 
                        Secretary shall ensure that the process for 
                        establishing the criteria is transparent and 
                        provides the opportunity for public comment.
                    ``(B) Additional requirements.--
                            ``(i) The program adheres to a clear, 
                        consistent model that satisfies the 
                        requirements of being grounded in empirically-
                        based knowledge related to home visiting and 
                        linked to the benchmark areas specified in 
                        paragraph (1)(A) and the participant outcomes 
                        described in paragraph (2)(B).
                            ``(ii) The program employs well-trained and 
                        competent staff, as demonstrated by education 
                        or training, such as nurses, social workers, 
                        child development specialists, or other well-
                        trained and competent staff, and provides 
                        ongoing and specific training on the model 
                        being delivered.
                            ``(iii) The program maintains high quality 
                        supervision to establish home visitor 
                        competencies.
                            ``(iv) The program demonstrates strong 
                        organizational capacity to implement the 
                        activities involved.
                            ``(v) The program establishes appropriate 
                        linkages and referral networks to other 
                        community resources and supports for eligible 
                        families.
                            ``(vi) The program monitors the fidelity of 
                        program implementation to ensure that services 
                        are delivered pursuant to the specified model.
            ``(4) Priority for serving high-risk populations.--The 
        eligible entity gives priority to providing services under the 
        program to the following:
                    ``(A) Eligible families who reside in communities 
                in need of such services, as identified in the 
                statewide needs assessment required under subsection 
                (b)(1)(A).
                    ``(B) Low-income eligible families.
                    ``(C) Eligible families who are pregnant women who 
                have not attained age 21.
                    ``(D) Eligible families that have a history of 
                child abuse or neglect.
                    ``(E) Eligible families that have had interactions 
                with child welfare services.
                    ``(F) Eligible families that have a history of 
                substance abuse or need substance abuse treatment.
                    ``(G) Eligible families that have users of tobacco 
                products in the home.
                    ``(H) Eligible families that are or have children 
                with low student achievement.
                    ``(I) Eligible families with children with 
                developmental delays or disabilities.
                    ``(J) Eligible families who, or that include 
                individuals who, are serving or formerly served in the 
                Armed Forces, including such families that have members 
                of the Armed Forces who have had multiple deployments 
                outside of the United States.
    ``(e) Application Requirements.--An eligible entity desiring a 
grant under this section shall submit an application to the Secretary 
for approval, in such manner as the Secretary may require, that 
includes the following:
            ``(1) A description of the populations to be served by the 
        entity, including specific information regarding how the entity 
        will serve high risk populations described in subsection 
        (d)(4).
            ``(2) An assurance that the entity will give priority to 
        serving low-income eligible families and eligible families who 
        reside in at risk communities identified in the statewide needs 
        assessment required under subsection (b)(1)(A).
            ``(3) The service delivery model or models described in 
        subsection (d)(3)(A) that the entity will use under the program 
        and the basis for the selection of the model or models.
            ``(4) A statement identifying how the selection of the 
        populations to be served and the service delivery model or 
        models that the entity will use under the program for such 
        populations is consistent with the results of the statewide 
        needs assessment conducted under subsection (b).
            ``(5) The quantifiable, measurable benchmarks established 
        by the State to demonstrate that the program contributes to 
        improvements in the areas specified in subsection (d)(1)(A).
            ``(6) An assurance that the entity will obtain and submit 
        documentation or other appropriate evidence from the 
        organization or entity that developed the service delivery 
        model or models used under the program to verify that the 
        program is implemented and services are delivered according to 
        the model specifications.
            ``(7) Assurances that the entity will establish procedures 
        to ensure that--
                    ``(A) the participation of each eligible family in 
                the program is voluntary; and
                    ``(B) services are provided to an eligible family 
                in accordance with the individual assessment for that 
                family.
            ``(8) Assurances that the entity will--
                    ``(A) submit annual reports to the Secretary 
                regarding the program and activities carried out under 
                the program that include such information and data as 
                the Secretary shall require; and
                    ``(B) participate in, and cooperate with, data and 
                information collection necessary for the evaluation 
                required under subsection (g)(2) and other research and 
                evaluation activities carried out under subsection 
                (h)(3).
            ``(9) A description of other State programs that include 
        home visitation services, including, if applicable to the 
        State, other programs carried out under this title with funds 
        made available from allotments under section 502(c), programs 
        funded under title IV, title II of the Child Abuse Prevention 
        and Treatment Act (relating to community-based grants for the 
        prevention of child abuse and neglect), and section 645A of the 
        Head Start Act (relating to Early Head Start programs).
            ``(10) Other information as required by the Secretary.
    ``(f) Maintenance of Effort.--Funds provided to an eligible entity 
receiving a grant under this section shall supplement, and not 
supplant, funds from other sources for early childhood home visitation 
programs or initiatives.
    ``(g) Evaluation.--
            ``(1) Independent, expert advisory panel.--The Secretary, 
        in accordance with subsection (h)(1)(A), shall appoint an 
        independent advisory panel consisting of experts in program 
        evaluation and research, education, and early childhood 
        programs--
                    ``(A) to review, and make recommendations on, the 
                design and plan for the evaluation required under 
                paragraph (2) within 1 year after the date of enactment 
                of this section;
                    ``(B) to maintain and advise the Secretary 
                regarding the progress of the evaluation; and
                    ``(C) to comment, if the panel so desires, on the 
                report submitted under paragraph (3).
            ``(2) Authority to conduct evaluation.--On the basis of the 
        recommendations of the advisory panel under paragraph (1), the 
        Secretary shall, by grant, contract, or interagency agreement, 
        conduct an evaluation of the statewide needs assessments 
        submitted under subsection (b) and the grants made under 
        subsections (c) and (h)(3)(B). The evaluation shall include--
                    ``(A) an analysis, on a State-by-State basis, of 
                the results of such assessments, including indicators 
                of maternal and prenatal health and infant health and 
                mortality, and State actions in response to the 
                assessments; and
                    ``(B) an assessment of--
                            ``(i) the effect of early childhood home 
                        visitation programs on child and parent 
                        outcomes, including with respect to each of the 
                        benchmark areas specified in subsection 
                        (d)(1)(A) and the participant outcomes 
                        described in subsection (d)(2)(B);
                            ``(ii) the effectiveness of such programs 
                        on different populations, including the extent 
                        to which the ability of programs to improve 
                        participant outcomes varies across programs and 
                        populations; and
                            ``(iii) the potential for the activities 
                        conducted under such programs, if scaled 
                        broadly, to improve health care practices, 
                        eliminate health disparities, and improve 
                        health care system quality, efficiencies, and 
                        reduce costs.
            ``(3) Report.--Not later than March 31, 2015, the Secretary 
        shall submit a report to Congress on the results of the 
        evaluation conducted under paragraph (2) and shall make the 
        report publicly available.
    ``(h) Other Provisions.--
            ``(1) Intra-agency collaboration.--The Secretary shall 
        ensure that the Maternal and Child Health Bureau and the 
        Administration for Children and Families collaborate with 
        respect to all aspects of carrying out this section, including 
        with respect to--
                    ``(A) reviewing and analyzing the statewide needs 
                assessments required under subsection (b), the awarding 
                and oversight of grants awarded under this section, the 
                establishment of the advisory panels required under 
                subsections (d)(1)(B)(iii)(II) and (g)(1), and the 
                evaluation and report required under subsection (g); 
                and
                    ``(B) consulting with other Federal agencies with 
                responsibility for administering or evaluating programs 
                that serve eligible families to coordinate and 
                collaborate with respect to research related to such 
                programs and families, including the Office of the 
                Assistant Secretary for Planning and Evaluation of the 
                Department of Health and Human Services, the Centers 
                for Disease Control and Prevention, the National 
                Institute of Child Health and Human Development of the 
                National Institutes of Health, the Office of Juvenile 
                Justice and Delinquency Prevention of the Department of 
                Justice, and the Institute of Education Sciences of the 
                Department of Education.
            ``(2) Grants to eligible entities that are not states.--
                    ``(A) Indian tribes, tribal organizations, or urban 
                indian organizations.--The Secretary shall specify 
                requirements for eligible entities that are Indian 
                Tribes (or a consortium of Indian Tribes), Tribal 
                Organizations, or Urban Indian Organizations to apply 
                for and conduct an early childhood home visitation 
                program with a grant under this section. Such 
                requirements shall, to the greatest extent practicable, 
                be consistent with the requirements applicable to 
                eligible entities that are States and shall require an 
                Indian Tribe (or consortium), Tribal Organization, or 
                Urban Indian Organization to--
                            ``(i) conduct a needs assessment similar to 
                        the assessment required for all States under 
                        subsection (b); and
                            ``(ii) establish quantifiable, measurable 
                        3- and 5-year benchmarks consistent with 
                        subsection (d)(1)(A).
                    ``(B) Nonprofit organizations.--If, as of the 
                beginning of fiscal year 2012, a State has not applied 
                and been approved for a grant under this section, the 
                Secretary may use amounts appropriated under paragraph 
                (1) of subsection (j) that are available for 
                expenditure under paragraph (3) of that subsection to 
                make a grant to an eligible entity that is a nonprofit 
                organization described in subsection (k)(1)(B) to 
                conduct an early childhood home visitation program in 
                the State. The Secretary shall specify the requirements 
                for such an organization to apply for and conduct the 
                program which shall, to the greatest extent 
                practicable, be consistent with the requirements 
                applicable to eligible entities that are States and 
                shall require the organization to--
                            ``(i) carry out the program based on the 
                        needs assessment conducted by the State under 
                        subsection (b); and
                            ``(ii) establish quantifiable, measurable 
                        3- and 5-year benchmarks consistent with 
                        subsection (d)(1)(A).
            ``(3) Research and other evaluation activities.--
                    ``(A) In general.--The Secretary shall carry out a 
                continuous program of research and evaluation 
                activities in order to increase knowledge about the 
                implementation and effectiveness of home visiting 
                programs, using random assignment designs to the 
                maximum extent feasible. The Secretary may carry out 
                such activities directly, or through grants, 
                cooperative agreements, or contracts.
                    ``(B) Requirements.--The Secretary shall ensure 
                that--
                            ``(i) evaluation of a specific program or 
                        project is conducted by persons or individuals 
                        not directly involved in the operation of such 
                        program or project; and
                            ``(ii) the conduct of research and 
                        evaluation activities includes consultation 
                        with independent researchers, State officials, 
                        and developers and providers of home visiting 
                        programs on topics including research design 
                        and administrative data matching.
            ``(4) Report and recommendation.--Not later than December 
        31, 2015, the Secretary shall submit a report to Congress 
        regarding the programs conducted with grants under this 
        section. The report required under this paragraph shall 
        include--
                    ``(A) information regarding the extent to which 
                eligible entities receiving grants under this section 
                demonstrated improvements in each of the areas 
                specified in subsection (d)(1)(A);
                    ``(B) information regarding any technical 
                assistance provided under subsection (d)(1)(B)(iii)(I), 
                including the type of any such assistance provided; and
                    ``(C) recommendations for such legislative or 
                administrative action as the Secretary determines 
                appropriate.
    ``(i) Application of Other Provisions of Title.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        other provisions of this title shall not apply to a grant made 
        under this section.
            ``(2) Exceptions.--The following provisions of this title 
        shall apply to a grant made under this section to the same 
        extent and in the same manner as such provisions apply to 
        allotments made under section 502(c):
                    ``(A) Section 504(b)(6) (relating to prohibition on 
                payments to excluded individuals and entities).
                    ``(B) Section 504(c) (relating to the use of funds 
                for the purchase of technical assistance).
                    ``(C) Section 504(d) (relating to a limitation on 
                administrative expenditures).
                    ``(D) Section 506 (relating to reports and audits), 
                but only to the extent determined by the Secretary to 
                be appropriate for grants made under this section.
                    ``(E) Section 507 (relating to penalties for false 
                statements).
                    ``(F) Section 508 (relating to nondiscrimination).
                    ``(G) Section 509(a) (relating to the 
                administration of the grant program).
    ``(j) Appropriations.--
            ``(1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        to carry out this section--
                    ``(A) $100,000,000 for fiscal year 2010;
                    ``(B) $250,000,000 for fiscal year 2011;
                    ``(C) $350,000,000 for fiscal year 2012;
                    ``(D) $400,000,000 for fiscal year 2013; and
                    ``(E) $400,000,000 for fiscal year 2014.
            ``(2) Reservations.--Of the amount appropriated under this 
        subsection for a fiscal year, the Secretary shall reserve--
                    ``(A) 3 percent of such amount for purposes of 
                making grants to eligible entities that are Indian 
                Tribes (or a consortium of Indian Tribes), Tribal 
                Organizations, or Urban Indian Organizations; and
                    ``(B) 3 percent of such amount for purposes of 
                carrying out subsections (d)(1)(B)(iii), (g), and 
                (h)(3).
            ``(3) Availability.--Funds made available to an eligible 
        entity under this section for a fiscal year shall remain 
        available for expenditure by the eligible entity through the 
        end of the second succeeding fiscal year after award. Any funds 
        that are not expended by the eligible entity during the period 
        in which the funds are available under the preceding sentence 
        may be used for grants to nonprofit organizations under 
        subsection (h)(2)(B).
    ``(k) Definitions.--In this section:
            ``(1) Eligible entity.--
                    ``(A) In general.--The term `eligible entity' means 
                a State, an Indian Tribe, Tribal Organization, or Urban 
                Indian Organization, Puerto Rico, Guam, the Virgin 
                Islands, the Northern Mariana Islands, and American 
                Samoa.
                    ``(B) Nonprofit organizations.--Only for purposes 
                of awarding grants under subsection (h)(2)(B), such 
                term shall include a nonprofit organization with an 
                established record of providing early childhood home 
                visitation programs or initiatives in a State or 
                several States.
            ``(2) Eligible family.--The term `eligible family' means--
                    ``(A) a woman who is pregnant, and the father of 
                the child if the father is available; or
                    ``(B) a parent or primary caregiver of a child, 
                including grandparents or other relatives of the child, 
                and foster parents, who are serving as the child's 
                primary caregiver from birth until entry into 
                kindergarten, and including a noncustodial parent who 
                has an ongoing relationship with, and at times provides 
                physical care for, the child.
            ``(3) Indian tribe; tribal organization.--The terms `Indian 
        Tribe' and `Tribal Organization', and `Urban Indian 
        Organization' have the meanings given such terms in section 4 
        of the Indian Health Care Improvement Act.''.

SEC. 1802. SUPPORT, EDUCATION, AND RESEARCH FOR POSTPARTUM DEPRESSION.

    (a) Definitions.--In this section:
            (1) The term ``postpartum condition'' means postpartum 
        depression or postpartum psychosis.
            (2) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
    (b) Research on Postpartum Conditions.--
            (1) Expansion and intensification of activities.--
                    (A) Continuation of activities.--The Secretary is 
                encouraged to continue activities on postpartum 
                conditions.
                    (B) Programs for postpartum conditions.--In 
                carrying out subparagraph (A), the Secretary is 
                encouraged to continue research to expand the 
                understanding of the causes of, and treatments for, 
                postpartum conditions. Activities under such subsection 
                shall include conducting and supporting the following:
                            (i) Basic research concerning the etiology 
                        and causes of the conditions.
                            (ii) Epidemiological studies to address the 
                        frequency and natural history of the conditions 
                        and the differences among racial and ethnic 
                        groups with respect to the conditions.
                            (iii) The development of improved screening 
                        and diagnostic techniques.
                            (iv) Clinical research for the development 
                        and evaluation of new treatments.
                            (v) Information and education programs for 
                        health care professionals and the public, which 
                        may include a coordinated national campaign to 
                        increase the awareness and knowledge of 
                        postpartum conditions. Activities under such a 
                        national campaign may--
                                    (I) include public service 
                                announcements through television, 
                                radio, and other means; and
                                    (II) focus on--
                                            (aa) raising awareness 
                                        about screening;
                                            (bb) educating new mothers 
                                        and their families about 
                                        postpartum conditions to 
                                        promote earlier diagnosis and 
                                        treatment; and
                                            (cc) ensuring that such 
                                        education includes complete 
                                        information concerning 
                                        postpartum conditions, 
                                        including its symptoms, methods 
                                        of coping with the illness, and 
                                        treatment resources.
            (2) Sense of congress regarding longitudinal study of 
        relative mental health consequences for women of resolving a 
        pregnancy.--
                    (A) Sense of congress.--It is the sense of Congress 
                that the Director of the National Institute of Mental 
                Health may conduct a nationally representative 
                longitudinal study (during the period of fiscal years 
                2010 through 2019) of the relative mental health 
                consequences for women of resolving a pregnancy 
                (intended and unintended) in various ways, including 
                carrying the pregnancy to term and parenting the child, 
                carrying the pregnancy to term and placing the child 
                for adoption, miscarriage, and having an abortion. This 
                study may assess the incidence, timing, magnitude, and 
                duration of the immediate and long-term mental health 
                consequences (positive or negative) of these pregnancy 
                outcomes.
                    (B) Report.--Subject to the completion of the study 
                under subsection (a), beginning not later than 5 years 
                after the date of the enactment of this Act, and 
                periodically thereafter for the duration of the study, 
                such Director may prepare and submit to the Congress 
                reports on the findings of the study.
    (c) Grants to Provide Services to Individuals With a Postpartum 
Condition and Their Families.--Title V of the Social Security Act (42 
U.S.C. 701 et seq.), as amended by section 1801, is amended by adding 
at the end the following new section:

``SEC. 512. SERVICES TO INDIVIDUALS WITH A POSTPARTUM CONDITION AND 
              THEIR FAMILIES.

    ``(a) In General.--In addition to any other payments made under 
this title to a State, the Secretary may make grants to eligible 
entities for projects for the establishment, operation, and 
coordination of effective and cost-efficient systems for the delivery 
of essential services to individuals with a postpartum condition and 
their families.
    ``(b) Certain Activities.--To the extent practicable and 
appropriate, the Secretary shall ensure that projects funded under 
subsection (a) provide education and services with respect to the 
diagnosis and management of postpartum conditions. The Secretary may 
allow such projects to include the following:
            ``(1) Delivering or enhancing outpatient and home-based 
        health and support services, including case management and 
        comprehensive treatment services for individuals with or at 
        risk for postpartum conditions, and delivering or enhancing 
        support services for their families.
            ``(2) Delivering or enhancing inpatient care management 
        services that ensure the well-being of the mother and family 
        and the future development of the infant.
            ``(3) Improving the quality, availability, and organization 
        of health care and support services (including transportation 
        services, attendant care, homemaker services, day or respite 
        care, and providing counseling on financial assistance and 
        insurance) for individuals with a postpartum condition and 
        support services for their families.
            ``(4) Providing education to new mothers and, as 
        appropriate, their families about postpartum conditions to 
        promote earlier diagnosis and treatment. Such education may 
        include--
                    ``(A) providing complete information on postpartum 
                conditions, symptoms, methods of coping with the 
                illness, and treatment resources; and
                    ``(B) in the case of a grantee that is a State, 
                hospital, or birthing facility--
                            ``(i) providing education to new mothers 
                        and fathers, and other family members as 
                        appropriate, concerning postpartum conditions 
                        before new mothers leave the health facility; 
                        and
                            ``(ii) ensuring that training programs 
                        regarding such education are carried out at the 
                        health facility.
    ``(c) Integration With Other Programs.--To the extent practicable 
and appropriate, the Secretary may integrate the grant program under 
this section with other grant programs carried out by the Secretary, 
including the program under section 330 of the Public Health Service 
Act.
    ``(d) Certain Requirements.--A grant may be made under this section 
only if the applicant involved makes the following agreements:
            ``(1) Not more than 5 percent of the grant will be used for 
        administration, accounting, reporting, and program oversight 
        functions.
            ``(2) The grant will be used to supplement and not supplant 
        funds from other sources related to the treatment of postpartum 
        conditions.
            ``(3) The applicant will abide by any limitations deemed 
        appropriate by the Secretary on any charges to individuals 
        receiving services pursuant to the grant. As deemed appropriate 
        by the Secretary, such limitations on charges may vary based on 
        the financial circumstances of the individual receiving 
        services.
            ``(4) The grant will not be expended to make payment for 
        services authorized under subsection (a) to the extent that 
        payment has been made, or can reasonably be expected to be 
        made, with respect to such services--
                    ``(A) under any State compensation program, under 
                an insurance policy, or under any Federal or State 
                health benefits program; or
                    ``(B) by an entity that provides health services on 
                a prepaid basis.
            ``(5) The applicant will, at each site at which the 
        applicant provides services funded under subsection (a), post a 
        conspicuous notice informing individuals who receive the 
        services of any Federal policies that apply to the applicant 
        with respect to the imposition of charges on such individuals.
            ``(6) For each grant period, the applicant will submit to 
        the Secretary a report that describes how grant funds were used 
        during such period.
    ``(e) Technical Assistance.--The Secretary may provide technical 
assistance to entities seeking a grant under this section in order to 
assist such entities in complying with the requirements of this 
section.
    ``(f) Application of Other Provisions of Title.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        other provisions of this title shall not apply to a grant made 
        under this section.
            ``(2) Exceptions.--The following provisions of this title 
        shall apply to a grant made under this section to the same 
        extent and in the same manner as such provisions apply to 
        allotments made under section 502(c):
                    ``(A) Section 504(b)(6) (relating to prohibition on 
                payments to excluded individuals and entities).
                    ``(B) Section 504(c) (relating to the use of funds 
                for the purchase of technical assistance).
                    ``(C) Section 504(d) (relating to a limitation on 
                administrative expenditures).
                    ``(D) Section 506 (relating to reports and audits), 
                but only to the extent determined by the Secretary to 
                be appropriate for grants made under this section.
                    ``(E) Section 507 (relating to penalties for false 
                statements).
                    ``(F) Section 508 (relating to nondiscrimination).
                    ``(G) Section 509(a) (relating to the 
                administration of the grant program).
    ``(g) Definitions.--In this section:
            ``(1) The term `eligible entity'--
                    ``(A) means a public or nonprofit private entity; 
                and
                    ``(B) includes a State or local government, public-
                private partnership, recipient of a grant under section 
                330H of the Public Health Service Act (relating to the 
                Healthy Start Initiative), public or nonprofit private 
                hospital, community-based organization, hospice, 
                ambulatory care facility, community health center, 
                migrant health center, public housing primary care 
                center, or homeless health center.
            ``(2) The term `postpartum condition' means postpartum 
        depression or postpartum psychosis.''.
    (d) General Provisions.--
            (1) Authorization of appropriations.--To carry out this 
        section and the amendment made by subsection (c), there are 
        authorized to be appropriated, in addition to such other sums 
        as may be available for such purpose--
                    (A) $3,000,000 for fiscal year 2010; and
                    (B) such sums as may be necessary for fiscal years 
                2011 and 2012.
            (2) Report by the secretary.--
                    (A) Study.--The Secretary shall conduct a study on 
                the benefits of screening for postpartum conditions.
                    (B) Report.--Not later than 2 years after the date 
                of the enactment of this Act, the Secretary shall 
                complete the study required by subparagraph (A) and 
                submit a report to the Congress on the results of such 
                study.
            (3) Limitation.--Notwithstanding any other provision of 
        this section or the amendment made by subsection (c), the 
        Secretary may not utilize amounts made available under this 
        section or such amendment to carry out activities or programs 
        that are duplicative of activities or programs that are already 
        being carried out through the Department of Health and Human 
        Services.

SEC. 1803. PERSONAL RESPONSIBILITY EDUCATION FOR ADULTHOOD TRAINING.

    Title V of the Social Security Act (42 U.S.C. 701 et seq.), as 
amended by sections 1801 and 1802(c), is amended by adding at the end 
the following:

``SEC. 513. PERSONAL RESPONSIBILITY EDUCATION FOR ADULTHOOD (PRE-
              ADULTHOOD) TRAINING.

    ``(a) Allotments to States.--
            ``(1) Amount.--
                    ``(A) In general.--For the purpose described in 
                subsection (b), subject to the succeeding provisions of 
                this section, for each of fiscal years 2010 through 
                2014, the Secretary shall allot to each State an amount 
                equal to the product of--
                            ``(i) the amount appropriated under 
                        subsection (f) for the fiscal year and 
                        available for allotments to States after the 
                        application of subsection (c); and
                            ``(ii) the State youth population 
                        percentage determined under paragraph (2).
                    ``(B) Minimum allotment.--
                            ``(i) In general.--Each State allotment 
                        under this paragraph for a fiscal year shall be 
                        at least $250,000.
                            ``(ii) Pro rata adjustments.--The Secretary 
                        shall adjust on a pro rata basis the amount of 
                        the State allotments determined under this 
                        paragraph for a fiscal year to the extent 
                        necessary to comply with clause (i).
                    ``(C) Application required to access allotments.--
                            ``(i) In general.--A State shall not be 
                        paid from its allotment for a fiscal year 
                        unless the State submits an application to the 
                        Secretary for the fiscal year and the Secretary 
                        approves the application (or requires changes 
                        to the application that the State satisfies) 
                        and meets such additional requirements as the 
                        Secretary may specify.
                            ``(ii) Requirements.--The State application 
                        shall contain an assurance that the State has 
                        complied with the requirements of this section 
                        in preparing and submitting the application and 
                        shall include the following as well as such 
                        additional information as the Secretary may 
                        require:
                                    ``(I) Based on data from the 
                                Centers for Disease Control and 
                                Prevention National Center for Health 
                                Statistics, the most recent pregnancy 
                                rates for the State for youth ages 10 
                                to 14 and youth ages 15 to 19 for which 
                                data are available, the most recent 
                                birth rates for such youth populations 
                                in the State for which data are 
                                available, and trends in those rates 
                                for the most recently preceding 5-year 
                                period for which such data are 
                                available.
                                    ``(II) State-established goals for 
                                reducing the pregnancy rates and birth 
                                rates for such youth populations.
                                    ``(III) A description of the 
                                State's plan for using the State 
                                allotments provided under this section 
                                to achieve such goals, especially among 
                                youth populations that are the most 
                                high-risk or vulnerable for pregnancies 
                                or otherwise have special 
                                circumstances, including youth in 
                                foster care, homeless youth, youth with 
                                HIV/AIDS, pregnant youth who are under 
                                21 years of age, mothers who are under 
                                21 years of age, and youth residing in 
                                areas with high birth rates for youth.
            ``(2) State youth population percentage.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(A)(ii), the State youth population percentage is, 
                with respect to a State, the proportion (expressed as a 
                percentage) of--
                            ``(i) the number of individuals who have 
                        attained age 10 but not attained age 20 in the 
                        State; to
                            ``(ii) the number of such individuals in 
                        all States.
                    ``(B) Determination of number of youth.--The number 
                of individuals described in clauses (i) and (ii) of 
                subparagraph (A) in a State shall be determined on the 
                basis of the most recent Bureau of the Census data.
            ``(3) Availability of state allotments.--Subject to 
        paragraph (4)(A), amounts allotted to a State pursuant to this 
        subsection for a fiscal year shall remain available for 
        expenditure by the State through the end of the second 
        succeeding fiscal year.
            ``(4) Authority to award grants from state allotments to 
        local organizations and entities in nonparticipating states.--
                    ``(A) Grants from unexpended allotments.--If a 
                State does not submit an application under this section 
                for fiscal year 2010 or 2011, the State shall no longer 
                be eligible to submit an application to receive funds 
                from the amounts allotted for the State for each of 
                fiscal years 2010 through 2014 and such amounts shall 
                be used by the Secretary to award grants under this 
                paragraph for each of fiscal years 2012 through 2014. 
                The Secretary also shall use any amounts from the 
                allotments of States that submit applications under 
                this section for a fiscal year that remain unexpended 
                as of the end of the period in which the allotments are 
                available for expenditure under paragraph (3) for 
                awarding grants under this paragraph.
                    ``(B) 3-year grants.--
                            ``(i) In general.--The Secretary shall 
                        solicit applications to award 3-year grants in 
                        each of fiscal years 2012, 2013, and 2014 to 
                        local organizations and entities to conduct, 
                        consistent with subsection (b), programs and 
                        activities in States that do not submit an 
                        application for an allotment under this section 
                        for fiscal year 2010 or 2011.
                            ``(ii) Faith-based organizations or 
                        consortia.--The Secretary may solicit and award 
                        grants under this paragraph to faith-based 
                        organizations or consortia, consistent with the 
                        requirements of section 1955 of the Public 
                        Health Service Act relating to a grant award to 
                        nongovernmental entities.
                    ``(C) Evaluation.--An organization or entity 
                awarded a grant under this paragraph shall agree to 
                participate in a rigorous Federal evaluation.
            ``(5) Maintenance of effort.--No payment shall be made to a 
        State from the allotment determined for the State under this 
        subsection or to a local organization or entity awarded a grant 
        under paragraph (4), if the expenditure of non-federal funds by 
        the State, organization, or entity for activities, programs, or 
        initiatives for which amounts from allotments and grants under 
        this subsection may be expended is less than the amount 
        expended by the State, organization, or entity for such 
        programs or initiatives for fiscal year 2009.
            ``(6) Data collection and reporting.--A State or local 
        organization or entity receiving funds under this section shall 
        cooperate with such requirements relating to the collection of 
        data and information and reporting on outcomes regarding the 
        programs and activities carried out with such funds, as the 
        Secretary shall specify.
    ``(b) Purpose.--
            ``(1) In general.--The purpose of an allotment under 
        subsection (a)(1) to a State is to enable the State (or, in the 
        case of grants made under subsection (a)(4)(B), to enable a 
        local organization or entity) to carry out personal 
        responsibility education for adulthood programs consistent with 
        this subsection.
            ``(2) Personal responsibility education for adulthood 
        programs.--
                    ``(A) In general.--In this section, the term 
                `personal responsibility education for adulthood 
                program' means a program that is designed to educate 
                adolescents on--
                            ``(i) both abstinence and contraception for 
                        the prevention of pregnancy and sexually 
                        transmitted infections, including HIV/AIDS, 
                        consistent with the requirements of 
                        subparagraph (B); and
                            ``(ii) at least 3 of the adulthood 
                        preparation subjects described in subparagraph 
                        (C).
                    ``(B) Requirements.--The requirements of this 
                subparagraph are the following:
                            ``(i) The program replicates evidence-based 
                        effective programs or substantially 
                        incorporates elements of effective programs 
                        that have been proven on the basis of rigorous 
                        scientific research to change behavior, which 
                        means delaying sexual activity, increasing 
                        condom or contraceptive use for sexually active 
                        youth, or reducing pregnancy among youth.
                            ``(ii) The program is medically-accurate 
                        and complete.
                            ``(iii) The program includes activities to 
                        educate youth who are sexually active regarding 
                        responsible sexual behavior with respect to 
                        both abstinence and the use of contraception.
                            ``(iv) The program places substantial 
                        emphasis on both abstinence and contraception 
                        for the prevention of pregnancy among youth and 
                        sexually transmitted infections.
                            ``(v) The program provides age-appropriate 
                        information and activities.
                            ``(vi) The information and activities 
                        carried out under the program are provided in 
                        the cultural context that is most appropriate 
                        for individuals in the particular population 
                        group to which they are directed.
                    ``(C) Adulthood preparation subjects.--The 
                adulthood preparation subjects described in this 
                subparagraph are the following:
                            ``(i) Healthy relationships, such as 
                        positive self-esteem and relationship dynamics, 
                        friendships, dating, romantic involvement, 
                        marriage, and family interactions.
                            ``(ii) Adolescent development, such as the 
                        development of healthy attitudes and values 
                        about adolescent growth and development, body 
                        image, racial and ethnic diversity, and other 
                        related subjects.
                            ``(iii) Financial literacy.
                            ``(iv) Parent-child communication.
                            ``(v) Educational and career success, such 
                        as developing skills for employment 
                        preparation, job seeking, independent living, 
                        financial self-sufficiency, and workplace 
                        productivity.
                            ``(vi) Healthy life skills, such as goal-
                        setting, decision making, negotiation, 
                        communication and interpersonal skills, and 
                        stress management.
                    ``(D) Faith-based organizations.--A faith-based 
                entity carrying out a program funded in whole or in 
                part with funds made available under this section 
                through a State allotment or a grant shall agree that 
                information, activities, and services are carried out 
                with funds made available to the entity from the 
                allotment consistent with the requirements of section 
                1955 of the Public Health Service Act relating to a 
                grant award to nongovernmental entities.
    ``(c) Reservations of Funds.--
            ``(1) Grants to implement innovative strategies.--From the 
        amount appropriated under subsection (f) for the fiscal year, 
        the Secretary shall reserve $10,000,000 of such amount for 
        purposes of awarding grants to entities to implement innovative 
        youth pregnancy prevention strategies and target services to 
        high-risk, vulnerable, and culturally under-represented youth 
        populations, including youth in foster care, homeless youth, 
        youth with HIV/AIDS, pregnant women who are under 21 years of 
        age and their partners, mothers who are under 21 years of age 
        and their partners, and youth residing in areas with high birth 
        rates for youth. An entity awarded a grant under this paragraph 
        shall agree to participate in a rigorous Federal evaluation of 
        the activities carried out with grant funds.
            ``(2) Other reservations.--From the amount appropriated 
        under subsection (f) for the fiscal year that remains after the 
        application of paragraph (1), the Secretary shall reserve the 
        following amounts:
                    ``(A) Grants for indian tribes or tribal 
                organizations.--The Secretary shall reserve 5 percent 
                of such remainder for purposes of awarding grants to 
                Indian tribes and tribal organizations in such manner, 
                and subject to such requirements, as the Secretary, in 
                consultation with Indian tribes and tribal 
                organizations, determines appropriate.
                    ``(B) Secretarial responsibilities.--The Secretary 
                shall reserve 10 percent of such remainder for 
                expenditures by the Secretary for the following:
                            ``(i) To award a grant to establish and 
                        operate a national teen pregnancy prevention 
                        resource center consistent with subparagraph 
                        (C).
                            ``(ii) To conduct research, training, and 
                        technical assistance with respect to the 
                        programs and activities carried out with funds 
                        made available through allotments or grants 
                        made under this section.
                            ``(iii) To evaluate the programs and 
                        activities carried out with funds made 
                        available through such allotments and grants.
                    ``(C) National teen pregnancy prevention resource 
                center.--
                            ``(i) In general.--The Secretary shall 
                        award a grant to a nationally recognized, 
                        nonpartisan, nonprofit organization that meets 
                        the requirements described in clause (ii) to 
                        establish and operate a national teen pregnancy 
                        prevention resource center (in this 
                        subparagraph referred to as the `Resource 
                        Center') to carry out the purpose and 
                        activities described in clause (iii).
                            ``(ii) Requirements.--The requirements 
                        described in this clause are the following:
                                    ``(I) The organization has 
                                demonstrated experience working with 
                                and providing assistance to a broad 
                                range of individuals and entities to 
                                reduce teen pregnancy.
                                    ``(II) The organization is 
                                research-based and has comprehensive 
                                knowledge and data about teen pregnancy 
                                prevention strategies.
                            ``(iii) Purpose and activities.--The 
                        Resource Center shall provide information and 
                        technical assistance to public and private 
                        entities seeking to reduce teen pregnancy rates 
                        through activities that include the following:
                                    ``(I) Synthesizing and 
                                disseminating research and information 
                                regarding effective and promising 
                                practices.
                                    ``(II) Developing and providing 
                                information on how to identify, select, 
                                and implement effective programs.
                                    ``(III) Linking organizations to 
                                existing resources, experts, and peers.
                                    ``(IV) Providing consultation and 
                                resources on a broad array of 
                                strategies and messages, including 
                                messages that focus on abstinence, 
                                contraception, responsible behavior and 
                                choices, family communication, 
                                relationships, and values.
                            ``(iv) Collaboration with other 
                        organizations.--The organization operating the 
                        Resource Center shall collaborate with other 
                        entities that have expertise in the prevention 
                        of HIV and sexually transmitted infections, 
                        healthy relationships, financial literacy, and 
                        other topics addressed through the personal 
                        responsibility for adulthood educational 
                        programs to develop resources and materials, 
                        provide technical assistance to States, Indian 
                        tribes, and communities, and undertake other 
                        activities as necessary.
    ``(d) Administration.--
            ``(1) In general.--The Secretary shall administer this 
        section through the Assistant Secretary for the Administration 
        for Children and Families within the Department of Health and 
        Human Services.
            ``(2) Application of other provisions of title.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the other provisions of this title 
                shall not apply to allotments or grants made under this 
                section.
                    ``(B) Exceptions.--The following provisions of this 
                title shall apply to allotments and grants made under 
                this section to the same extent and in the same manner 
                as such provisions apply to allotments made under 
                section 502(c):
                            ``(i) Section 504(b)(6) (relating to 
                        prohibition on payments to excluded individuals 
                        and entities).
                            ``(ii) Section 504(c) (relating to the use 
                        of funds for the purchase of technical 
                        assistance).
                            ``(iii) Section 504(d) (relating to a 
                        limitation on administrative expenditures).
                            ``(iv) Section 506 (relating to reports and 
                        audits), but only to the extent determined by 
                        the Secretary to be appropriate for grants made 
                        under this section.
                            ``(v) Section 507 (relating to penalties 
                        for false statements).
                            ``(vi) Section 508 (relating to 
                        nondiscrimination).
    ``(e) Definitions.--In this section:
            ``(1) Age-appropriate.--The term `age-appropriate', with 
        respect to the information in pregnancy prevention, means 
        topics, messages, and teaching methods suitable to particular 
        ages or age groups of children and adolescents, based on 
        developing cognitive, emotional, and behavioral capacity 
        typical for the age or age group.
            ``(2) Medically accurate and complete.--The term `medically 
        accurate and complete' means verified or supported by the 
        weight of research conducted in compliance with accepted 
        scientific methods and--
                    ``(A) published in peer-reviewed journals, where 
                applicable; or
                    ``(B) comprising information that leading 
                professional organizations and agencies with relevant 
                expertise in the field recognize as accurate, 
                objective, and complete.
            ``(3) Indian tribes; tribal organizations.--The terms 
        `Indian tribe' and `Tribal organization' have the meanings 
        given such terms in section 4 of the Indian Health Care 
        Improvement Act (25 U.S.C. 1603)).
            ``(4) Youth.--The term `youth' means an individual who has 
        attained age 10 but has not attained age 20.
    ``(f) Appropriation.--For the purpose of carrying out this section, 
there is appropriated, out of any money in the Treasury not otherwise 
appropriated, $75,000,000 for each of fiscal years 2010 through 2014. 
Amounts appropriated under this subsection shall remain available until 
expended.''.

SEC. 1804. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION.

    Section 510 of the Social Security Act (42 U.S.C. 710) is amended--
            (1) in subsection (a), by striking ``fiscal year 1998 and 
        each subsequent fiscal year'' and inserting ``each of fiscal 
        years 2010 through 2014''; and
            (2) in subsection (d)--
                    (A) in the first sentence, by striking ``1998 
                through 2003'' and inserting ``2010 through 2014''; and
                    (B) in the second sentence, by inserting ``(except 
                that such appropriation shall be made on the date of 
                enactment of the America's Healthy Future Act of 2009 
                in the case of fiscal year 2010)'' before the period.

    Subtitle J--Programs of Health Promotion and Disease Prevention

SEC. 1901. PROGRAMS OF HEALTH PROMOTION AND DISEASE PREVENTION.

    (a) Internal Revenue Code of 1986.--Section 9802 of the Internal 
Revenue Code of 1986 is amended--
            (1) by redesignating the second subsection (f) as 
        subsection (g); and
            (2) by adding at the end the following:
    ``(h) Programs of Health Promotion and Disease Prevention.--
            ``(1) Applicability.--The following shall apply with 
        respect to a program of health promotion or disease prevention 
        for purposes of subsection (b)(2)(B). Such programs shall be 
        referred to as `wellness programs'.
            ``(2) Definition and General Rule.--
                    ``(A) Definition.--For purposes of this subsection, 
                a wellness program is any program designed to promote 
                health or prevent disease, including a program designed 
                to encourage individuals to adopt healthy behaviors.
                    ``(B) General rule.--For purposes of subsections 
                (a)(2) and (b)(2) (which provide exceptions to the 
                general prohibitions against discrimination based on a 
                health factor for group health plan provisions that 
                vary benefits (including cost-sharing mechanisms) or 
                the premium or contribution for similarly situated 
                individuals in connection with a wellness program that 
                satisfies the requirements of this subsection), if none 
                of the conditions for obtaining a reward under a 
                wellness program are based on an individual satisfying 
                a standard that is related to a health factor, under 
                this subsection, such wellness program does not violate 
                this section if participation in the program is made 
                available to all similarly situated individuals. If any 
                of the conditions for obtaining a reward under such a 
                wellness program is based on an individual satisfying a 
                standard that is related to a health factor, the 
                wellness program shall not violate this section if the 
                requirements of paragraph (4) of this section are 
                satisfied.
            ``(3) Wellness Programs Not Subject to Requirements.--If 
        none of the conditions for obtaining a reward under a wellness 
        program are based on an individual satisfying a standard that 
        is related to a health factor (or if a wellness program does 
        not provide a reward), the wellness program shall not violate 
        this section, if participation in the program is made available 
        to all similarly situated individuals. Such programs need not 
        satisfy the requirements of paragraph (4), if participation in 
        the program is made available to all similarly situated 
        individuals. Wellness programs described in this paragraph 
        include the following:
                    ``(A) A program that reimburses all or part of the 
                cost for memberships in a fitness center.
                    ``(B) A diagnostic testing program that provides a 
                reward for participation and does not base any part of 
                the reward on outcomes.
                    ``(C) A program that encourages preventive care 
                through the waiver of the copayment or deductible 
                requirement under a group health plan for the costs of, 
                for example, prenatal care or well-baby visits.
                    ``(D) A program that reimburses employees for the 
                costs of smoking cessation programs without regard to 
                whether the employee quits smoking.
                    ``(E) A program that provides a reward to employees 
                for attending a monthly health education seminar.
            ``(4) Wellness Programs Subject to Requirements.--If any of 
        the conditions for obtaining a reward under a wellness program 
        is based on an individual satisfying a standard that is related 
        to a health factor, the wellness program shall not violate this 
        section if the requirements of this paragraph are satisfied.
                    ``(A) The reward for the wellness program, coupled 
                with the reward for other wellness programs with 
                respect to the plan that require satisfaction of a 
                standard related to a health factor, shall not exceed 
                30 percent of the cost of employee-only coverage under 
                the plan. However, if, in addition to employees, any 
                class of dependents (such as spouses or spouses and 
                dependent children) may participate in the wellness 
                program, the reward shall not exceed 30 percent of the 
                cost of the coverage in which an employee and any 
                dependents are enrolled. For purposes of this 
                paragraph, the cost of coverage shall be determined 
                based on the total amount of employer and employee 
                contributions for the benefit package under which the 
                employee is (or the employee and any dependents are) 
                receiving coverage. A reward may be in the form of a 
                discount or rebate of a premium or contribution, a 
                waiver of all or part of a cost-sharing mechanism (such 
                as deductibles, copayments, or coinsurance), the 
                absence of a surcharge, or the value of a benefit that 
                would otherwise not be provided under the plan. The 
                Secretaries of Labor, Health and Human Services, and 
                the Treasury may increase the reward available under 
                this subparagraph to up to 50 percent of the cost of 
                coverage under the plan if such Secretaries determine 
                that such an increase is appropriate.
                    ``(B) The wellness program shall be reasonably 
                designed to promote health or prevent disease. A 
                program satisfies this subparagraph if it has a 
                reasonable chance of improving the health of or 
                preventing disease in participating individuals and it 
                is not overly burdensome, is not a subterfuge for 
                discriminating based on a health factor, and is not 
                highly suspect in the method chosen to promote health 
                or prevent disease. At least once per year, each plan 
                or issuer offering a wellness program shall evaluate 
                the reasonableness of such program.
                    ``(C) The program shall give individuals eligible 
                for the program the opportunity to qualify for the 
                reward under the program at least once per year.
                    ``(D)(i) The reward under the program shall be 
                available to all similarly situated individuals.
                    ``(ii) For purposes of clause (i), a reward is not 
                available to all similarly situated individuals for a 
                period unless the program allows--
                            ``(I) a reasonable alternative standard (or 
                        waiver of the otherwise applicable standard) 
                        for obtaining the reward for any individual for 
                        whom, for that period, it is unreasonably 
                        difficult due to a medical condition to satisfy 
                        the otherwise applicable standard; and
                            ``(II) a reasonable alternative standard 
                        (or waiver of the otherwise applicable 
                        standard) for obtaining the reward for any 
                        individual for whom, for that period, it is 
                        medically inadvisable to attempt to satisfy the 
                        otherwise applicable standard.
                    ``(iii) A plan or issuer may seek verification, 
                such as a statement from an individual's physician, 
                that a health factor makes it unreasonably difficult or 
                medically inadvisable for the individual to satisfy or 
                attempt to satisfy the otherwise applicable standard.
                    ``(E)(i) The plan or issuer shall disclose in all 
                plan materials describing the terms of the program the 
                availability of a reasonable alternative standard (or 
                the possibility of waiver of the otherwise applicable 
                standard) required under subparagraph (D). If plan 
                materials merely mention that a program is available, 
                without describing its terms, such disclosure is not 
                required.
                    ``(ii) The following language, or similar language, 
                may be used to satisfy the requirement of this 
                subparagraph: `If it is unreasonably difficult due to a 
                medical condition for you to achieve the standards for 
                the reward under this program, or if it is medically 
                inadvisable for you to attempt to achieve the standards 
                for the reward under this program, call us at [insert 
                telephone number] and we will work with you to develop 
                another way to qualify for the reward.'.
    ``(5) Regulations.--The Secretaries of Labor, Health and Human 
Services, and the Treasury may promulgate regulations, as appropriate, 
to carry out this subsection.
    ``(6) Effective Date.--This subsection shall take effect on the 
date of enactment of the America's Healthy Future Act of 2009.
    ``(7) Existing Wellness Programs.--During the period of time 
between the date of enactment of the America's Healthy Future Act of 
2009 and the date on which the Secretaries of Labor, Health and Human 
Services, and the Treasury establish regulations to effectuate this 
subsection, a wellness program that was established prior to the date 
of enactment of the America's Healthy Future Act of 2009 may continue 
to operate in accordance with the requirements in effect on the day 
before such date of enactment.''.
    (b) PHSA Group Market.--Section 2702(b) of the Public Health 
Service Act (42 U.S.C. 300gg-1(b)) is amended by adding at the end the 
following:
            ``(4) Programs of health promotion and disease 
        prevention.--The provisions of section 9802(h) of the Internal 
        Revenue Code of 1986 shall apply to programs of health 
        promotion and disease prevention offered through a group health 
        plan or a health insurance issuer offering group health 
        insurance coverage.''.
    (c) ERISA.--Section 702(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1182(b)) is amended by adding at the 
end the following:
            ``(4) Programs of health promotion and disease 
        prevention.--The provisions of section 9802(h) of the Internal 
        Revenue Code of 1986 shall apply to programs of health 
        promotion and disease prevention offered through a group health 
        plan or a health insurance issuer offering group health 
        insurance coverage.''.
    (d) Application of Wellness Programs Provisions to Carriers 
Providing Federal Employee Health Benefits Plans.--
            (1) In general.--Notwithstanding section 8906 of title 5, 
        United States Code (including subsections (b)(1) and (b)(2) of 
        such section), subsections (a), (b), and (c) of this section, 
        including the amendments made by those subsections, (relating 
        to wellness programs) shall apply to carriers entering into 
        contracts under section 8902 of title 5, United States Code.
            (2) Proposals.--Carriers may submit separate proposals 
        relating to voluntary wellness program offerings as part of the 
        annual call for benefit and rate proposals to the Office of 
        Personnel Management.
            (3) Effective date.--This subsection shall take effect on 
        the date of enactment of this Act and shall apply to contracts 
        entered into under section 8902 of title 5, United States Code, 
        that take effect with respect to calendar years that begin more 
        than 1 year after that date.
    (e) State Demonstration Project.--Subpart 1 of part B of title 
XXVII of the Public Health Service Act (42 U.S.C. 300gg-41 et seq.) is 
amended by adding at the end the following:

``SEC. 2746. WELLNESS PROGRAM DEMONSTRATION PROJECT.

    ``(a) In General.--Not later than July 1, 2014, the Secretary of 
Health and Human Services, in consultation with the Secretary of the 
Treasury, shall establish a 10-State demonstration project under which 
participating States shall apply the provisions of 9802(h) of the 
Internal Revenue Code of 1986 to programs of health promotion offered 
by a health insurance issuer that offers health insurance coverage in 
the individual market in such State.
    ``(b) Expansion of Demonstration Project.--If the Secretary of 
Health and Human Services, in consultation with the Secretary of the 
Treasury, determines that the demonstration project described in 
subsection (a) is effective, such Secretaries may, beginning on July 1, 
2017 expand such demonstration project to include additional 
participating States.
    ``(c) Requirements.--States that participate in the demonstration 
project under this section shall--
            ``(1) ensure that requirements of consumer protection are 
        met in programs of health promotion in the individual market;
            ``(2) require verification from health insurance issuers 
        that offer health insurance coverage in the individual market 
        of such State that premium discounts--
                    ``(A) do not create undue burdens for individuals 
                insured in the individual market;
                    ``(B) do not lead to cost shifting; and
                    ``(C) are not a subterfuge for discrimination; and
            ``(3) ensure that consumer data is protected in accordance 
        with the requirements of section 264(c) of the Health Insurance 
        Portability and Accountability Act of 1996 (42 U.S.C. 1320d-2 
        note).
    ``(d) Existing Programs of Health Promotion or Disease 
Prevention.--Nothing in this section shall preempt any State law 
related to programs of health promotion offered by a health insurance 
issuer that offers health insurance coverage in the individual market 
in such State that was established or adopted by State law on or after 
the date of enactment of this Act.
    ``(e) Regulations.--The Secretaries of Health and Human Services 
and the Treasury may promulgate regulations, as appropriate, to carry 
out this section.''.
    (f) Report.--
            (1) In general.--Not later than 3 years after the date of 
        enactment of this Act, the Secretary of Health and Human 
        Services, in consultation with the Secretary of the Treasury 
        and the Secretary of Labor, shall submit a report to the 
        appropriate committees of Congress concerning--
                    (A) the effectiveness of wellness programs (as 
                defined in section 9802(h)(2) of the Internal Revenue 
                Code of 1986, as added by subsection (a)) in promoting 
                health and preventing disease;
                    (B) the impact of such wellness programs on the 
                access to care and affordability of coverage for 
                participants and non-participants of such programs;
                    (C) the impact of premium-based and cost-sharing 
                incentives on participant behavior and the role of such 
                programs in changing behavior; and
                    (D) the effectiveness of different types of 
                rewards.
            (2) Data collection.--In preparing the report described in 
        paragraph (1), the Secretaries shall gather relevant 
        information from employers who provide employees with access to 
        wellness programs, including State and Federal agencies.

                     Subtitle K--Elder Justice Act

SEC. 1911. SHORT TITLE OF SUBTITLE.

    This subtitle may be cited as the ``Elder Justice Act of 2009''.

SEC. 1912. DEFINITIONS.

    Except as otherwise specifically provided, any term that is defined 
in section 2011 of the Social Security Act (as added by section 
1913(a)) and is used in this subtitle has the meaning given such term 
by such section.

SEC. 1913. ELDER JUSTICE.

    (a) Elder Justice.--
            (1) In general.--Title XX of the Social Security Act (42 
        U.S.C. 1397 et seq.) is amended--
                    (A) in the heading, by inserting ``AND ELDER 
                JUSTICE'' after ``SOCIAL SERVICES'';
                    (B) by inserting before section 2001 the following:

      ``Subtitle A--Block Grants to States for Social Services'';

                and
                    (C) by adding at the end the following:

                      ``Subtitle B--Elder Justice

``SEC. 2011. DEFINITIONS.

    ``In this subtitle:
            ``(1) Abuse.--The term `abuse' means the knowing infliction 
        of physical or psychological harm or the knowing deprivation of 
        goods or services that are necessary to meet essential needs or 
        to avoid physical or psychological harm.
            ``(2) Adult protective services.--The term `adult 
        protective services' means such services provided to adults as 
        the Secretary may specify and includes services such as--
                    ``(A) receiving reports of adult abuse, neglect, or 
                exploitation;
                    ``(B) investigating the reports described in 
                subparagraph (A);
                    ``(C) case planning, monitoring, evaluation, and 
                other case work and services; and
                    ``(D) providing, arranging for, or facilitating the 
                provision of medical, social service, economic, legal, 
                housing, law enforcement, or other protective, 
                emergency, or support services.
            ``(3) Caregiver.--The term `caregiver' means an individual 
        who has the responsibility for the care of an elder, either 
        voluntarily, by contract, by receipt of payment for care, or as 
        a result of the operation of law, and means a family member or 
        other individual who provides (on behalf of such individual or 
        of a public or private agency, organization, or institution) 
        compensated or uncompensated care to an elder who needs 
        supportive services in any setting.
            ``(4) Direct care.--The term `direct care' means care by an 
        employee or contractor who provides assistance or long-term 
        care services to a recipient.
            ``(5) Elder.--The term `elder' means an individual age 60 
        or older.
            ``(6) Elder justice.--The term `elder justice' means--
                    ``(A) from a societal perspective, efforts to--
                            ``(i) prevent, detect, treat, intervene in, 
                        and prosecute elder abuse, neglect, and 
                        exploitation; and
                            ``(ii) protect elders with diminished 
                        capacity while maximizing their autonomy; and
                    ``(B) from an individual perspective, the 
                recognition of an elder's rights, including the right 
                to be free of abuse, neglect, and exploitation.
            ``(7) Eligible entity.--The term `eligible entity' means a 
        State or local government agency, Indian tribe or tribal 
        organization, or any other public or private entity that is 
        engaged in and has expertise in issues relating to elder 
        justice or in a field necessary to promote elder justice 
        efforts.
            ``(8) Exploitation.--The term `exploitation' means the 
        fraudulent or otherwise illegal, unauthorized, or improper act 
        or process of an individual, including a caregiver or 
        fiduciary, that uses the resources of an elder for monetary or 
        personal benefit, profit, or gain, or that results in depriving 
        an elder of rightful access to, or use of, benefits, resources, 
        belongings, or assets.
            ``(9) Fiduciary.--The term `fiduciary'--
                    ``(A) means a person or entity with the legal 
                responsibility--
                            ``(i) to make decisions on behalf of and 
                        for the benefit of another person; and
                            ``(ii) to act in good faith and with 
                        fairness; and
                    ``(B) includes a trustee, a guardian, a 
                conservator, an executor, an agent under a financial 
                power of attorney or health care power of attorney, or 
                a representative payee.
            ``(10) Grant.--The term `grant' includes a contract, 
        cooperative agreement, or other mechanism for providing 
        financial assistance.
            ``(11) Guardianship.--The term `guardianship' means--
                    ``(A) the process by which a State court determines 
                that an adult individual lacks capacity to make 
                decisions about self-care or property, and appoints 
                another individual or entity known as a guardian, as a 
                conservator, or by a similar term, as a surrogate 
                decisionmaker;
                    ``(B) the manner in which the court-appointed 
                surrogate decisionmaker carries out duties to the 
                individual and the court; or
                    ``(C) the manner in which the court exercises 
                oversight of the surrogate decisionmaker.
            ``(12) Indian tribe.--
                    ``(A) In general.--The term `Indian tribe' has the 
                meaning given such term in section 4 of the Indian 
                Self-Determination and Education Assistance Act (25 
                U.S.C. 450b).
                    ``(B) Inclusion of pueblo and rancheria.--The term 
                `Indian tribe' includes any Pueblo or Rancheria.
            ``(13) Law enforcement.--The term `law enforcement' means 
        the full range of potential responders to elder abuse, neglect, 
        and exploitation including--
                    ``(A) police, sheriffs, detectives, public safety 
                officers, and corrections personnel;
                    ``(B) prosecutors;
                    ``(C) medical examiners;
                    ``(D) investigators; and
                    ``(E) coroners.
            ``(14) Long-term care.--
                    ``(A) In general.--The term `long-term care' means 
                supportive and health services specified by the 
                Secretary for individuals who need assistance because 
                the individuals have a loss of capacity for self-care 
                due to illness, disability, or vulnerability.
                    ``(B) Loss of capacity for self-care.--For purposes 
                of subparagraph (A), the term `loss of capacity for 
                self-care' means an inability to engage in 1 or more 
                activities of daily living, including eating, dressing, 
                bathing, management of one's financial affairs, and 
                other activities the Secretary determines appropriate.
            ``(15) Long-term care facility.--The term `long-term care 
        facility' means a residential care provider that arranges for, 
        or directly provides, long-term care.
            ``(16) Neglect.--The term `neglect' means--
                    ``(A) the failure of a caregiver or fiduciary to 
                provide the goods or services that are necessary to 
                maintain the health or safety of an elder; or
                    ``(B) self-neglect.
            ``(17) Nursing facility.--
                    ``(A) In general.--The term `nursing facility' has 
                the meaning given such term under section 1919(a).
                    ``(B) Inclusion of skilled nursing facility.--The 
                term `nursing facility' includes a skilled nursing 
                facility (as defined in section 1819(a)).
            ``(18) Self-neglect.--The term `self-neglect' means an 
        adult's inability, due to physical or mental impairment or 
        diminished capacity, to perform essential self-care tasks 
        including--
                    ``(A) obtaining essential food, clothing, shelter, 
                and medical care;
                    ``(B) obtaining goods and services necessary to 
                maintain physical health, mental health, or general 
                safety; or
                    ``(C) managing one's own financial affairs.
            ``(19) Serious bodily injury.--
                    ``(A) In general.--The term `serious bodily injury' 
                means an injury--
                            ``(i) involving extreme physical pain;
                            ``(ii) involving substantial risk of death;
                            ``(iii) involving protracted loss or 
                        impairment of the function of a bodily member, 
                        organ, or mental faculty; or
                            ``(iv) requiring medical intervention such 
                        as surgery, hospitalization, or physical 
                        rehabilitation.
                    ``(B) Criminal sexual abuse.--Serious bodily injury 
                shall be considered to have occurred if the conduct 
                causing the injury is conduct described in section 2241 
                (relating to aggravated sexual abuse) or 2242 (relating 
                to sexual abuse) of title 18, United States Code, or 
                any similar offense under State law.
            ``(20) Social.--The term `social', when used with respect 
        to a service, includes adult protective services.
            ``(21) State legal assistance developer.--The term `State 
        legal assistance developer' means an individual described in 
        section 731 of the Older Americans Act of 1965.
            ``(22) State long-term care ombudsman.--The term `State 
        Long-Term Care Ombudsman' means the State Long-Term Care 
        Ombudsman described in section 712(a)(2) of the Older Americans 
        Act of 1965.

``SEC. 2012. GENERAL PROVISIONS.

    ``(a) Protection of Privacy.--In pursuing activities under this 
subtitle, the Secretary shall ensure the protection of individual 
health privacy consistent with the regulations promulgated under 
section 264(c) of the Health Insurance Portability and Accountability 
Act of 1996 and applicable State and local privacy regulations.
    ``(b) Rule of Construction.--Nothing in this subtitle shall be 
construed to interfere with or abridge an elder's right to practice his 
or her religion through reliance on prayer alone for healing when this 
choice--
            ``(1) is contemporaneously expressed, either orally or in 
        writing, with respect to a specific illness or injury which the 
        elder has at the time of the decision by an elder who is 
        competent at the time of the decision;
            ``(2) is previously set forth in a living will, health care 
        proxy, or other advance directive document that is validly 
        executed and applied under State law; or
            ``(3) may be unambiguously deduced from the elder's life 
        history.

    ``PART I--NATIONAL COORDINATION OF ELDER JUSTICE ACTIVITIES AND 
                                RESEARCH

 ``Subpart A--Elder Justice Coordinating Council and Advisory Board on 
                 Elder Abuse, Neglect, and Exploitation

``SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL.

    ``(a) Establishment.--There is established within the Office of the 
Secretary an Elder Justice Coordinating Council (in this section 
referred to as the `Council').
    ``(b) Membership.--
            ``(1) In general.--The Council shall be composed of the 
        following members:
                    ``(A) The Secretary (or the Secretary's designee).
                    ``(B) The Attorney General (or the Attorney 
                General's designee).
                    ``(C) The head of each Federal department or agency 
                or other governmental entity identified by the Chair 
                referred to in subsection (d) as having 
                responsibilities, or administering programs, relating 
                to elder abuse, neglect, and exploitation.
            ``(2) Requirement.--Each member of the Council shall be an 
        officer or employee of the Federal Government.
    ``(c) Vacancies.--Any vacancy in the Council shall not affect its 
powers, but shall be filled in the same manner as the original 
appointment was made.
    ``(d) Chair.--The member described in subsection (b)(1)(A) shall be 
Chair of the Council.
    ``(e) Meetings.--The Council shall meet at least 2 times per year, 
as determined by the Chair.
    ``(f) Duties.--
            ``(1) In general.--The Council shall make recommendations 
        to the Secretary for the coordination of activities of the 
        Department of Health and Human Services, the Department of 
        Justice, and other relevant Federal, State, local, and private 
        agencies and entities, relating to elder abuse, neglect, and 
        exploitation and other crimes against elders.
            ``(2) Report.--Not later than the date that is 2 years 
        after the date of enactment of the Elder Justice Act of 2009 
        and every 2 years thereafter, the Council shall submit to the 
        Committee on Finance of the Senate and the Committee on Ways 
        and Means and the Committee on Energy and Commerce of the House 
        of Representatives a report that--
                    ``(A) describes the activities and accomplishments 
                of, and challenges faced by--
                            ``(i) the Council; and
                            ``(ii) the entities represented on the 
                        Council; and
                    ``(B) makes such recommendations for legislation, 
                model laws, or other action as the Council determines 
                to be appropriate.
    ``(g) Powers of the Council.--
            ``(1) Information from federal agencies.--Subject to the 
        requirements of section 2012(a), the Council may secure 
        directly from any Federal department or agency such information 
        as the Council considers necessary to carry out this section. 
        Upon request of the Chair of the Council, the head of such 
        department or agency shall furnish such information to the 
        Council.
            ``(2) Postal services.--The Council may use the United 
        States mails in the same manner and under the same conditions 
        as other departments and agencies of the Federal Government.
    ``(h) Travel Expenses.--The members of the Council shall not 
receive compensation for the performance of services for the Council. 
The members shall be allowed travel expenses, including per diem in 
lieu of subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States Code, while 
away from their homes or regular places of business in the performance 
of services for the Council. Notwithstanding section 1342 of title 31, 
United States Code, the Secretary may accept the voluntary and 
uncompensated services of the members of the Council.
    ``(i) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Council without reimbursement, and such 
detail shall be without interruption or loss of civil service status or 
privilege.
    ``(j) Status as Permanent Council.--Section 14 of the Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

``SEC. 2022. ADVISORY BOARD ON ELDER ABUSE, NEGLECT, AND EXPLOITATION.

    ``(a) Establishment.--There is established a board to be known as 
the `Advisory Board on Elder Abuse, Neglect, and Exploitation' (in this 
section referred to as the `Advisory Board') to create short- and long-
term multidisciplinary strategic plans for the development of the field 
of elder justice and to make recommendations to the Elder Justice 
Coordinating Council established under section 2021.
    ``(b) Composition.--The Advisory Board shall be composed of 27 
members appointed by the Secretary from among members of the general 
public who are individuals with experience and expertise in elder 
abuse, neglect, and exploitation prevention, detection, treatment, 
intervention, or prosecution.
    ``(c) Solicitation of Nominations.--The Secretary shall publish a 
notice in the Federal Register soliciting nominations for the 
appointment of members of the Advisory Board under subsection (b).
    ``(d) Terms.--
            ``(1) In general.--Each member of the Advisory Board shall 
        be appointed for a term of 3 years, except that, of the members 
        first appointed--
                    ``(A) 9 shall be appointed for a term of 3 years;
                    ``(B) 9 shall be appointed for a term of 2 years; 
                and
                    ``(C) 9 shall be appointed for a term of 1 year.
            ``(2) Vacancies.--
                    ``(A) In general.--Any vacancy on the Advisory 
                Board shall not affect its powers, but shall be filled 
                in the same manner as the original appointment was 
                made.
                    ``(B) Filling unexpired term.--An individual chosen 
                to fill a vacancy shall be appointed for the unexpired 
                term of the member replaced.
            ``(3) Expiration of terms.--The term of any member shall 
        not expire before the date on which the member's successor 
        takes office.
    ``(e) Election of Officers.--The Advisory Board shall elect a Chair 
and Vice Chair from among its members. The Advisory Board shall elect 
its initial Chair and Vice Chair at its initial meeting.
    ``(f) Duties.--
            ``(1) Enhance communication on promoting quality of, and 
        preventing abuse, neglect, and exploitation in, long-term 
        care.--The Advisory Board shall develop collaborative and 
        innovative approaches to improve the quality of, including 
        preventing abuse, neglect, and exploitation in, long-term care.
            ``(2) Collaborative efforts to develop consensus around the 
        management of certain quality-related factors.--
                    ``(A) In general.--The Advisory Board shall 
                establish multidisciplinary panels to address, and 
                develop consensus on, subjects relating to improving 
                the quality of long-term care. At least 1 such panel 
                shall address, and develop consensus on, methods for 
                managing resident-to-resident abuse in long-term care.
                    ``(B) Activities conducted.--The multidisciplinary 
                panels established under subparagraph (A) shall examine 
                relevant research and data, identify best practices 
                with respect to the subject of the panel, determine the 
                best way to carry out those best practices in a 
                practical and feasible manner, and determine an 
                effective manner of distributing information on such 
                subject.
            ``(3) Report.--Not later than the date that is 18 months 
        after the date of enactment of the Elder Justice Act of 2009, 
        and annually thereafter, the Advisory Board shall prepare and 
        submit to the Elder Justice Coordinating Council, the Committee 
        on Finance of the Senate, and the Committee on Ways and Means 
        and the Committee on Energy and Commerce of the House of 
        Representatives a report containing--
                    ``(A) information on the status of Federal, State, 
                and local public and private elder justice activities;
                    ``(B) recommendations (including recommended 
                priorities) regarding--
                            ``(i) elder justice programs, research, 
                        training, services, practice, enforcement, and 
                        coordination;
                            ``(ii) coordination between entities 
                        pursuing elder justice efforts and those 
                        involved in related areas that may inform or 
                        overlap with elder justice efforts, such as 
                        activities to combat violence against women and 
                        child abuse and neglect; and
                            ``(iii) activities relating to adult 
                        fiduciary systems, including guardianship and 
                        other fiduciary arrangements;
                    ``(C) recommendations for specific modifications 
                needed in Federal and State laws (including 
                regulations) or for programs, research, and training to 
                enhance prevention, detection, and treatment (including 
                diagnosis) of, intervention in (including investigation 
                of), and prosecution of elder abuse, neglect, and 
                exploitation;
                    ``(D) recommendations on methods for the most 
                effective coordinated national data collection with 
                respect to elder justice, and elder abuse, neglect, and 
                exploitation; and
                    ``(E) recommendations for a multidisciplinary 
                strategic plan to guide the effective and efficient 
                development of the field of elder justice.
    ``(g) Powers of the Advisory Board.--
            ``(1) Information from federal agencies.--Subject to the 
        requirements of section 2012(a), the Advisory Board may secure 
        directly from any Federal department or agency such information 
        as the Advisory Board considers necessary to carry out this 
        section. Upon request of the Chair of the Advisory Board, the 
        head of such department or agency shall furnish such 
        information to the Advisory Board.
            ``(2) Sharing of data and reports.--The Advisory Board may 
        request from any entity pursuing elder justice activities under 
        the Elder Justice Act of 2009 or an amendment made by that Act, 
        any data, reports, or recommendations generated in connection 
        with such activities.
            ``(3) Postal services.--The Advisory Board may use the 
        United States mails in the same manner and under the same 
        conditions as other departments and agencies of the Federal 
        Government.
    ``(h) Travel Expenses.--The members of the Advisory Board shall not 
receive compensation for the performance of services for the Advisory 
Board. The members shall be allowed travel expenses for up to 4 
meetings per year, including per diem in lieu of subsistence, at rates 
authorized for employees of agencies under subchapter I of chapter 57 
of title 5, United States Code, while away from their homes or regular 
places of business in the performance of services for the Advisory 
Board. Notwithstanding section 1342 of title 31, United States Code, 
the Secretary may accept the voluntary and uncompensated services of 
the members of the Advisory Board.
    ``(i) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Advisory Board without reimbursement, 
and such detail shall be without interruption or loss of civil service 
status or privilege.
    ``(j) Status as Permanent Advisory Committee.--Section 14 of the 
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
advisory board.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

``SEC. 2023. RESEARCH PROTECTIONS.

    ``(a) Guidelines.--The Secretary shall promulgate guidelines to 
assist researchers working in the area of elder abuse, neglect, and 
exploitation, with issues relating to human subject protections.
    ``(b) Definition of Legally Authorized Representative for 
Application of Regulations.--For purposes of the application of subpart 
A of part 46 of title 45, Code of Federal Regulations, to research 
conducted under this subpart, the term `legally authorized 
representative' means, unless otherwise provided by law, the individual 
or judicial or other body authorized under the applicable law to 
consent to medical treatment on behalf of another person.

``SEC. 2024. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this 
subpart--
            ``(1) for fiscal year 2011, $6,500,000; and
            ``(2) for each of fiscal years 2012 through 2014, 
        $7,000,000.

  ``Subpart B--Elder Abuse, Neglect, and Exploitation Forensic Centers

``SEC. 2031. ESTABLISHMENT AND SUPPORT OF ELDER ABUSE, NEGLECT, AND 
              EXPLOITATION FORENSIC CENTERS.

    ``(a) In General.--The Secretary, in consultation with the Attorney 
General, shall make grants to eligible entities to establish and 
operate stationary and mobile forensic centers, to develop forensic 
expertise regarding, and provide services relating to, elder abuse, 
neglect, and exploitation.
    ``(b) Stationary Forensic Centers.--The Secretary shall make 4 of 
the grants described in subsection (a) to institutions of higher 
education with demonstrated expertise in forensics or commitment to 
preventing or treating elder abuse, neglect, or exploitation, to 
establish and operate stationary forensic centers.
    ``(c) Mobile Centers.--The Secretary shall make 6 of the grants 
described in subsection (a) to appropriate entities to establish and 
operate mobile forensic centers.
    ``(d) Authorized Activities.--
            ``(1) Development of forensic markers and methodologies.--
        An eligible entity that receives a grant under this section 
        shall use funds made available through the grant to assist in 
        determining whether abuse, neglect, or exploitation occurred 
        and whether a crime was committed and to conduct research to 
        describe and disseminate information on--
                    ``(A) forensic markers that indicate a case in 
                which elder abuse, neglect, or exploitation may have 
                occurred; and
                    ``(B) methodologies for determining, in such a 
                case, when and how health care, emergency service, 
                social and protective services, and legal service 
                providers should intervene and when the providers 
                should report the case to law enforcement authorities.
            ``(2) Development of forensic expertise.--An eligible 
        entity that receives a grant under this section shall use funds 
        made available through the grant to develop forensic expertise 
        regarding elder abuse, neglect, and exploitation in order to 
        provide medical and forensic evaluation, therapeutic 
        intervention, victim support and advocacy, case review, and 
        case tracking.
            ``(3) Collection of evidence.--The Secretary, in 
        coordination with the Attorney General, shall use data made 
        available by grant recipients under this section to develop the 
        capacity of geriatric health care professionals and law 
        enforcement to collect forensic evidence, including collecting 
        forensic evidence relating to a potential determination of 
        elder abuse, neglect, or exploitation.
    ``(e) Application.--To be eligible to receive a grant under this 
section, an entity shall submit an application to the Secretary at such 
time, in such manner, and containing such information as the Secretary 
may require.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) for fiscal year 2011, $4,000,000;
            ``(2) for fiscal year 2012, $6,000,000; and
            ``(3) for each of fiscal years 2013 and 2014, $8,000,000.

              ``PART II--PROGRAMS TO PROMOTE ELDER JUSTICE

``SEC. 2041. ENHANCEMENT OF LONG-TERM CARE.

    ``(a) Grants and Incentives for Long-Term Care Staffing.--
            ``(1) In general.--The Secretary shall carry out 
        activities, including activities described in paragraphs (2) 
        and (3), to provide incentives for individuals to train for, 
        seek, and maintain employment providing direct care in long-
        term care.
            ``(2) Specific programs to enhance training, recruitment, 
        and retention of staff.--
                    ``(A) Coordination with secretary of labor to 
                recruit and train long-term care staff.--The Secretary 
                shall coordinate activities under this subsection with 
                the Secretary of Labor in order to provide incentives 
                for individuals to train for and seek employment 
                providing direct care in long-term care.
                    ``(B) Career ladders and wage or benefit increases 
                to increase staffing in long-term care.--
                            ``(i) In general.--The Secretary shall make 
                        grants to eligible entities to carry out 
                        programs through which the entities--
                                    ``(I) offer, to employees who 
                                provide direct care to residents of an 
                                eligible entity or individuals 
                                receiving community-based long-term 
                                care from an eligible entity, 
                                continuing training and varying levels 
                                of certification, based on observed 
                                clinical care practices and the amount 
                                of time the employees spend providing 
                                direct care; and
                                    ``(II) provide, or make 
                                arrangements to provide, bonuses or 
                                other increased compensation or 
                                benefits to employees who achieve 
                                certification under such a program.
                            ``(ii) Application.--To be eligible to 
                        receive a grant under this subparagraph, an 
                        eligible entity shall submit an application to 
                        the Secretary at such time, in such manner, and 
                        containing such information as the Secretary 
                        may require (which may include evidence of 
                        consultation with the State in which the 
                        eligible entity is located with respect to 
                        carrying out activities funded under the 
                        grant).
                            ``(iii) Authority to limit number of 
                        applicants.--Nothing in this subparagraph shall 
                        be construed as prohibiting the Secretary from 
                        limiting the number of applicants for a grant 
                        under this subparagraph.
            ``(3) Specific programs to improve management practices.--
                    ``(A) In general.--The Secretary shall make grants 
                to eligible entities to enable the entities to provide 
                training and technical assistance.
                    ``(B) Authorized activities.--An eligible entity 
                that receives a grant under subparagraph (A) shall use 
                funds made available through the grant to provide 
                training and technical assistance regarding management 
                practices using methods that are demonstrated to 
                promote retention of individuals who provide direct 
                care, such as--
                            ``(i) the establishment of standard human 
                        resource policies that reward high performance, 
                        including policies that provide for improved 
                        wages and benefits on the basis of job reviews;
                            ``(ii) the establishment of motivational 
                        and thoughtful work organization practices;
                            ``(iii) the creation of a workplace culture 
                        that respects and values caregivers and their 
                        needs;
                            ``(iv) the promotion of a workplace culture 
                        that respects the rights of residents of an 
                        eligible entity or individuals receiving 
                        community-based long-term care from an eligible 
                        entity and results in improved care for the 
                        residents or the individuals; and
                            ``(v) the establishment of other programs 
                        that promote the provision of high quality 
                        care, such as a continuing education program 
                        that provides additional hours of training, 
                        including on-the-job training, for employees 
                        who are certified nurse aides.
                    ``(C) Application.--To be eligible to receive a 
                grant under this paragraph, an eligible entity shall 
                submit an application to the Secretary at such time, in 
                such manner, and containing such information as the 
                Secretary may require (which may include evidence of 
                consultation with the State in which the eligible 
                entity is located with respect to carrying out 
                activities funded under the grant).
                    ``(D) Authority to limit number of applicants.--
                Nothing in this paragraph shall be construed as 
                prohibiting the Secretary from limiting the number of 
                applicants for a grant under this paragraph.
            ``(4) Accountability measures.--The Secretary shall develop 
        accountability measures to ensure that the activities conducted 
        using funds made available under this subsection benefit 
        individuals who provide direct care and increase the stability 
        of the long-term care workforce.
            ``(5) Definitions.--In this subsection:
                    ``(A) Community-based long-term care.--The term 
                `community-based long-term care' has the meaning given 
                such term by the Secretary.
                    ``(B) Eligible entity.--The term `eligible entity' 
                means the following:
                            ``(i) A long-term care facility.
                            ``(ii) A community-based long-term care 
                        entity (as defined by the Secretary).
    ``(b) Certified EHR Technology Grant Program.--
            ``(1) Grants authorized.--The Secretary is authorized to 
        make grants to long-term care facilities for the purpose of 
        assisting such entities in offsetting the costs related to 
        purchasing, leasing, developing, and implementing certified EHR 
        technology (as defined in section 1848(o)(4)) designed to 
        improve patient safety and reduce adverse events and health 
        care complications resulting from medication errors.
            ``(2) Use of grant funds.--Funds provided under grants 
        under this subsection may be used for any of the following:
                    ``(A) Purchasing, leasing, and installing computer 
                software and hardware, including handheld computer 
                technologies.
                    ``(B) Making improvements to existing computer 
                software and hardware.
                    ``(C) Making upgrades and other improvements to 
                existing computer software and hardware to enable e-
                prescribing.
                    ``(D) Providing education and training to eligible 
                long-term care facility staff on the use of such 
                technology to implement the electronic transmission of 
                prescription and patient information.
            ``(3) Application.--
                    ``(A) In general.--To be eligible to receive a 
                grant under this subsection, a long-term care facility 
                shall submit an application to the Secretary at such 
                time, in such manner, and containing such information 
                as the Secretary may require (which may include 
                evidence of consultation with the State in which the 
                long-term care facility is located with respect to 
                carrying out activities funded under the grant).
                    ``(B) Authority to limit number of applicants.--
                Nothing in this subsection shall be construed as 
                prohibiting the Secretary from limiting the number of 
                applicants for a grant under this subsection.
            ``(4) Participation in state health exchanges.--A long-term 
        care facility that receives a grant under this subsection 
        shall, where available, participate in activities conducted by 
        a State or a qualified State-designated entity (as defined in 
        section 3013(f) of the Public Health Service Act) under a grant 
        under section 3013 of the Public Health Service Act to 
        coordinate care and for other purposes determined appropriate 
        by the Secretary.
            ``(5) Accountability measures.--The Secretary shall develop 
        accountability measures to ensure that the activities conducted 
        using funds made available under this subsection help improve 
        patient safety and reduce adverse events and health care 
        complications resulting from medication errors.
    ``(c) Adoption of Standards for Transactions Involving Clinical 
Data by Long-Term Care Facilities.--
            ``(1) Standards and compatibility.--The Secretary shall 
        adopt electronic standards for the exchange of clinical data by 
        long-term care facilities, including, where available, 
        standards for messaging and nomenclature. Standards adopted by 
        the Secretary under the preceding sentence shall be compatible 
        with standards established under part C of title XI, standards 
        established under subsections (b)(2)(B)(i) and (e)(4) of 
        section 1860D-4, standards adopted under section 3004 of the 
        Public Health Service Act, and general health information 
        technology standards.
            ``(2) Electronic submission of data to the secretary.--
                    ``(A) In general.--Not later than 10 years after 
                the date of enactment of the Elder Justice Act of 2009, 
                the Secretary shall have procedures in place to accept 
                the optional electronic submission of clinical data by 
                long-term care facilities pursuant to the standards 
                adopted under paragraph (1).
                    ``(B) Rule of construction.--Nothing in this 
                subsection shall be construed to require a long-term 
                care facility to submit clinical data electronically to 
                the Secretary.
            ``(3) Regulations.--The Secretary shall promulgate 
        regulations to carry out this subsection. Such regulations 
        shall require a State, as a condition of the receipt of funds 
        under this part, to conduct such data collection and reporting 
        as the Secretary determines are necessary to satisfy the 
        requirements of this subsection.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) for fiscal year 2011, $20,000,000;
            ``(2) for fiscal year 2012, $17,500,000; and
            ``(3) for each of fiscal years 2013 and 2014, $15,000,000.

``SEC. 2042. ADULT PROTECTIVE SERVICES FUNCTIONS AND GRANT PROGRAMS.

    ``(a) Secretarial Responsibilities.--
            ``(1) In general.--The Secretary shall ensure that the 
        Department of Health and Human Services--
                    ``(A) provides funding authorized by this part to 
                State and local adult protective services offices that 
                investigate reports of the abuse, neglect, and 
                exploitation of elders;
                    ``(B) collects and disseminates data annually 
                relating to the abuse, exploitation, and neglect of 
                elders in coordination with the Department of Justice;
                    ``(C) develops and disseminates information on best 
                practices regarding, and provides training on, carrying 
                out adult protective services;
                    ``(D) conducts research related to the provision of 
                adult protective services; and
                    ``(E) provides technical assistance to States and 
                other entities that provide or fund the provision of 
                adult protective services, including through grants 
                made under subsections (b) and (c).
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        $3,000,000 for fiscal year 2011 and $4,000,000 for each of 
        fiscal years 2012 through 2014.
    ``(b) Grants To Enhance the Provision of Adult Protective 
Services.--
            ``(1) Establishment.--There is established an adult 
        protective services grant program under which the Secretary 
        shall annually award grants to States in the amounts calculated 
        under paragraph (2) for the purposes of enhancing adult 
        protective services provided by States and local units of 
        government.
            ``(2) Amount of payment.--
                    ``(A) In general.--Subject to the availability of 
                appropriations and subparagraphs (B) and (C), the 
                amount paid to a State for a fiscal year under the 
                program under this subsection shall equal the amount 
                appropriated for that year to carry out this subsection 
                multiplied by the percentage of the total number of 
                elders who reside in the United States who reside in 
                that State.
                    ``(B) Guaranteed minimum payment amount.--
                            ``(i) 50 states.--Subject to clause (ii), 
                        if the amount determined under subparagraph (A) 
                        for a State for a fiscal year is less than 0.75 
                        percent of the amount appropriated for such 
                        year, the Secretary shall increase such 
                        determined amount so that the total amount paid 
                        under this subsection to the State for the year 
                        is equal to 0.75 percent of the amount so 
                        appropriated.
                            ``(ii) Territories.--In the case of a State 
                        other than 1 of the 50 States, clause (i) shall 
                        be applied as if each reference to `0.75' were 
                        a reference to `0.1'.
                    ``(C) Pro rata reductions.--The Secretary shall 
                make such pro rata reductions to the amounts described 
                in subparagraph (A) as are necessary to comply with the 
                requirements of subparagraph (B).
            ``(3) Authorized activities.--
                    ``(A) Adult protective services.--Funds made 
                available pursuant to this subsection may only be used 
                by States and local units of government to provide 
                adult protective services and may not be used for any 
                other purpose.
                    ``(B) Use by agency.--Each State receiving funds 
                pursuant to this subsection shall provide such funds to 
                the agency or unit of State government having legal 
                responsibility for providing adult protective services 
                within the State.
                    ``(C) Supplement not supplant.--Each State or local 
                unit of government shall use funds made available 
                pursuant to this subsection to supplement and not 
                supplant other Federal, State, and local public funds 
                expended to provide adult protective services in the 
                State.
            ``(4) State reports.--Each State receiving funds under this 
        subsection shall submit to the Secretary, at such time and in 
        such manner as the Secretary may require, a report on the 
        number of elders served by the grants awarded under this 
        subsection.
            ``(5) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        $100,000,000 for each of fiscal years 2011 through 2014.
    ``(c) State Demonstration Programs.--
            ``(1) Establishment.--The Secretary shall award grants to 
        States for the purposes of conducting demonstration programs in 
        accordance with paragraph (2).
            ``(2) Demonstration programs.--Funds made available 
        pursuant to this subsection may be used by States and local 
        units of government to conduct demonstration programs that 
        test--
                    ``(A) training modules developed for the purpose of 
                detecting or preventing elder abuse;
                    ``(B) methods to detect or prevent financial 
                exploitation of elders;
                    ``(C) methods to detect elder abuse;
                    ``(D) whether training on elder abuse forensics 
                enhances the detection of elder abuse by employees of 
                the State or local unit of government; or
                    ``(E) other matters relating to the detection or 
                prevention of elder abuse.
            ``(3) Application.--To be eligible to receive a grant under 
        this subsection, a State shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) State reports.--Each State that receives funds under 
        this subsection shall submit to the Secretary a report at such 
        time, in such manner, and containing such information as the 
        Secretary may require on the results of the demonstration 
        program conducted by the State using funds made available under 
        this subsection.
            ``(5) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        $25,000,000 for each of fiscal years 2011 through 2014.

``SEC. 2043. LONG-TERM CARE OMBUDSMAN PROGRAM GRANTS AND TRAINING.

    ``(a) Grants To Support the Long-term Care Ombudsman Program.--
            ``(1) In general.--The Secretary shall make grants to 
        eligible entities with relevant expertise and experience in 
        abuse and neglect in long-term care facilities or long-term 
        care ombudsman programs and responsibilities, for the purpose 
        of--
                    ``(A) improving the capacity of State long-term 
                care ombudsman programs to respond to and resolve 
                complaints about abuse and neglect;
                    ``(B) conducting pilot programs with State long-
                term care ombudsman offices or local ombudsman 
                entities; and
                    ``(C) providing support for such State long-term 
                care ombudsman programs and such pilot programs (such 
                as through the establishment of a national long-term 
                care ombudsman resource center).
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection--
                    ``(A) for fiscal year 2011, $5,000,000;
                    ``(B) for fiscal year 2012, $7,500,000; and
                    ``(C) for each of fiscal years 2013 and 2014, 
                $10,000,000.
    ``(b) Ombudsman Training Programs.--
            ``(1) In general.--The Secretary shall establish programs 
        to provide and improve ombudsman training with respect to elder 
        abuse, neglect, and exploitation for national organizations and 
        State long-term care ombudsman programs.
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, for 
        each of fiscal years 2011 through 2014, $10,000,000.

``SEC. 2044. PROVISION OF INFORMATION REGARDING, AND EVALUATIONS OF, 
              ELDER JUSTICE PROGRAMS.

    ``(a) Provision of Information.--To be eligible to receive a grant 
under this part, an applicant shall agree--
            ``(1) except as provided in paragraph (2), to provide the 
        eligible entity conducting an evaluation under subsection (b) 
        of the activities funded through the grant with such 
        information as the eligible entity may require in order to 
        conduct such evaluation; or
            ``(2) in the case of an applicant for a grant under section 
        2041(b), to provide the Secretary with such information as the 
        Secretary may require to conduct an evaluation or audit under 
        subsection (c).
    ``(b) Use of Eligible Entities To Conduct Evaluations.--
            ``(1) Evaluations required.--Except as provided in 
        paragraph (2), the Secretary shall--
                    ``(A) reserve a portion (not less than 2 percent) 
                of the funds appropriated with respect to each program 
                carried out under this part; and
                    ``(B) use the funds reserved under subparagraph (A) 
                to provide assistance to eligible entities to conduct 
                evaluations of the activities funded under each program 
                carried out under this part.
            ``(2) Certified ehr technology grant program not 
        included.--The provisions of this subsection shall not apply to 
        the certified EHR technology grant program under section 
        2041(b).
            ``(3) Authorized activities.--A recipient of assistance 
        described in paragraph (1)(B) shall use the funds made 
        available through the assistance to conduct a validated 
        evaluation of the effectiveness of the activities funded under 
        a program carried out under this part.
            ``(4) Applications.--To be eligible to receive assistance 
        under paragraph (1)(B), an entity shall submit an application 
        to the Secretary at such time, in such manner, and containing 
        such information as the Secretary may require, including a 
        proposal for the evaluation.
            ``(5) Reports.--Not later than a date specified by the 
        Secretary, an eligible entity receiving assistance under 
        paragraph (1)(B) shall submit to the Secretary, the Committee 
        on Ways and Means and the Committee on Energy and Commerce of 
        the House of Representatives, and the Committee on Finance of 
        the Senate a report containing the results of the evaluation 
        conducted using such assistance together with such 
        recommendations as the entity determines to be appropriate.
    ``(c) Evaluations and Audits of Certified EHR Technology Grant 
Program by the Secretary.--
            ``(1) Evaluations.--The Secretary shall conduct an 
        evaluation of the activities funded under the certified EHR 
        technology grant program under section 2041(b). Such evaluation 
        shall include an evaluation of whether the funding provided 
        under the grant is expended only for the purposes for which it 
        is made.
            ``(2) Audits.--The Secretary shall conduct appropriate 
        audits of grants made under section 2041(b).

``SEC. 2045. REPORT.

    ``Not later than October 1, 2014, the Secretary shall submit to the 
Elder Justice Coordinating Council established under section 2021, the 
Committee on Ways and Means and the Committee on Energy and Commerce of 
the House of Representatives, and the Committee on Finance of the 
Senate a report--
            ``(1) compiling, summarizing, and analyzing the information 
        contained in the State reports submitted under subsections 
        (b)(4) and (c)(4) of section 2042; and
            ``(2) containing such recommendations for legislative or 
        administrative action as the Secretary determines to be 
        appropriate.''.
            (2) Option for state plan under program for temporary 
        assistance for needy families.--
                    (A) In general.--Section 402(a)(1)(B) of the Social 
                Security Act (42 U.S.C. 602(a)(1)(B)) is amended by 
                adding at the end the following new clause:
                            ``(v) The document shall indicate whether 
                        the State intends to assist individuals to 
                        train for, seek, and maintain employment--
                                    ``(I) providing direct care in a 
                                long-term care facility (as such terms 
                                are defined under section 2011); or
                                    ``(II) in other occupations related 
                                to elder care determined appropriate by 
                                the State for which the State 
                                identifies an unmet need for service 
                                personnel,
                        and, if so, shall include an overview of such 
                        assistance.''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall take effect on January 1, 2011.
    (b) Protecting Residents of Long-term Care Facilities.--
            (1) National training institute for surveyors.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall enter into a contract with an entity for 
                the purpose of establishing and operating a National 
                Training Institute for Federal and State surveyors. 
                Such Institute shall provide and improve the training 
                of surveyors with respect to investigating allegations 
                of abuse, neglect, and misappropriation of property in 
                programs and long-term care facilities that receive 
                payments under title XVIII or XIX of the Social 
                Security Act.
                    (B) Activities carried out by the institute.--The 
                contract entered into under subparagraph (A) shall 
                require the Institute established and operated under 
                such contract to carry out the following activities:
                            (i) Assess the extent to which State 
                        agencies use specialized surveyors for the 
                        investigation of reported allegations of abuse, 
                        neglect, and misappropriation of property in 
                        such programs and long-term care facilities.
                            (ii) Evaluate how the competencies of 
                        surveyors may be improved to more effectively 
                        investigate reported allegations of such abuse, 
                        neglect, and misappropriation of property, and 
                        provide feedback to Federal and State agencies 
                        on the evaluations conducted.
                            (iii) Provide a national program of 
                        training, tools, and technical assistance to 
                        Federal and State surveyors on investigating 
                        reports of such abuse, neglect, and 
                        misappropriation of property.
                            (iv) Develop and disseminate information on 
                        best practices for the investigation of such 
                        abuse, neglect, and misappropriation of 
                        property.
                            (v) Assess the performance of State 
                        complaint intake systems, in order to ensure 
                        that the intake of complaints occurs 24 hours 
                        per day, 7 days a week (including holidays).
                            (vi) To the extent approved by the 
                        Secretary of Health and Human Services, provide 
                        a national 24 hours per day, 7 days a week 
                        (including holidays), back-up system to State 
                        complaint intake systems in order to ensure 
                        optimum national responsiveness to complaints 
                        of such abuse, neglect, and misappropriation of 
                        property.
                            (vii) Analyze and report annually on the 
                        following:
                                    (I) The total number and sources of 
                                complaints of such abuse, neglect, and 
                                misappropriation of property.
                                    (II) The extent to which such 
                                complaints are referred to law 
                                enforcement agencies.
                                    (III) General results of Federal 
                                and State investigations of such 
                                complaints.
                            (viii) Conduct a national study of the cost 
                        to State agencies of conducting complaint 
                        investigations of skilled nursing facilities 
                        and nursing facilities under sections 1819 and 
                        1919, respectively, of the Social Security Act 
                        (42 U.S.C. 1395i-3; 1396r), and making 
                        recommendations to the Secretary of Health and 
                        Human Services with respect to options to 
                        increase the efficiency and cost-effectiveness 
                        of such investigations.
                    (C) Authorization.--There are authorized to be 
                appropriated to carry out this paragraph, for the 
                period of fiscal years 2011 through 2014, $12,000,000.
            (2) Grants to state survey agencies.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall make grants to State agencies that 
                perform surveys of skilled nursing facilities or 
                nursing facilities under sections 1819 or 1919, 
                respectively, of the Social Security Act (42 U.S.C. 
                1395i-3; 1395r).
                    (B) Use of funds.--A grant awarded under 
                subparagraph (A) shall be used for the purpose of 
                designing and implementing complaint investigations 
                systems that--
                            (i) promptly prioritize complaints in order 
                        to ensure a rapid response to the most serious 
                        and urgent complaints;
                            (ii) respond to complaints with optimum 
                        effectiveness and timeliness; and
                            (iii) optimize the collaboration between 
                        local authorities, consumers, and providers, 
                        including--
                                    (I) such State agency;
                                    (II) the State Long-Term Care 
                                Ombudsman;
                                    (III) local law enforcement 
                                agencies;
                                    (IV) advocacy and consumer 
                                organizations;
                                    (V) State aging units;
                                    (VI) Area Agencies on Aging; and
                                    (VII) other appropriate entities.
                    (C) Authorization.--There are authorized to be 
                appropriated to carry out this paragraph, for each of 
                fiscal years 2011 through 2014, $5,000,000.
            (3) Reporting of crimes in federally funded long-term care 
        facilities.--Part A of title XI of the Social Security Act (42 
        U.S.C. 1301 et seq.), as amended by sections 1611(c), is 
        amended by inserting after section 1150A the following new 
        section:

``reporting to law enforcement of crimes occurring in federally funded 
                       long-term care facilities

    ``Sec. 1150B.  (a) Determination and Notification.--
            ``(1) Determination.--The owner or operator of each long-
        term care facility that receives Federal funds under this Act 
        shall annually determine whether the facility received at least 
        $10,000 in such Federal funds during the preceding year.
            ``(2) Notification.--If the owner or operator determines 
        under paragraph (1) that the facility received at least $10,000 
        in such Federal funds during the preceding year, such owner or 
        operator shall annually notify each covered individual (as 
        defined in paragraph (3)) of that individual's obligation to 
        comply with the reporting requirements described in subsection 
        (b).
            ``(3) Covered individual defined.--In this section, the 
        term `covered individual' means each individual who is an 
        owner, operator, employee, manager, agent, or contractor of a 
        long-term care facility that is the subject of a determination 
        described in paragraph (1).
    ``(b) Reporting Requirements.--
            ``(1) In general.--Each covered individual shall report to 
        the Secretary and 1 or more law enforcement entities for the 
        political subdivision in which the facility is located any 
        reasonable suspicion of a crime (as defined by the law of the 
        applicable political subdivision) against any individual who is 
        a resident of, or is receiving care from, the facility.
            ``(2) Timing.--If the events that cause the suspicion--
                    ``(A) result in serious bodily injury, the 
                individual shall report the suspicion immediately, but 
                not later than 2 hours after forming the suspicion; and
                    ``(B) do not result in serious bodily injury, the 
                individual shall report the suspicion not later than 24 
                hours after forming the suspicion.
    ``(c) Penalties.--
            ``(1) In general.--If a covered individual violates 
        subsection (b)--
                    ``(A) the covered individual shall be subject to a 
                civil money penalty of not more than $200,000; and
                    ``(B) the Secretary may make a determination in the 
                same proceeding to exclude the covered individual from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)).
            ``(2) Increased harm.--If a covered individual violates 
        subsection (b) and the violation exacerbates the harm to the 
        victim of the crime or results in harm to another individual--
                    ``(A) the covered individual shall be subject to a 
                civil money penalty of not more than $300,000; and
                    ``(B) the Secretary may make a determination in the 
                same proceeding to exclude the covered individual from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)).
            ``(3) Excluded individual.--During any period for which a 
        covered individual is classified as an excluded individual 
        under paragraph (1)(B) or (2)(B), a long-term care facility 
        that employs such individual shall be ineligible to receive 
        Federal funds under this Act.
            ``(4) Extenuating circumstances.--
                    ``(A) In general.--The Secretary may take into 
                account the financial burden on providers with 
                underserved populations in determining any penalty to 
                be imposed under this subsection.
                    ``(B) Underserved population defined.--In this 
                paragraph, the term `underserved population' means the 
                population of an area designated by the Secretary as an 
                area with a shortage of elder justice programs or a 
                population group designated by the Secretary as having 
                a shortage of such programs. Such areas or groups 
                designated by the Secretary may include--
                            ``(i) areas or groups that are 
                        geographically isolated (such as isolated in a 
                        rural area);
                            ``(ii) racial and ethnic minority 
                        populations; and
                            ``(iii) populations underserved because of 
                        special needs (such as language barriers, 
                        disabilities, alien status, or age).
    ``(d) Additional Penalties for Retaliation.--
            ``(1) In general.--A long-term care facility may not--
                    ``(A) discharge, demote, suspend, threaten, harass, 
                or deny a promotion or other employment-related benefit 
                to an employee, or in any other manner discriminate 
                against an employee in the terms and conditions of 
                employment because of lawful acts done by the employee; 
                or
                    ``(B) file a complaint or a report against a nurse 
                or other employee with the appropriate State 
                professional disciplinary agency because of lawful acts 
                done by the nurse or employee,
        for making a report, causing a report to be made, or for taking 
        steps in furtherance of making a report pursuant to subsection 
        (b)(1).
            ``(2) Penalties for retaliation.--If a long-term care 
        facility violates subparagraph (A) or (B) of paragraph (1) the 
        facility shall be subject to a civil money penalty of not more 
        than $200,000 or the Secretary may classify the entity as an 
        excluded entity for a period of 2 years pursuant to section 
        1128(b), or both.
            ``(3) Requirement to post notice.--Each long-term care 
        facility shall post conspicuously in an appropriate location a 
        sign (in a form specified by the Secretary) specifying the 
        rights of employees under this section. Such sign shall include 
        a statement that an employee may file a complaint with the 
        Secretary against a long-term care facility that violates the 
        provisions of this subsection and information with respect to 
        the manner of filing such a complaint.
    ``(e) Procedure.--The provisions of section 1128A (other than 
subsections (a) and (b) and the second sentence of subsection (f)) 
shall apply to a civil money penalty or exclusion under this section in 
the same manner as such provisions apply to a penalty or proceeding 
under section 1128A(a).
    ``(f) Definitions.--In this section, the terms `elder justice', 
`long-term care facility', and `law enforcement' have the meanings 
given those terms in section 2011.''.
    (c) National Nurse Aide Registry.--
            (1) Definition of nurse aide.--In this subsection, the term 
        ``nurse aide'' has the meaning given that term in sections 
        1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act (42 
        U.S.C. 1395i-3(b)(5)(F); 1396r(b)(5)(F)).
            (2) Study and report.--
                    (A) In general.--The Secretary, in consultation 
                with appropriate government agencies and private sector 
                organizations, shall conduct a study on establishing a 
                national nurse aide registry.
                    (B) Areas evaluated.--The study conducted under 
                this subsection shall include an evaluation of--
                            (i) who should be included in the registry;
                            (ii) how such a registry would comply with 
                        Federal and State privacy laws and regulations;
                            (iii) how data would be collected for the 
                        registry;
                            (iv) what entities and individuals would 
                        have access to the data collected;
                            (v) how the registry would provide 
                        appropriate information regarding violations of 
                        Federal and State law by individuals included 
                        in the registry;
                            (vi) how the functions of a national nurse 
                        aide registry would be coordinated with the 
                        nationwide program for national and State 
                        background checks on direct patient access 
                        employees of long-term care facilities and 
                        providers under section 4301; and
                            (vii) how the information included in State 
                        nurse aide registries developed and maintained 
                        under sections 1819(e)(2) and 1919(e)(2) of the 
                        Social Security Act (42 U.S.C. 1395i-3(e)(2); 
                        1396r(e)(2)(2)) would be provided as part of a 
                        national nurse aide registry.
                    (C) Considerations.--In conducting the study and 
                preparing the report required under this subsection, 
                the Secretary shall take into consideration the 
                findings and conclusions of relevant reports and other 
                relevant resources, including the following:
                            (i) The Department of Health and Human 
                        Services Office of Inspector General Report, 
                        Nurse Aide Registries: State Compliance and 
                        Practices (February 2005).
                            (ii) The General Accounting Office (now 
                        known as the Government Accountability Office) 
                        Report, Nursing Homes: More Can Be Done to 
                        Protect Residents from Abuse (March 2002).
                            (iii) The Department of Health and Human 
                        Services Office of the Inspector General 
                        Report, Nurse Aide Registries: Long-Term Care 
                        Facility Compliance and Practices (July 2005).
                            (iv) The Department of Health and Human 
                        Services Health Resources and Services 
                        Administration Report, Nursing Aides, Home 
                        Health Aides, and Related Health Care 
                        Occupations--National and Local Workforce 
                        Shortages and Associated Data Needs (2004) (in 
                        particular with respect to chapter 7 and 
                        appendix F).
                            (v) The 2001 Report to CMS from the School 
                        of Rural Public Health, Texas A&M University, 
                        Preventing Abuse and Neglect in Nursing Homes: 
                        The Role of Nurse Aide Registries.
                            (vi) Information included in State nurse 
                        aide registries developed and maintained under 
                        sections 1819(e)(2) and 1919(e)(2) of the 
                        Social Security Act (42 U.S.C. 1395i-3(e)(2); 
                        1396r(e)(2)(2)).
                    (D) Report.--Not later than 18 months after the 
                date of enactment of this Act, the Secretary shall 
                submit to the Elder Justice Coordinating Council 
                established under section 2021 of the Social Security 
                Act, as added by section 1805(a), the Committee on 
                Finance of the Senate, and the Committee on Ways and 
                Means and the Committee on Energy and Commerce of the 
                House of Representatives a report containing the 
                findings and recommendations of the study conducted 
                under this paragraph.
                    (E) Funding limitation.--Funding for the study 
                conducted under this subsection shall not exceed 
                $500,000.
            (3) Congressional action.--After receiving the report 
        submitted by the Secretary under paragraph (2)(D), the 
        Committee on Finance of the Senate and the Committee on Ways 
        and Means and the Committee on Energy and Commerce of the House 
        of Representatives shall, as they deem appropriate, take action 
        based on the recommendations contained in the report.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary for the purpose 
        of carrying out this subsection.
    (d) Conforming Amendments.--
            (1) Title xx.--Title XX of the Social Security Act (42 
        U.S.C. 1397 et seq.), as amended by section 1913(a), is 
        amended--
                    (A) in the heading of section 2001, by striking 
                ``title'' and inserting ``subtitle''; and
                    (B) in subtitle 1, by striking ``this title'' each 
                place it appears and inserting ``this subtitle''.
            (2) Title iv.--Title IV of the Social Security Act (42 
        U.S.C. 601 et seq.) is amended--
                    (A) in section 404(d)--
                            (i) in paragraphs (1)(A), (2)(A), and 
                        (3)(B), by inserting ``subtitle 1 of'' before 
                        ``title XX'' each place it appears;
                            (ii) in the heading of paragraph (2), by 
                        inserting ``subtitle 1 of'' before ``title 
                        xx''; and
                            (iii) in the heading of paragraph (3)(B), 
                        by inserting ``subtitle 1 of'' before ``title 
                        xx''; and
                    (B) in sections 422(b), 471(a)(4), 472(h)(1), and 
                473(b)(2), by inserting ``subtitle 1 of'' before 
                ``title XX'' each place it appears.
            (3) Title xi.--Title XI of the Social Security Act (42 
        U.S.C. 1301 et seq.) is amended--
                    (A) in section 1128(h)(3)--
                            (i) by inserting ``subtitle 1 of'' before 
                        ``title XX''; and
                            (ii) by striking ``such title'' and 
                        inserting ``such subtitle''; and
                    (B) in section 1128A(i)(1), by inserting ``subtitle 
                1 of'' before ``title XX''.

             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.

    (a) Protecting Americans and Ensuring Taxpayer Funds in Government 
Health Care Plans Do Not Support or Fund Physician-assisted Suicide.--
The Federal Government, and any State or local government or health 
care provider that receives Federal financial assistance under this Act 
(or under an amendment made by this Act) or any health plan created 
under this Act (or under an amendment made by this Act), shall not pay 
for or reimburse any health care entity to provide for any health care 
item or service furnished for the purpose of causing, or for the 
purpose of assisting in causing, the death of any individual, such as 
by assisted suicide, euthanasia, or mercy killing.
    (b) Prohibition Against Discrimination on Assisted Suicide.--
            (1) In general.--The Federal Government, and any State or 
        local government or health care provider that receives Federal 
        financial assistance under this Act (or under an amendment made 
        by this Act) or any health plan created under this Act (or 
        under an amendment made by this Act), may not subject an 
        individual or institutional health care entity to 
        discrimination on the basis that the entity does not provide 
        any health care item or service furnished for the purpose of 
        causing, or for the purpose of assisting in causing, the death 
        of any individual, such as by assisted suicide, euthanasia, or 
        mercy killing.
            (2) Administration.--The Office for Civil Rights of the 
        Department of Health and Human Services is designated to 
        receive complaints of discrimination based on this subsection.
    (c) Construction and Treatment of Certain Services.--Nothing in 
subsection (a) or (b) shall be construed to apply to or to affect any 
limitation relating to--
            (1) the withholding or withdrawing of medical treatment or 
        medical care;
            (2) the withholding or withdrawing of nutrition or 
        hydration;
            (3) abortion; or
            (4) the use of an item, good, benefit, or service furnished 
        for the purpose of alleviating pain or discomfort, even if such 
        use may increase the risk of death, so long as such item, good, 
        benefit, or service is not also furnished for the purpose of 
        causing, or the purpose of assisting in causing, death, for any 
        reason.
    (d) Definition.--In this section, the term ``health care entity'' 
includes an individual physician or other health care professional, a 
hospital, a provider-sponsored organization, a health maintenance 
organization, a health insurance plan, or any other kind of health care 
facility, organization, or plan.

SEC. 1922. PROTECTION OF ACCESS TO QUALITY HEALTH CARE THROUGH THE 
              DEPARTMENT OF VETERANS AFFAIRS AND THE DEPARTMENT OF 
              DEFENSE.

    (a) Health Care Through Department of Veterans Affairs.--Nothing is 
in this Act shall be construed to prohibit, limit, or otherwise 
penalize veterans and dependents eligible for health care through the 
Department of Veterans Affairs under the laws administered by the 
Secretary of Veterans Affairs from receiving timely access to quality 
health care in any facility of the Department or from any non-
Department health care provider through which the Secretary provides 
health care.
    (b) Health Care Through Department of Defense.--
            (1) In general.--Nothing is in this Act shall be construed 
        to prohibit, limit, or otherwise penalize eligible 
        beneficiaries from receiving timely access to quality health 
        care in any military medical treatment facility or under the 
        TRICARE program.
            (2) Definitions.--In this subsection:
                    (A) The term ``eligible beneficiaries'' means 
                covered beneficiaries (as defined in section 1072(5) of 
                title 10, United States Code) for purposes of eligible 
                for mental and dental care under chapter 55 of title 
                10, United States Code.
                    (B) The term ``TRICARE program'' has the meaning 
                given that term in section 1072(7) of title 10, United 
                States Code.

SEC. 1923. CONTINUED APPLICATION OF ANTITRUST LAWS.

    Nothing in this Act shall be construed to modify, impair, or 
supersede the operation of any of the antitrust laws. For the purposes 
of this Act, the term ``antitrust laws'' has the meaning given such 
term in subsection (a) of the first section of the Clayton Act (15 
U.S.C. 12(a)). Such term also includes section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45) to the extent that such section 5 applies 
to unfair methods of competition.

          TITLE II--PROMOTING DISEASE PREVENTION AND WELLNESS

                          Subtitle A--Medicare

SEC. 2001. COVERAGE OF ANNUAL WELLNESS VISIT PROVIDING A PERSONALIZED 
              PREVENTION PLAN.

    (a) Coverage of Personalized Prevention Plan Services.--
            (1) In general.--Section 1861(s)(2) of the Social Security 
        Act (42 U.S.C. 1395x(s)(2)) is amended--
                    (A) in subparagraph (DD), by striking ``and'' at 
                the end;
                    (B) in subparagraph (EE), by adding ``and'' at the 
                end; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(FF) personalized prevention plan services (as defined in 
        subsection (hhh));''.
            (2) Conforming amendments.--Clauses (i) and (ii) of section 
        1861(s)(2)(K) of the Social Security Act (42 U.S.C. 
        1395x(s)(2)(K)) are each amended by striking ``subsection 
        (ww)(1)'' and inserting ``subsections (ww)(1) and (hhh)''.
    (b) Personalized Prevention Plan Services Defined.--Section 1861 of 
the Social Security Act (42 U.S.C. 1395x) is amended by adding at the 
end the following new subsection:

                        ``Annual Wellness Visit

    ``(hhh)(1) The term `personalized prevention plan services' means 
the creation of a plan for an individual--
            ``(A) that includes a health risk assessment (that meets 
        the guidelines established by the Secretary under paragraph 
        (5)(A)) of the individual that is completed prior to or as part 
        of the same visit with a health professional described in 
        paragraph (4); and
            ``(B) that--
                    ``(i) takes into account the results of the health 
                risk assessment;
                    ``(ii) contains the elements described in paragraph 
                (2); and
                    ``(iii) may contain the elements described in 
                paragraph (3).
    ``(2) Subject to paragraph (5)(H), the elements described in this 
paragraph are the following:
            ``(A) The establishment of, or an update to, the 
        individual's medical and family history.
            ``(B) The establishment of, or an update to, the following:
                    ``(i) A screening schedule for the next 5 to 10 
                years, as appropriate, based on recommendations of the 
                United States Preventive Services Task Force and the 
                individual's health status, screening history, and age-
                appropriate preventive services covered under this 
                title.
                    ``(ii) A list of risk factors and conditions that 
                are of concern with respect to the individual, 
                development of a strategy to improve health status 
                through lifestyle or other interventions that emphasize 
                primary prevention, and recommendations for appropriate 
                programs and informational resources for reducing or 
                eliminating such risk factors and conditions.
                    ``(iii) A list of risk factors and conditions for 
                which secondary or tertiary prevention interventions 
                are recommended or are underway, and a list of 
                treatment options and their associated risks and 
                benefits.
                    ``(iv) A list of all medications currently 
                prescribed for the individual.
                    ``(v) A list of all providers of services and 
                suppliers regularly involved in providing care to the 
                individual.
            ``(C) The furnishing of personalized health advice and a 
        referral, as appropriate, to health education or preventive 
        counseling services aimed at reducing identified risk factors, 
        or community-based lifestyle interventions to reduce health 
        risks and promote wellness, including weight loss, physical 
        activity, smoking cessation, and nutrition.
            ``(D) A measurement of height, weight, body mass index (or 
        waist circumference, if appropriate), and blood pressure.
            ``(E) Any other element determined appropriate by the 
        Secretary.
    ``(3) Subject to paragraph (5)(H), the elements described in this 
paragraph are the following:
            ``(A) Referral for additional testing related to a 
        diagnosis of a possible chronic condition.
            ``(B) In the case of an individual with a diagnosed chronic 
        condition, referral for or review of the available treatment 
        options.
            ``(C) The furnishing of or referral for any preventive 
        services described in subparagraphs (A) and (B) of subsection 
        (ddd)(3).
            ``(D) Cognitive impairment assessment.
            ``(E) Any other element determined appropriate by the 
        Secretary.
    ``(4) A health professional described in this paragraph is--
            ``(A) a physician;
            ``(B) a practitioner described in clause (i) of section 
        1842(b)(18)(C); or
            ``(C) a medical professional (including a health educator, 
        registered dietitian, or nutrition professional) or a team of 
        medical professionals, as determined appropriate by the 
        Secretary, under the supervision of a physician.
    ``(5)(A) For purposes of paragraph (1)(A), the Secretary, not later 
than 1 year after the date of enactment of the America's Healthy Future 
Act of 2009, shall establish publicly available guidelines for health 
risk assessments. Such guidelines shall be developed in consultation 
with relevant groups and entities and shall provide that a health risk 
assessment--
            ``(i) identify chronic diseases, modifiable risk factors, 
        and urgent health needs of the individual; and
            ``(ii) may be furnished--
                    ``(I) through an interactive telephonic or web-
                based program that meets the standards established 
                under subparagraph (D);
                    ``(II) during an encounter with a health care 
                professional; or
                    ``(III) through any other means the Secretary 
                determines appropriate to maximize accessibility and 
                ease of use by beneficiaries, while ensuring the 
                privacy of such beneficiaries.
    ``(B) The Secretary may coordinate with community-based entities 
(including State Health Insurance Programs, Area Agencies on Aging, 
Aging and Disability Resource Centers, and the Administration on Aging) 
to--
            ``(i) ensure that health risk assessments are accessible to 
        beneficiaries; and
            ``(ii) provide appropriate support for the completion of 
        health risk assessments by beneficiaries.
    ``(C) The Secretary shall establish procedures to make 
beneficiaries and providers aware of the requirement that a beneficiary 
complete a health risk assessment prior to or at the same time as 
receiving personalized prevention plan services.
    ``(D) Not later than 1 year after the date of enactment of the 
America's Healthy Future Act of 2009, the Secretary shall establish 
standards for interactive telephonic or web-based programs used to 
furnish health risk assessments under subparagraph (A)(ii)(I).
    ``(E) To the extent practicable, the Secretary shall encourage the 
use of, integration with, and coordination of health information 
technology (including use of technology that is compatible with 
electronic medical records and personal health records) and may 
experiment with the use of personalized technology to aid in the 
management of and adherence to provider recommendations in order to 
improve the health status of beneficiaries.
    ``(F) A beneficiary shall be eligible to receive personalized 
prevention plan services under this subsection provided that the 
beneficiary has not received such services within the preceding 12-
month period. During the period of 12 months after the date that the 
beneficiary's first coverage begins under part B, payment shall be made 
under such part for only one of the following services:
            ``(i) An initial preventive physical examination (as 
        defined under subsection (ww)(1)).
            ``(ii) Personalized prevention plan services provided under 
        this subsection.
    ``(G)(i) Not later than 1 year after the date of enactment of the 
America's Healthy Future Act of 2009, the Secretary shall develop and 
make available to the public a health risk assessment model. Such model 
shall meet the guidelines under subparagraph (A) and may be used to 
meet the requirement under paragraph (1)(A).
    ``(ii) Any health risk assessment that meets the guidelines under 
subparagraph (A) and is approved by the Secretary may be used to meet 
the requirement under paragraph (1)(A).
    ``(H)(i) Subject to clause (ii), the Secretary shall issue guidance 
that--
            ``(I) identifies elements under paragraphs (2) and (3) that 
        are not required to be provided to a beneficiary during each 
        annual visit; and
            ``(II) establishes a yearly schedule for appropriate 
        provision of such elements.
    ``(ii) Personalized prevention plan services that are provided to a 
beneficiary within the period of 12 months after the date that such 
beneficiary's first coverage period begins under part B shall be 
required to include any elements included under paragraphs (2) and 
(3).''.
    (c) Payment and Elimination of Cost-Sharing.--
            (1) Payment and elimination of coinsurance.--Section 
        1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) 
        is amended--
                    (A) in subparagraph (N), by inserting ``other than 
                personalized prevention plan services (as defined in 
                section 1861(hhh)(1))'' after ``(as defined in section 
                1848(j)(3))'';
                    (B) by striking ``and'' before ``(W)''; and
                    (C) by inserting before the semicolon at the end 
                the following: ``, and (X) with respect to personalized 
                prevention plan services (as defined in section 
                1861(hhh)(1)), the amount paid shall be 100 percent of 
                the lesser of the actual charge for the services or the 
                amount determined under the payment basis determined 
                under section 1848''.
            (2) Payment under physician fee schedule.--Section 
        1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-4(j)(3)) 
        is amended by inserting ``(2)(FF) (including administration of 
        the health risk assessment) ,'' after ``(2)(EE),''.
            (3) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)) is amended by striking ``and 
                diagnostic mammography'' and inserting ``, diagnostic 
                mammography, or personalized prevention plan services 
                (as defined in section 1861(hhh)(1))''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)) is 
                amended--
                            (i) in subparagraph (F), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (G)(ii), by striking 
                        the comma at the end and inserting ``; and''; 
                        and
                            (iii) by inserting after subparagraph 
                        (G)(ii) the following new subparagraph:
                    ``(H) with respect to personalized prevention plan 
                services (as defined in section 1861(hhh)(1)) furnished 
                by an outpatient department of a hospital, the amount 
                determined under paragraph (1)(X),''.
            (4) Waiver of application of deductible.--The first 
        sentence of section 1833(b) of the Social Security Act (42 
        U.S.C. 1395l(b)) is amended--
                    (A) by striking ``and'' before ``(9)''; and
                    (B) by inserting before the period the following: 
                ``, and (10) such deductible shall not apply with 
                respect to personalized prevention plan services (as 
                defined in section 1861(hhh)(1))''.
    (d) Frequency Limitation.--Section 1862(a) of the Social Security 
Act (42 U.S.C. 1395y(a)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (N), by striking ``and'' at the 
                end;
                    (B) in subparagraph (O), by striking the semicolon 
                at the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(P) in the case of personalized prevention plan services 
        (as defined in section 1861(hhh)(1)), which are performed more 
        frequently than is covered under such section;''; and
            (2) in paragraph (7), by striking ``or (K)'' and inserting 
        ``(K), or (P)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2011.

SEC. 2002. REMOVAL OF BARRIERS TO PREVENTIVE SERVICES.

    (a) Definition of Preventive Services.--Section 1861(ddd) of the 
Social Security Act (42 U.S.C. 1395x(ddd)) is amended--
            (1) in the heading, by inserting ``; Preventive Services'' 
        after ``Services'';
            (2) in paragraph (1), by striking ``not otherwise described 
        in this title'' and inserting ``not described in subparagraph 
        (A) or (C) of paragraph (3)''; and
            (3) by adding at the end the following new paragraph:
    ``(3) The term `preventive services' means the following:
            ``(A) The screening and preventive services described in 
        subsection (ww)(2) (other than the service described in 
        subparagraph (M) of such subsection).
            ``(B) An initial preventive physical examination (as 
        defined in subsection (ww)).
            ``(C) Personalized prevention plan services (as defined in 
        subsection (hhh)(1)).''.
    (b) Coinsurance.--
            (1) General application.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)), as amended by 
                section 2001(c)(1), is amended--
                            (i) in subparagraph (T), by inserting ``(or 
                        100 percent if such services are recommended 
                        with a grade of A or B by the United States 
                        Preventive Services Task Force for any 
                        indication or population and are appropriate 
                        for the individual)'' after ``80 percent'';
                            (ii) in subparagraph (W)--
                                    (I) in clause (i), by inserting 
                                ``(if such subparagraph were applied, 
                                by substituting `100 percent' for `80 
                                percent')'' after ``subparagraph (D)''; 
                                and
                                    (II) in clause (ii), by striking 
                                ``80 percent'' and inserting ``100 
                                percent'';
                            (iii) by striking ``and'' before ``(X)''; 
                        and
                            (iv) by inserting before the semicolon at 
                        the end the following: ``, and (Y) with respect 
                        to preventive services described in 
                        subparagraphs (A) and (B) of section 
                        1861(ddd)(3) that are appropriate for the 
                        individual and, in the case of such services 
                        described in subparagraph (A), are recommended 
                        with a grade of A or B by the United States 
                        Preventive Services Task Force for any 
                        indication or population, the amount paid shall 
                        be 100 percent of the lesser of the actual 
                        charge for the services or the amount 
                        determined under the fee schedule that applies 
                        to such services under this part''.
            (2) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)), as amended by section 
                2001(c)(3)(A), is amended--
                            (i) by striking ``or'' before 
                        ``personalized prevention plan services''; and
                            (ii) by inserting before the period the 
                        following: ``, or preventive services described 
                        in subparagraphs (A) and (B) of section 
                        1861(ddd)(3) that are appropriate for the 
                        individual and, in the case of such services 
                        described in subparagraph (A), are recommended 
                        with a grade of A or B by the United States 
                        Preventive Services Task Force for any 
                        indication or population''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)), as 
                amended by section 2001(c)(3)(B), is amended--
                            (i) in subparagraph (G)(ii), by striking 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (H), by striking the 
                        comma at the end and inserting ``; and''; and
                            (iii) by inserting after subparagraph (H) 
                        the following new subparagraph:
                    ``(I) with respect to preventive services described 
                in subparagraphs (A) and (B) of section 1861(ddd)(3) 
                that are appropriate for the individual and are 
                furnished by an outpatient department of a hospital 
                and, in the case of such services described in 
                subparagraph (A), are recommended with a grade of A or 
                B by the United States Preventive Services Task Force 
                for any indication or population, the amount determined 
                under paragraph (1)(W) or (1)(Y),''.
    (c) Waiver of Application of Deductible for Preventive Services and 
Colorectal Cancer Screening Tests.--Section 1833(b) of the Social 
Security Act (42 U.S.C. 1395l(b)), as amended by section 2001(c)(4) is 
amended--
            (1) in paragraph (1), by striking ``items and services 
        described in section 1861(s)(10)(A)'' and inserting 
        ``preventive services described in subparagraph (A) of section 
        1861(ddd)(3) that are recommended with a grade of A or B by the 
        United States Preventive Services Task Force for any indication 
        or population and are appropriate for the individual.''; and
            (2) by adding at the end the following new sentence: 
        ``Paragraph (1) of the first sentence of this subsection shall 
        apply with respect to a colorectal cancer screening test 
        regardless of the code that is billed for the establishment of 
        a diagnosis as a result of the test, or for the removal of 
        tissue or other matter or other procedure that is furnished in 
        connection with, as a result of, and in the same clinical 
        encounter as the screening test.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 2003. EVIDENCE-BASED COVERAGE OF PREVENTIVE SERVICES.

    (a) Authority To Modify or Eliminate Coverage of Certain Preventive 
Services.--
            (1) In general.--Section 1834 of the Social Security Act 
        (42 U.S.C. 1395m) is amended by adding at the end the following 
        new subsection:
    ``(n) Authority To Modify or Eliminate Coverage of Certain 
Preventive Services.--Notwithstanding any other provision of this 
title, effective beginning on January 1, 2010, if the Secretary 
determines appropriate, the Secretary may--
            ``(1) modify--
                    ``(A) the coverage of any preventive service 
                described in subparagraph (A) of section 1861(ddd)(3) 
                to the extent that such modification is consistent with 
                the recommendations of the United States Preventive 
                Services Task Force; and
                    ``(B) the services included in the initial 
                preventive physical examination described in 
                subparagraph (B) of such section; and
            ``(2) provide that no payment shall be made under this 
        title for a preventive service described in subparagraph (A) of 
        such section that is not recommended with a grade of A, B, C, 
        or I by such Task Force.''.
            (2) Construction.--Nothing in the amendment made by 
        paragraph (1) shall be construed to affect the coverage of 
        diagnostic or treatment services under title XVIII of the 
        Social Security Act.
    (b) Support for Outreach and Education Regarding Preventive 
Services.--
            (1) Funding.--
                    (A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, there are appropriated for 
                fiscal year 2010, $15,000,000 to the Centers for 
                Medicare & Medicaid Services Program Management Account 
                for the purposes described in subparagraph (B). Amounts 
                appropriated under this subparagraph shall--
                            (i) be disbursed to such Account on January 
                        1, 2010; and
                            (ii) remain available until expended.
                    (B) Purposes described.--The purposes described in 
                this subparagraph are as follows:
                            (i) To conduct education and outreach 
                        activities to Medicare beneficiaries and health 
                        care providers regarding the coverage of 
                        preventive services (as defined in section 
                        1861(ddd)(3) of the Social Security Act, as 
                        added by section 2002(a)) under the Medicare 
                        program under title XVIII of such Act in order 
                        to encourage optimal utilization of such 
                        services.
                            (ii) To coordinate such education and 
                        outreach activities with community-based 
                        entities, including State Health Insurance 
                        Programs, Area Agencies on Aging, and Aging and 
                        Disability Resource Centers, that are carrying 
                        out the activities described in section 
                        1861(hhh)(5)(B) of the Social Security Act, as 
                        added by section 2001(b).
                    (C) Activity support.--Out of the amounts 
                appropriated under subparagraph (A), the Secretary may 
                provide support and assistance for activities conducted 
                by community-based entities as described under 
                subparagraph (B)(ii).
            (2) HHS study and report to congress.--
                    (A) Study.--The Secretary of Health and Human 
                Services shall conduct a study on preventive services 
                under the Medicare program. Such study shall include an 
                analysis of--
                            (i) the implementation of the amendments 
                        made by section 101(a) of the Medicare 
                        Improvements for Patients and Providers Act of 
                        2008 (Public Law 110-275; 122 Stat. 2496), 
                        including a description of plans to add 
                        coverage of additional preventive services 
                        pursuant to such amendments; and
                            (ii) the implementation of the education 
                        and outreach activities under paragraph (1)(B).
                    (B) Report.--Not later than 1 year after the date 
                of the enactment of this Act, the Secretary of Health 
                and Human Services shall submit to Congress a report on 
                the study conducted under subparagraph (A), together 
                with recommendations for such legislation and 
                administrative action as the Secretary determines 
                appropriate.
                    (C) Funding.--Out of the amounts appropriated under 
                paragraph (1)(A), an amount not greater than $1,000,000 
                shall be made available to carry out this paragraph.
            (3) GAO study and report to congress.--
                    (A) Study.--The Comptroller General of the United 
                States shall conduct a study on existing efforts by the 
                Secretary of Health and Human Services to improve 
                utilization of preventive services under the Medicare 
                program, including primary, secondary, and tertiary 
                services and the use of health information technology 
                to coordinate such services. Such study shall include 
                an analysis of--
                            (i) the utilization of and payment for 
                        preventive services under the Medicare program; 
                        and
                            (ii) whether barriers to optimal 
                        utilization of and access to such services 
                        exist and if so, what are those barriers.
                    (B) Report.--Not later than 2 years after the date 
                of the enactment of this Act, the Comptroller General 
                of the United States shall submit to Congress a report 
                on the study conducted under subparagraph (A), together 
                with recommendations for--
                            (i) improving access to, and utilization 
                        and coordination of, primary, secondary, and 
                        tertiary preventive services under the Medicare 
                        program, with an emphasis on the most costly 
                        chronic conditions affecting Medicare 
                        population; and
                            (ii) such legislation and administrative 
                        action as the Comptroller General determines 
                        appropriate.
                    (C) Funding.--Out of any funds in the Treasury not 
                otherwise appropriated, there are appropriated 
                $2,000,000 to carry out this paragraph. Amounts 
                appropriated under this subparagraph shall remain 
                available until expended.

SEC. 2004. GAO STUDY AND REPORT ON MEDICARE BENEFICIARY ACCESS TO 
              VACCINES.

    (a) Study.--The Comptroller General of the United States (in this 
section referred to as the ``Comptroller General'') shall conduct a 
study on the ability of Medicare beneficiaries who were 65 years of age 
or older to access routinely recommended vaccines covered under the 
prescription drug program under part D of title XVIII of the Social 
Security Act over the period since the establishment of such program. 
Such study shall include the following:
            (1) An analysis and determination of--
                    (A) the number of Medicare beneficiaries who were 
                65 years of age or older and were eligible for a 
                routinely recommended vaccination that was covered 
                under part D;
                    (B) the number of such beneficiaries who actually 
                received a routinely recommended vaccination that was 
                covered under part D; and
                    (C) any barriers to access by such beneficiaries to 
                routinely recommended vaccinations that were covered 
                under part D.
            (2) A summary of the findings and recommendations by 
        government agencies, departments, and advisory bodies (as well 
        as relevant professional organizations) on the impact of 
        coverage under part D of routinely recommended adult 
        immunizations for access to such immunizations by Medicare 
        beneficiaries.
    (b) Report.--Not later than June 1, 2010, the Comptroller General 
shall submit to the appropriate committees of jurisdiction of the House 
of Representatives and the Senate a report containing the results of 
the study conducted under subsection (a), together with recommendations 
for such legislation and administrative action as the Comptroller 
General determines appropriate.
    (c) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated $1,000,000 for fiscal year 2010 to 
carry out this section.

SEC. 2005. INCENTIVES FOR HEALTHY LIFESTYLES.

    (a) Medicare Demonstration Project.--
            (1) Establishment.--
                    (A) In general.--The Secretary shall establish and 
                implement a demonstration project under title XVIII of 
                the Social Security Act to test programs that provide 
                incentives to Medicare beneficiaries to reduce their 
                risk of avoidable health outcomes that are associated 
                with lifestyle choices, including smoking, exercise, 
                and diet.
                    (B) Evidence review.--Prior to the establishment of 
                the demonstration project, the Secretary shall review 
                the available evidence, literature, best practices, and 
                resources relevant to the Medicare population that are 
                related to--
                            (i) programs that promote a healthy 
                        lifestyle and reduce health risk factors; and
                            (ii) providing individuals with incentives 
                        for participating in such programs.
            (2) Duration and scope.--
                    (A) Duration.--The Secretary shall conduct the 
                demonstration project for an initial period of 3 years, 
                beginning not later than July 1, 2010, with authority 
                to continue for an additional 2 years any program or 
                program component that is determined to be effective 
                under the interim evaluation and report described under 
                subsection (b).
                    (B) Scope.--
                            (i) In general.--The Secretary shall select 
                        not more than 10 sites to conduct the programs 
                        described in paragraph (3), and may select such 
                        sites in coordination with other community-
                        based programs that are oriented towards 
                        promoting healthy lifestyles, reducing risk 
                        factors, and reducing the impact of chronic 
                        diseases (including programs conducted by the 
                        Administration on Aging, the Centers for 
                        Disease Control and Prevention, and the Agency 
                        for Healthcare Research and Quality).
                            (ii) Selection.--In selecting sites to 
                        participate in the demonstration project, the 
                        Secretary shall select--
                                    (I) not less than 2 sites that are 
                                located in rural areas; and
                                    (II) not less than 2 sites that 
                                serve a minority community (including 
                                Native American communities).
                            (iii) Preference.--In selecting sites to 
                        participate in the demonstration project, the 
                        Secretary may give preference to organizations 
                        that have demonstrated experience in designing 
                        and implementing programs that provide 
                        incentives to adults to make healthy lifestyle 
                        choices.
            (3) Program described.--The Secretary shall select programs 
        that are evidence-based and designed to help Medicare 
        beneficiaries make healthy lifestyle choices to reduce their 
        health risks, including--
                    (A) ceasing use of tobacco products;
                    (B) controlling or reducing their weight;
                    (C) controlling or lowering their cholesterol;
                    (D) lowering their blood pressure;
                    (E) learning strategies to avoid the onset of 
                diabetes or, in the case of a diabetic, improving the 
                management of such condition;
                    (F) reducing the risks of falls; and
                    (G) other approaches as determined by the 
                Secretary.
            (4) Monitoring participation and measuring outcomes.--Each 
        participating site shall establish a system to--
                    (A) monitor participation by Medicare beneficiaries 
                in programs described in paragraph (3); and
                    (B) validate changes in health risks and outcomes, 
                including adoption and maintenance of healthy behaviors 
                by Medicare beneficiaries participating in such 
                programs; and
                    (C) establish standards and health status targets 
                for Medicare beneficiaries participating in such 
                programs and measure the degree to which such standards 
                and targets are met.
    (b) Evaluations and Reports.--
            (1) In general.--
                    (A) Independent evaluations.--The Secretary shall 
                provide for an interim and final independent evaluation 
                of the demonstration project that shall assess--
                            (i) the extent to which participating 
                        Medicare beneficiaries achieved the program 
                        goals described in subsection (a)(3); and
                            (ii) any impact on utilization of health 
                        services and costs to the Medicare program as 
                        compared to the cost of the programs conducted 
                        under the demonstration project.
                    (B) Interim determination.--Not later than July 1, 
                2013, the Secretary shall make a determination, 
                pursuant to subsection (a)(2)(A), as to any programs or 
                program components that should be extended through July 
                1, 2015.
            (2) Interim report.--Not later than January 1, 2014, the 
        Secretary shall submit to Congress an interim report on the 
        demonstration project. The interim report shall include--
                    (A) a preliminary evaluation of the effectiveness 
                of the programs or program components conducted through 
                the demonstration project; and
                    (B) a description of any programs or program 
                components that have been extended under paragraph 
                (1)(B).
            (3) Final report.--Not later than January 1, 2016, the 
        Secretary shall submit to Congress a final report on the 
        demonstration project that includes the results of the 
        independent evaluation required under paragraph (1), together 
        with recommendations for such legislation and administrative 
        action as the Secretary determines appropriate, including a 
        recommendation as to any programs conducted under the 
        demonstration project that should be extended or expanded.
    (c) No Effect on Eligibility for, or Amount of, Other Benefits.--
Any incentives provided to a Medicare beneficiary participating in the 
demonstration project shall not be taken into account for purposes of 
determining the beneficiary's eligibility for, or amount of, benefits 
under the Medicare program or any other program funded in whole or in 
part with Federal funds.
    (d) Funding.--
            (1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated $15,000,000 for 
        each of fiscal years 2010 through 2015 to the Centers for 
        Medicare & Medicaid Services Program Management Account to 
        carry out the demonstration project. Amounts appropriated under 
        this paragraph shall remain available until expended.
            (2) Use of certain funds.--Out of the amounts appropriated 
        under paragraph (1), an amount not greater than $5,000,000 
        shall be made available to design, implement, and evaluate 
        programs conducted under the demonstration project, with such 
        amount to remain available until expended.
    (e) Administration.--Chapter 35 of title 44, United States Code 
shall not apply to the selection, testing, and evaluation of programs, 
or the expansion of such programs, under this section.
    (f) Definitions.--In this section:
            (1) Demonstration project.--The term ``demonstration 
        project'' means the demonstration project conducted under this 
        section.
            (2) Medicare beneficiary.--The term ``Medicare 
        beneficiary'' means an individual who is entitled to benefits 
        under part A of title XVIII of the Social Security Act and 
        enrolled under part B of such title.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

                          Subtitle B--Medicaid

SEC. 2101. IMPROVING ACCESS TO PREVENTIVE SERVICES FOR ELIGIBLE ADULTS.

    (a) Clarification of Inclusion of Services.--Section 1905(a)(13) of 
the Social Security Act (42 U.S.C. 1396d(a)(13)) is amended to read as 
follows:
            ``(13) other diagnostic, screening, preventive, and 
        rehabilitative services, including--
                    ``(A) any clinical preventive services that are 
                assigned a grade of A or B by the United States 
                Preventive Services Task Force;
                    ``(B) with respect to an adult individual, approved 
                vaccines recommended by the Advisory Committee on 
                Immunization Practices (an advisory committee 
                established by the Secretary, acting through the 
                Director of the Centers for Disease Control and 
                Prevention) and their administration; and
                    ``(C) any medical or remedial services (provided in 
                a facility, a home, or other setting) recommended by a 
                physician or other licensed practitioner of the healing 
                arts within the scope of their practice under State 
                law, for the maximum reduction of physical or mental 
                disability and restoration of an individual to the best 
                possible functional level;''.
    (b) Increased Fmap.--Section 1905(b) of the Social Security Act (42 
U.S.C. 1396d(b)), as amended by sections 1601(a)(3)(A) and 1604(c)(1), 
is amended in the first sentence--
            (1) by striking ``, and (4)'' and inserting ``, (4)''; and
            (2) by inserting before the period the following: ``, and 
        (5) in the case of a State that provides medical assistance for 
        services and vaccines described in subparagraphs (A) and (B) of 
        subsection (a)(13), and prohibits cost-sharing for such 
        services and vaccines, the Federal medical assistance 
        percentage, as determined under this subsection and subsection 
        (y) (without regard to paragraph (1)(C) of such subsection), 
        shall be increased by 1 percentage point with respect to 
        medical assistance for such services and vaccines and for items 
        and services described in subsection (a)(4)(D)''.
    (c) Effective Date.--The amendments made under this section shall 
take effect on January 1, 2013.

SEC. 2102. COVERAGE OF COMPREHENSIVE TOBACCO CESSATION SERVICES FOR 
              PREGNANT WOMEN.

    (a) Requiring Coverage of Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--Section 1905 of the Social 
Security Act (42 U.S.C. 1396d), as amended by sections 1601(a)(3)(B), 
1636, and 1642, is further amended--
            (1) in subsection (a)(4)--
                    (A) by striking ``and'' before ``(C)''; and
                    (B) by inserting before the semicolon at the end 
                the following new subparagraph: ``; and (D) counseling 
                and pharmacotherapy for cessation of tobacco use by 
                pregnant women (as defined in subsection (bb))''; and
            (2) by adding at the end the following:
    ``(bb)(1) For purposes of this title, the term `counseling and 
pharmacotherapy for cessation of tobacco use by pregnant women' means 
diagnostic, therapy, and counseling services and pharmacotherapy 
(including the coverage of prescription and nonprescription tobacco 
cessation agents approved by the Food and Drug Administration) for 
cessation of tobacco use by pregnant women who use tobacco products or 
who are being treated for tobacco use that is furnished--
            ``(A) by or under the supervision of a physician; or
            ``(B) by any other health care professional who--
                    ``(i) is legally authorized to furnish such 
                services under State law (or the State regulatory 
                mechanism provided by State law) of the State in which 
                the services are furnished; and
                    ``(ii) is authorized to receive payment for other 
                services under this title or is designated by the 
                Secretary for this purpose.
    ``(2) Subject to paragraph (3), such term is limited to--
            ``(A) services recommended with respect to pregnant women 
        in `Treating Tobacco Use and Dependence: 2008 Update: A 
        Clinical Practice Guideline', published by the Public Health 
        Service in May 2008, or any subsequent modification of such 
        Guideline; and
            ``(B) such other services that the Secretary recognizes to 
        be effective for cessation of tobacco use by pregnant women.
    ``(3) Such term shall not include coverage for drugs or biologicals 
that are not otherwise covered under this title.''.
    (b) Exception From Optional Restriction Under Medicaid Prescription 
Drug Coverage.--Section 1927(d)(2)(F) of the Social Security Act (42 
U.S.C. 1396r-8(d)(2)(F)), as redesignated by section 1652(a), is 
amended by inserting before the period at the end the following: ``, 
except, in the case of pregnant women when recommended in accordance 
with the Guideline referred to in section 1905(bb)(2)(A), agents 
approved by the Food and Drug Administration under the over-the-counter 
monograph process for purposes of promoting, and when used to promote, 
tobacco cessation''.
    (c) Removal of Cost-Sharing for Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--
            (1) General cost-sharing limitations.--Section 1916 of the 
        Social Security Act (42 U.S.C. 1396o) is amended in each of 
        subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and 
        counseling and pharmacotherapy for cessation of tobacco use by 
        pregnant women (as defined in section 1905(bb)) and covered 
        outpatient drugs (as defined in subsection (k)(2) of section 
        1927 and including nonprescription drugs described in 
        subsection (d)(2) of such section) that are prescribed for 
        purposes of promoting, and when used to promote, tobacco 
        cessation by pregnant women in accordance with the Guideline 
        referred to in section 1905(bb)(2)(A)'' after ``complicate the 
        pregnancy''.
            (2) Application to alternative cost-sharing.--Section 
        1916A(b)(3)(B)(iii) of such Act (42 U.S.C. 1396o-
        1(b)(3)(B)(iii)) is amended by inserting ``, and counseling and 
        pharmacotherapy for cessation of tobacco use by pregnant women 
        (as defined in section 1905(bb))'' after ``complicate the 
        pregnancy''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2010.

SEC. 2103. INCENTIVES FOR HEALTHY LIFESTYLES.

    (a) Initiatives.--
            (1) Establishment.--
                    (A) In general.--The Secretary shall award grants 
                to States to carry out initiatives to provide 
                incentives to Medicaid beneficiaries who--
                            (i) successfully participate in a program 
                        described in paragraph (3); and
                            (ii) upon completion of such participation, 
                        demonstrate changes in health risk and 
                        outcomes, including the adoption and 
                        maintenance of healthy behaviors by meeting 
                        specific targets (as described in subsection 
                        (c)(2)).
                    (B) Purpose.--The purpose of the initiatives under 
                this section is to test approaches that may encourage 
                behavior modification and determine scalable solutions.
            (2) Duration.--
                    (A) Initiation of program; resources.--The 
                Secretary shall awards grants to States beginning on 
                January 1, 2011, or beginning on the date on which the 
                Secretary develops program criteria, whichever is 
                earlier. The Secretary shall develop program criteria 
                for initiatives under this section using relevant 
                evidence-based research and resources, including the 
                Guide to Community Preventive Services, the Guide to 
                Clinical Preventive Services, and the National Registry 
                of Evidence-Based Programs and Practices.
                    (B) Duration of program.--A State awarded a grant 
                to carry out initiatives under this section shall carry 
                out such initiatives within the 5-year period beginning 
                on January 1, 2011, or beginning on the date on which 
                the Secretary develops program criteria, whichever is 
                earlier. Initiatives under this section shall be 
                carried out by a State for a period of not less than 3 
                years.
            (3) Program described.--
                    (A) In general.--A program described in this 
                paragraph is a comprehensive, evidence-based, widely 
                available, and easily accessible program, proposed by 
                the State and approved by the Secretary, that is 
                designed and uniquely suited to address the needs of 
                Medicaid beneficiaries and has demonstrated success in 
                helping individuals achieve one or more of the 
                following:
                            (i) Ceasing use of tobacco products.
                            (ii) Controlling or reducing their weight.
                            (iii) Lowering their cholesterol.
                            (iv) Lowering their blood pressure.
                            (v) Avoiding the onset of diabetes or, in 
                        the case of a diabetic, improving the 
                        management of that condition.
                    (B) Co-morbidities.--A program under this section 
                may also address co-morbidities (including depression) 
                that are related to any of the conditions described in 
                subparagraph (A).
                    (C) Waiver authority.--The Secretary may waive the 
                requirements of sections 1902(a)(1) (relating to 
                statewideness) and 1902(a)(10)(B) (relating to 
                comparability) of the Social Security Act for a State 
                awarded a grant to conduct an initiative under this 
                section and shall ensure that a State makes any program 
                described in subparagraph (A) widely available and 
                accessible to Medicaid beneficiaries in the State.
                    (D) Flexibility in implementation.--A State may 
                enter into arrangements with providers participating in 
                Medicaid, community-based organizations, faith-based 
                organizations, public-private partnerships, Indian 
                tribes, or similar entities or organizations to carry 
                out programs described in subparagraph (A).
            (4) Application.--Following the development of program 
        criteria by the Secretary, a State may submit an application, 
        in such manner and containing such information as the Secretary 
        may require, that shall include a proposal for programs 
        described in paragraph (3)(A) and a plan to make Medicaid 
        beneficiaries and providers participating in Medicaid who 
        reside in the State aware and informed about such programs.
    (b) Education and Outreach Campaign.--
            (1) State awareness.--The Secretary shall conduct an 
        outreach and education campaign to make States aware of the 
        grants under this section.
            (2) Provider and beneficiary education.--A State awarded a 
        grant to conduct an initiative under this section shall conduct 
        an outreach and education campaign to make Medicaid 
        beneficiaries and providers participating in Medicaid who 
        reside in the State aware of the programs described in 
        subsection (a)(3) that are to be carried out by the State under 
        the grant.
    (c) Monitoring.--A State awarded a grant to conduct an initiative 
under this section shall develop and implement a system to--
            (1) monitor Medicaid beneficiary participation in the 
        program and validate changes in health risk and outcomes with 
        clinical data, including the adoption and maintenance of health 
        behaviors by such beneficiaries;
            (2) to the extent practicable, establish standards and 
        health status targets for Medicaid beneficiaries participating 
        in the program and measure the degree to which such standards 
        and targets are met;
            (3) evaluate the effectiveness of the program and provide 
        the Secretary with such evaluations;
            (4) report to the Secretary on processes that have been 
        developed and lessons learned from the program; and
            (5) report on preventive services as part of reporting on 
        quality measures for Medicaid managed care programs.
    (d) Independent Assessments.--
            (1) In general.--The Secretary shall provide for an 
        independent assessment of the initiatives carried out under 
        this section.
            (2) State reporting.--A State awarded a grant to carry out 
        initiatives under this section shall submit reports to the 
        Secretary, on a semi-annual basis, regarding the programs that 
        are supported by the grant funds. Such report shall include 
        information, as specified by the Secretary, regarding--
                    (A) the specific uses of the grant funds;
                    (B) an assessment of program implementation and 
                lessons learned from the programs;
                    (C) an assessment of quality improvements and 
                clinical outcomes under such programs; and
                    (D) estimates of cost savings resulting from such 
                programs.
            (3) Initial report.--Not later than January 1, 2014, the 
        Secretary shall submit to Congress an initial report on such 
        initiatives based on information provided by States through 
        reports required under paragraph (2). The initial report shall 
        include an interim evaluation of the effectiveness of the 
        initiatives carried out with grants awarded under this section 
        and a recommendation regarding whether funding for expanding or 
        extending the initiatives should be extended beyond January 1, 
        2016.
            (4) Final report.--Not later than July 1, 2016, the 
        Secretary shall submit to Congress a final report on the 
        program that includes the results of the independent assessment 
        required under paragraph (1), together with recommendations for 
        such legislation and administrative action as the Secretary 
        determines appropriate.
    (e) No Effect on Eligibility for, or Amount of, Other Benefits.--
Any incentives provided to a Medicaid beneficiary participating in a 
program described in subsection (a)(3) shall not be taken into account 
for purposes of determining the beneficiary's eligibility for, or 
amount of, benefits under any program funded in whole or in part with 
Federal funds.
    (f) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated for the 5-year period beginning on 
January 1, 2011, $100,000,000 to the Secretary to carry out this 
section. Amounts appropriated under this subsection shall remain 
available until expended.
    (g) Definitions.--In this section:
            (1) Medicaid beneficiary.--The term ``Medicaid 
        beneficiary'' means an individual who is eligible for medical 
        assistance under a State plan or waiver under title XIX of the 
        Social Security Act (42 U.S.C. 1396 et seq.) and is enrolled in 
        such plan or waiver.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (3) State.--The term ``State'' has the meaning given that 
        term for purposes of title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).

SEC. 2104. STATE OPTION TO PROVIDE HEALTH HOMES FOR ENROLLEES WITH 
              CHRONIC CONDITIONS.

    (a) State Plan Amendment.--Title XIX of the Social Security Act (42 
U.S.C. 1396a et seq.), as amended by sections 1621, 1640, and 1702(b), 
is amended by adding at the end the following new section:
    ``Sec. 1946. State Option to Provide Coordinated Care Through a 
Health Home for Individuals With Chronic Conditions.--
    ``(a) In General.--Notwithstanding section 1902(a)(1) (relating to 
statewideness), section 1902(a)(10)(B) (relating to comparability), and 
any other provision of this title for which the Secretary determines it 
is necessary to waive in order to implement this section, beginning 
January 1, 2011, a State, at its option as a State plan amendment, may 
provide for medical assistance under this title to eligible individuals 
with chronic conditions who select a designated provider as the 
individual's health home for purposes of providing the individual with 
health home services.
    ``(b) Health Home Qualification Standards.--The Secretary shall 
establish standards for qualification as a designated provider (as 
described under subsection (h)(3)) for the purpose of being eligible to 
be a health home for purposes of this section.
    ``(c) Payments.--
            ``(1) In general.--A State shall provide a designated 
        provider, or a team of health care professionals operating with 
        such a provider, with payments for the provision of health home 
        services to each eligible individual with chronic conditions 
        that selects the provider as the individual's health home. 
        Payments made to a designated provider or a team for such 
        services shall be treated as medical assistance for purposes of 
        section 1903(a), except that, during the first 8 fiscal year 
        quarters that the State plan amendment is in effect, the 
        Federal medical assistance percentage applicable to such 
        payments shall be equal to 90 percent.
            ``(2) Methodology.--
                    ``(A) In general.--The State shall specify in the 
                State plan amendment the methodology the State will use 
                for determining payment for the provision of health 
                home services. Such methodology for determining 
                payment--
                            ``(i) may be tiered to reflect, with 
                        respect to each eligible individual with 
                        chronic conditions provided such services by a 
                        designated provider or a team of health care 
                        professionals operating with such a provider, 
                        the severity or number of each such 
                        individual's chronic conditions or the specific 
                        capabilities of the provider or team; and
                            ``(ii) shall be established consistent with 
                        section 1902(a)(30)(A).
                    ``(B) Alternate models of payment.--The methodology 
                for determining payment for provision of health home 
                services under this section shall not be limited to a 
                per-member per-month basis and may provide (as proposed 
                by the State and subject to approval by the Secretary) 
                for alternate models of payment.
            ``(3) Planning grants.--The Secretary may award planning 
        grants to States for purposes of developing a State plan 
        amendment under this section. A State awarded a planning grant 
        shall contribute an amount equal to the State percentage 
        determined under section 1905(b) (without regard to section 
        5001 of Public Law 111-5) for each fiscal year for which the 
        grant is awarded. The total amount of payments made to States 
        under this paragraph shall not exceed $25,000,000.
    ``(d) Hospital Referrals.--A State shall include in the State plan 
amendment a requirement for hospitals that are participating providers 
under the State plan or a waiver of such plan to establish procedures 
for referring any eligible individuals with chronic conditions who seek 
or need treatment in a hospital emergency department to designated 
providers.
    ``(e) Coordination.--A State shall consult and coordinate, as 
appropriate, with the Substance Abuse and Mental Health Services 
Administration in addressing issues regarding the prevention and 
treatment of mental illness and substance abuse among eligible 
individuals with chronic conditions.
    ``(f) Monitoring.--A State shall include in the State plan 
amendment--
            ``(1) a methodology for tracking avoidable hospital 
        readmissions and calculating savings that result from improved 
        chronic care coordination and management under this section; 
        and
            ``(2) a proposal for use of health information technology 
        in providing health home services under this section and 
        improving service delivery and coordination across the care 
        continuum (including the use of wireless patient technology to 
        improve coordination and management of care and patient 
        adherence to recommendations made by their provider).
    ``(g) Report on Quality Measures.--As a condition for receiving 
payment for health home services provided to an eligible individual 
with chronic conditions, a designated provider shall report to the 
State, in accordance with such requirements as the Secretary shall 
specify, on all applicable measures for determining the quality of such 
services. When appropriate and feasible, a designated provider shall 
use health information technology in providing the State with such 
information.
    ``(h) Definitions.--In this section:
            ``(1) Eligible individual with chronic conditions.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `eligible individual with chronic conditions' 
                means an individual who--
                            ``(i) is eligible for medical assistance 
                        under the State plan or under a waiver of such 
                        plan; and
                            ``(ii) has at least--
                                    ``(I) 2 chronic conditions;
                                    ``(II) 1 chronic condition and is 
                                at risk of having a second chronic 
                                condition; or
                                    ``(III) 1 serious and persistent 
                                mental health condition.
                    ``(B) Rule of construction.--Nothing in this 
                paragraph shall prevent the Secretary from establishing 
                higher levels as to the number or severity of chronic 
                or mental health conditions for purposes of determining 
                eligibility for receipt of health home services under 
                this section.
            ``(2) Chronic condition.--The term `chronic condition' has 
        the meaning given that term by the Secretary and shall include, 
        but is not limited to, the following:
                    ``(A) A mental health condition.
                    ``(B) Substance abuse.
                    ``(C) Asthma.
                    ``(D) Diabetes.
                    ``(E) Heart disease.
                    ``(F) Being overweight, as evidenced by having a 
                Body Mass Index (BMI) over 25.
            ``(3) Designated provider.--The term `designated provider' 
        means a physician, clinical practice or clinical group 
        practice, rural clinic, community health center, community 
        mental health center, home health agency, or any other entity 
        or provider (including pediatricians and obstetricians) that is 
        determined by the State and approved by the Secretary to be 
        qualified to be a health home for eligible individuals with 
        chronic conditions on the basis of documentation evidencing 
        that the physician, practice, or clinic--
                    ``(A) has the systems and infrastructure in place 
                to provide health home services; and
                    ``(B) satisfies the qualification standards 
                established by the Secretary under subsection (b).
            ``(4) Health home.--The term `health home' means a 
        designated provider (including a provider that operates in 
        coordination with a team of health care professionals) selected 
        by an eligible individual with chronic conditions to provide 
        health home services.
            ``(5) Health home services.--
                    ``(A) In general.--The term `health home services' 
                means comprehensive and timely high-quality services 
                described in subparagraph (B) that are provided by a 
                designated provider or a team of health care 
                professionals (as described in subparagraph (C)) 
                operating with such a provider.
                    ``(B) Services described.--The services described 
                in this subparagraph are--
                            ``(i) comprehensive care management;
                            ``(ii) care coordination and health 
                        promotion;
                            ``(iii) comprehensive transitional care, 
                        including appropriate follow-up, from inpatient 
                        to other settings;
                            ``(iv) patient and family support;
                            ``(v) referral to community and social 
                        support services, if relevant; and
                            ``(vi) use of health information technology 
                        to link services, as feasible and appropriate.
                    ``(C) Team of health care professionals 
                described.--A team of health care professionals 
                described in this subparagraph is a team of 
                professionals (as described in the State plan 
                amendment) that may--
                            ``(i) include physicians and other 
                        professionals, such as a nurse care 
                        coordinator, nutritionist, social worker, 
                        behavioral health professional, or any 
                        professionals deemed appropriate by the State; 
                        and
                            ``(ii) be free standing, virtual, or based 
                        at a hospital, community health center, 
                        community mental health center, rural clinic, 
                        clinical practice or clinical group practice, 
                        academic health center, or any entity deemed 
                        appropriate by the State and approved by the 
                        Secretary.''.
    (b) Evaluation.--
            (1) Independent evaluation.--
                    (A) In general.--Not later than January 1, 2013, 
                the Secretary shall enter into a contract with an 
                independent entity or organization to conduct an 
                evaluation and assessment of the States that have 
                elected the option to provide coordinated care through 
                a health home for Medicaid beneficiaries with chronic 
                conditions under section 1946 of the Social Security 
                Act (as added by subsection (a)) for the purpose of 
                determining the effect of such option on reducing 
                hospital admissions, emergency room visits, and 
                admissions to skilled nursing facilities.
                    (B) Evaluation report.--Not later than January 1, 
                2017, the Secretary shall report to Congress on the 
                evaluation and assessment conducted under subparagraph 
                (A).
            (2) Survey and interim report.--
                    (A) In general.--Not later than January 1, 2014, 
                the Secretary of Health and Human Services shall survey 
                States that have elected the option under section 1946 
                of the Social Security Act (as added by subsection (a)) 
                and report to Congress on the nature, extent, and use 
                of such option, particularly as it pertains to--
                            (i) hospital admission rates;
                            (ii) chronic disease management;
                            (iii) coordination of care for individuals 
                        with chronic conditions;
                            (iv) assessment of program implementation;
                            (v) processes and lessons learned (as 
                        described in subparagraph (B));
                            (vi) assessment of quality improvements and 
                        clinical outcomes under such option; and
                            (vii) estimates of cost savings.
                    (B)  Implementation reporting.--A State that has 
                elected the option under section 1946 of the Social 
                Security Act (as added by subsection (a)) shall report 
                to the Secretary, as necessary, on processes that have 
                been developed and lessons learned regarding provision 
                of coordinated care through a health home for Medicaid 
                beneficiaries with chronic conditions under such 
                option.

SEC. 2105. FUNDING FOR CHILDHOOD OBESITY DEMONSTRATION PROJECT.

    Section 1139A(e)(8) of the Social Security Act (42 U.S.C. 1320b-
9a(e)(8)) is amended to read as follows:
            ``(8) Appropriation.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to carry out this 
        subsection, $25,000,000 for the period of fiscal years 2010 
        through 2014.''.

SEC. 2106. PUBLIC AWARENESS OF PREVENTIVE AND OBESITY-RELATED SERVICES.

    (a) Information to States.--The Secretary of Health and Human 
Services shall provide guidance and relevant information to States and 
health care providers regarding preventive and obesity-related services 
that are available to Medicaid enrollees, including obesity screening 
and counseling for children and adults.
    (b) Information to Enrollees.--Each State shall design a public 
awareness campaign to educate Medicaid enrollees regarding availability 
and coverage of such services, with the goal of reducing incidences of 
obesity.
    (c) Report.--Not later than January 1, 2011, and every 3 years 
thereafter through January 1, 2017, the Secretary of Health and Human 
Services shall report to Congress on the status and effectiveness of 
efforts under subsections (a) and (b), including summaries of the 
States' efforts to increase awareness of coverage of 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.

    (a) Program.--
            (1) In general.--Section 1886 of the Social Security Act 
        (42 U.S.C. 1395ww), as amended by section 4102(a) of the HITECH 
        Act (Public Law 111-5), is amended by adding at the end the 
        following new subsection:
    ``(o) Hospital Value-Based Purchasing Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, the Secretary shall 
                establish a hospital value-based purchasing program (in 
                this subsection referred to as the `Program') under 
                which value-based incentive payments are made in a 
                fiscal year to hospitals that meet the performance 
                standards under paragraph (3) for the performance 
                period for such fiscal year (as established under 
                paragraph (4)).
                    ``(B) Program to begin in fiscal year 2013.--The 
                Program shall apply to payments for discharges 
                occurring on or after October 1, 2012.
                    ``(C) Applicability of program to hospitals.--
                            ``(i) In general.--For purposes of this 
                        subsection, subject to clause (ii), the term 
                        `hospital' means a subsection (d) hospital (as 
                        defined in subsection (d)(1)(B)).
                            ``(ii) Exclusions.--The term `hospital' 
                        shall not include, with respect to a fiscal 
                        year, a hospital--
                                    ``(I) that is subject to the 
                                payment reduction under subsection 
                                (b)(3)(B)(viii)(I) for such fiscal 
                                year;
                                    ``(II) for which, during the 
                                performance period for such fiscal 
                                year, the Secretary has cited 
                                deficiencies that pose immediate 
                                jeopardy to the health or safety of 
                                patients;
                                    ``(III) for which there are not a 
                                minimum number (as determined by the 
                                Secretary) of measures that apply to 
                                the hospital for the performance period 
                                for such fiscal year; or
                                    ``(IV) for which there are not a 
                                minimum number (as determined by the 
                                Secretary) of cases for the measures 
                                that apply to the hospital for the 
                                performance period for such fiscal 
                                year.
                            ``(iii) Independent analysis.--For purposes 
                        of determining the minimum numbers under 
                        subclauses (III) and (IV) of clause (ii), the 
                        Secretary shall have conducted an independent 
                        analysis of what numbers are appropriate.
            ``(2) Measures.--
                    ``(A) In general.--The Secretary shall select 
                measures for purposes of the Program. Such measures 
                shall be selected from the measures specified under 
                subsection (b)(3)(B)(viii).
                    ``(B) Requirements.--
                            ``(i) For fiscal year 2013.--For value-
                        based incentive payments made with respect to 
                        discharges occurring during fiscal year 2013, 
                        the Secretary shall ensure the following:
                                    ``(I) Conditions or procedures.--
                                Measures are selected under 
                                subparagraph (A) that cover at least 
                                the following 5 specific conditions or 
                                procedures:
                                            ``(aa) Acute myocardial 
                                        infarction (AMI).
                                            ``(bb) Heart failure.
                                            ``(cc) Pneumonia.
                                            ``(dd) Surgeries, as 
                                        measured by the Surgical Care 
                                        Improvement Project (formerly 
                                        referred to as `Surgical 
                                        Infection Prevention' for 
                                        discharges occurring before 
                                        July 2006).
                                            ``(ee) Healthcare-
                                        associated infections, as 
                                        measured by the prevention 
                                        metrics and targets established 
                                        in the HHS Action Plan to 
                                        Prevent Healthcare-Associated 
                                        Infections (or any successor 
                                        plan) of the Department of 
                                        Health and Human Services.
                                    ``(II) HCAHPS.--Measures selected 
                                under subparagraph (A) shall be related 
                                to the Hospital Consumer Assessment of 
                                Healthcare Providers and Systems survey 
                                (HCAHPS).
                            ``(ii) Inclusion of efficiency measures.--
                        For value-based incentive payments made with 
                        respect to discharges occurring during fiscal 
                        year 2014 or a subsequent fiscal year, the 
                        Secretary shall ensure that measures selected 
                        under subparagraph (A) include efficiency 
                        measures, including measures of `Medicare 
                        spending per beneficiary'. Such measures shall 
                        be adjusted for factors such as age, sex, race, 
                        severity of illness, and other factors that the 
                        Secretary determines appropriate.
                    ``(C) Limitations.--
                            ``(i) Time requirement for prior reporting 
                        and notice.--The Secretary may not select a 
                        measure under subparagraph (A) for use under 
                        the Program with respect to a performance 
                        period for a fiscal year (as established under 
                        paragraph (4)) unless such measure has been 
                        specified under subsection (b)(3)(B)(viii) and 
                        included on the Hospital Compare Internet 
                        website for at least 1 year prior to the 
                        beginning of such performance period.
                            ``(ii) Measure not applicable unless 
                        hospital furnishes services appropriate to the 
                        measure.--A measure selected under subparagraph 
                        (A) shall not apply to a hospital if such 
                        hospital does not furnish services appropriate 
                        to such measure.
                    ``(D) Replacing measures.--Subclause (VI) of 
                subsection (b)(3)(B)(viii) shall apply to measures 
                selected under subparagraph (A) in the same manner as 
                such subclause applies to measures selected under such 
                subsection.
            ``(3) Performance standards.--
                    ``(A) Establishment.--The Secretary shall establish 
                performance standards with respect to measures selected 
                under paragraph (2) for a performance period for a 
                fiscal year (as established under paragraph (4)).
                    ``(B) Achievement and improvement.--The performance 
                standards established under subparagraph (A) shall 
                include levels of achievement and improvement.
                    ``(C) Timing.--The Secretary shall establish and 
                announce the performance standards under subparagraph 
                (A) not later than 60 days prior to the beginning of 
                the performance period for the fiscal year involved.
                    ``(D) Considerations in establishing standards.--In 
                establishing performance standards with respect to 
                measures under this paragraph, the Secretary shall take 
                into account appropriate factors, such as--
                            ``(i) practical experience with the 
                        measures involved, including whether a 
                        significant proportion of hospitals failed to 
                        meet the performance standard during previous 
                        performance periods;
                            ``(ii) historical performance standards;
                            ``(iii) improvement rates; and
                            ``(iv) the opportunity for continued 
                        improvement.
            ``(4) Performance period.--For purposes of the Program, the 
        Secretary shall establish the performance period for a fiscal 
        year. Such performance period shall begin and end prior to the 
        beginning of such fiscal year.
            ``(5) Hospital performance score.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall develop a methodology for assessing the 
                total performance of each hospital based on performance 
                standards with respect to the measures selected under 
                paragraph (2) for a performance period (as established 
                under paragraph (4)). Using such methodology, the 
                Secretary shall provide for an assessment (in this 
                subsection referred to as the `hospital performance 
                score') for each hospital for each performance period.
                    ``(B) Application.--
                            ``(i) Appropriate distribution.--The 
                        Secretary shall ensure that the application of 
                        the methodology developed under subparagraph 
                        (A) results in an appropriate distribution of 
                        value-based incentive payments under paragraph 
                        (6) among hospitals achieving different levels 
                        of hospital performance scores, with hospitals 
                        achieving the highest hospital performance 
                        scores receiving the largest value-based 
                        incentive payments.
                            ``(ii) Higher of achievement or 
                        improvement.--The methodology developed under 
                        subparagraph (A) shall provide that the 
                        hospital performance score is determined using 
                        the higher of its achievement or improvement 
                        score for each measure.
                            ``(iii) Weights.--The methodology developed 
                        under subparagraph (A) shall provide for the 
                        assignment of weights for categories of 
                        measures as the Secretary determines 
                        appropriate.
                            ``(iv) No minimum performance standard.--
                        The Secretary shall not set a minimum 
                        performance standard in determining the 
                        hospital performance score for any hospital.
                            ``(v) Reflection of measures applicable to 
                        the hospital.--The hospital performance score 
                        for a hospital shall reflect the measures that 
                        apply to the hospital.
            ``(6) Calculation of value-based incentive payments.--
                    ``(A) In general.--In the case of a hospital that 
                the Secretary determines meets (or exceeds) the 
                performance standards under paragraph (3) for the 
                performance period for a fiscal year (as established 
                under paragraph (4)), the Secretary shall increase the 
                base operating DRG payment amount (as defined in 
                paragraph (7)(D)), as determined after application of 
                paragraph (7)(B)(i), for a hospital for each discharge 
                occurring in such fiscal year by the value-based 
                incentive payment amount.
                    ``(B) Value-based incentive payment amount.--The 
                value-based incentive payment amount for each discharge 
                of a hospital in a fiscal year shall be equal to the 
                product of--
                            ``(i) the base operating DRG payment amount 
                        (as defined in paragraph (7)(D)) for the 
                        discharge for the hospital for such fiscal 
                        year; and
                            ``(ii) the value-based incentive payment 
                        percentage specified under subparagraph (C) for 
                        the hospital for such fiscal year.
                    ``(C) Value-based incentive payment percentage.--
                            ``(i) In general.--The Secretary shall 
                        specify a value-based incentive payment 
                        percentage for a hospital for a fiscal year.
                            ``(ii) Requirements.--In specifying the 
                        value-based incentive payment percentage for 
                        each hospital for a fiscal year under clause 
                        (i), the Secretary shall ensure that--
                                    ``(I) such percentage is based on 
                                the hospital performance score of the 
                                hospital under paragraph (5); and
                                    ``(II) the total amount of value-
                                based incentive payments under this 
                                paragraph to all hospitals in such 
                                fiscal year is equal to the total 
                                amount available for value-based 
                                incentive payments for such fiscal year 
                                under paragraph (7)(A), as estimated by 
                                the Secretary.
            ``(7) Funding for value-based incentive payments.--
                    ``(A) Amount.--The total amount available for 
                value-based incentive payments under paragraph (6) for 
                all hospitals for a fiscal year shall be equal to the 
                total amount of reduced payments for all hospitals 
                under subparagraph (B) for such fiscal year, as 
                estimated by the Secretary.
                    ``(B) Adjustment to payments.--
                            ``(i) In general.--The Secretary shall 
                        reduce the base operating DRG payment amount 
                        (as defined in subparagraph (D)) for a hospital 
                        for each discharge in a fiscal year (beginning 
                        with fiscal year 2013) by an amount equal to 
                        the applicable percent (as defined in 
                        subparagraph (C)) of the base operating DRG 
                        payment amount for the discharge for the 
                        hospital for such fiscal year. The Secretary 
                        shall make such reductions for all hospitals in 
                        the fiscal year involved, regardless of whether 
                        or not the hospital has been determined by the 
                        Secretary to have earned a value-based 
                        incentive payment under paragraph (6) for such 
                        fiscal year.
                            ``(ii) No effect on other payments.--
                        Payments described in items (aa) and (bb) of 
                        subparagraph (D)(i)(II) for a hospital shall be 
                        determined as if this subsection had not been 
                        enacted.
                    ``(C) Applicable percent defined.--For purposes of 
                subparagraph (B), the term `applicable percent' means--
                            ``(i) with respect to fiscal year 2013, 1.0 
                        percent;
                            ``(ii) with respect to fiscal year 2014, 
                        1.25 percent;
                            ``(iii) with respect to fiscal year 2015, 
                        1.5 percent;
                            ``(iv) with respect to fiscal year 2016, 
                        1.75 percent; and
                            ``(v) with respect to fiscal year 2017 and 
                        succeeding fiscal years, 2 percent.
                    ``(D) Base operating drg payment amount defined.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in this subsection, the term `base 
                        operating DRG payment amount' means, with 
                        respect to a hospital for a fiscal year--
                                    ``(I) the payment amount that would 
                                otherwise be made under subsection (d) 
                                for a discharge if this subsection did 
                                not apply; reduced by
                                    ``(II) any portion of such payment 
                                amount that is attributable to--
                                            ``(aa) payments under 
                                        paragraphs (5)(A), (5)(B), 
                                        (5)(F), and (12) of subsection 
                                        (d); and
                                            ``(bb) such other payments 
                                        under subsection (d) determined 
                                        appropriate by the Secretary.
                            ``(ii) Special rules for certain 
                        hospitals.--
                                    ``(I) Sole community hospitals and 
                                medicare-dependent, small rural 
                                hospitals.--In the case of a medicare-
                                dependent, small rural hospital (with 
                                respect to discharges occurring during 
                                fiscal year 2012 and 2013) or a sole 
                                community hospital, in applying 
                                subparagraph (A)(i), the payment amount 
                                that would otherwise be made under 
                                subsection (d) shall be determined 
                                without regard to subparagraphs (I) and 
                                (L) of subsection (b)(3) and 
                                subparagraphs (D) and (G) of subsection 
                                (d)(5).
                                    ``(II) Hospitals paid under section 
                                1814.--In the case of a hospital that 
                                is paid under section 1814(b)(3), the 
                                term `base operating DRG payment 
                                amount' means the payment amount under 
                                such section.
            ``(8) Announcement of net result of adjustments.--Under the 
        Program, the Secretary shall, not later than 60 days prior to 
        the fiscal year involved, inform each hospital of the 
        adjustments to payments to the hospital for discharges 
        occurring in such fiscal year under paragraphs (6) and 
        (7)(B)(i).
            ``(9) No effect in subsequent fiscal years.--The value-
        based incentive payment under paragraph (6) and the payment 
        reduction under paragraph (7)(B)(i) shall each apply only with 
        respect to the fiscal year involved, and the Secretary shall 
        not take into account such value-based incentive payment or 
        payment reduction in making payments to a hospital under this 
        section in a subsequent fiscal year.
            ``(10) Public reporting.--
                    ``(A) Hospital specific information.--
                            ``(i) In general.--The Secretary shall make 
                        information available to the public regarding 
                        the performance of individual hospitals under 
                        the Program, including--
                                    ``(I) the performance of the 
                                hospital with respect to each measure 
                                that applies to the hospital;
                                    ``(II) the performance of the 
                                hospital with respect to each condition 
                                or procedure; and
                                    ``(III) the hospital performance 
                                score assessing the total performance 
                                of the hospital.
                            ``(ii) Opportunity to review and submit 
                        corrections.--The Secretary shall ensure that a 
                        hospital has the opportunity to review, and 
                        submit corrections for, the information to be 
                        made public with respect to the hospital under 
                        clause (i) prior to such information being made 
                        public.
                            ``(iii) Website.--Such information shall be 
                        posted on the Hospital Compare Internet website 
                        in an easily understandable format.
                    ``(B) Aggregate information.--The Secretary shall 
                periodically post on the Hospital Compare Internet 
                website aggregate information on the Program, 
                including--
                            ``(i) the number of hospitals receiving 
                        value-based incentive payments under paragraph 
                        (6) and the range and total amount of such 
                        value-based incentive payments; and
                            ``(ii) the number of hospitals receiving 
                        less than the maximum value-based incentive 
                        payment available to the hospital for the 
                        fiscal year involved and the range and amount 
                        of such payments.
            ``(11) Implementation.--
                    ``(A) Appeals.--The Secretary shall establish a 
                process by which hospitals may appeal the calculation 
                of a hospital's performance assessment with respect to 
                the performance standards established under paragraph 
                (3)(A) and the hospital performance score under 
                paragraph (5). The Secretary shall ensure that such 
                process provides for resolution of such appeals in a 
                timely manner.
                    ``(B) Limitation on review.--Except as provided in 
                subparagraph (A), there shall be no administrative or 
                judicial review under section 1869, section 1878, or 
                otherwise of the following:
                            ``(i) The methodology used to determine the 
                        amount of the value-based incentive payment 
                        under paragraph (6) and the determination of 
                        such amount.
                            ``(ii) The determination of the amount of 
                        funding available for such value-based 
                        incentive payments under paragraph (7)(A) and 
                        the payment reduction under paragraph 
                        (7)(B)(i).
                            ``(iii) The establishment of the 
                        performance standards under paragraph (3) and 
                        the performance period under paragraph (4).
                            ``(iv) The measures specified under 
                        subsection (b)(3)(B)(viii) and the measures 
                        selected under paragraph (2).
                            ``(v) The methodology developed under 
                        paragraph (5) that is used to calculate 
                        hospital performance scores and the calculation 
                        of such scores.
                            ``(vi) The validation methodology specified 
                        in subsection (b)(3)(B)(viii)(XI).
                    ``(C) Consultation with small hospitals.--The 
                Secretary shall consult with small rural and urban 
                hospitals on the application of the Program to such 
                hospitals.
            ``(12) Promulgation of regulations.--The Secretary shall 
        promulgate regulations to carry out the Program, including the 
        selection of measures under paragraph (2), the methodology 
        developed under paragraph (5) that is used to calculate 
        hospital performance scores, and the methodology used to 
        determine the amount of value-based incentive payments under 
        paragraph (6).''.
            (2) Amendments for reporting of hospital quality 
        information.--Section 1886(b)(3)(B)(viii) of the Social 
        Security Act (42 U.S.C. 1395ww(b)(3)(B)(viii)) is amended--
                    (A) in subclause (II), by adding at the end the 
                following sentence: ``The Secretary may require 
                hospitals to submit data on measures that are not used 
                for the determination of value-based incentive payments 
                under subsection (o).'';
                    (B) in subclause (V), by striking ``beginning with 
                fiscal year 2008'' and inserting ``for fiscal years 
                2008 through 2012'';
                    (C) in subclause (VII), in the first sentence, by 
                striking ``data submitted'' and inserting ``information 
                regarding measures submitted''; and
                    (D) by adding at the end the following new 
                subclauses:
    ``(VIII) Effective for payments beginning with fiscal year 2013, 
with respect to quality measures for outcomes of care, the Secretary 
shall provide for such risk adjustment as the Secretary determines to 
be appropriate to maintain incentives for hospitals to treat patients 
with severe illnesses or conditions.
    ``(IX) Effective for payments beginning with fiscal year 2013, each 
measure specified by the Secretary under this clause shall be endorsed 
under paragraph (1) of section 1890C(f) or used as a result of a 
determination under paragraph (2) of such section.
    ``(X) To the extent practicable, the Secretary shall, with input 
from consensus organizations and other stakeholders, take steps to 
ensure that the measures specified by the Secretary under this clause 
are coordinated and aligned with quality measures applicable to--
            ``(aa) physicians under section 1848(k); and
            ``(bb) other providers of services and suppliers under this 
        title.
    ``(XI) The Secretary shall establish a process to validate measures 
specified under this clause as appropriate. Such process shall include 
the auditing of a number of randomly selected hospitals sufficient to 
ensure validity of the reporting program under this clause as a whole 
and shall provide a hospital with an opportunity to appeal the 
validation of measures reported by such hospital.''.
            (3) Website improvements.--Section 1886(b)(3)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by 
        section 4102(b) of the HITECH Act (Public Law 111-5), is 
        amended by adding at the end the following new clause:
    ``(ix)(I) The Secretary shall develop standard Internet website 
reports tailored to meet the needs of various stakeholders such as 
hospitals, patients, researchers, and policymakers. The Secretary shall 
seek input from such stakeholders in determining the type of 
information that is useful and the formats that best facilitate the use 
of the information.
    ``(II) The Secretary shall modify the Hospital Compare Internet 
website to make the use and navigation of that website readily 
available to individuals accessing it.''.
            (4) GAO study and report.--
                    (A) Study.--The Comptroller General of the United 
                States shall conduct a study on the performance of the 
                hospital value-based purchasing program established 
                under section 1886(o) of the Social Security Act, as 
                added by paragraph (1). Such study shall include an 
                analysis of the impact of such program on--
                            (i) the quality of care furnished to 
                        Medicare beneficiaries, including diverse 
                        Medicare beneficiary populations (such as 
                        diverse in terms of race, ethnicity, and 
                        socioeconomic status);
                            (ii) expenditures under the Medicare 
                        program, including any reduced expenditures 
                        under Part A of title XVIII of such Act that 
                        are attributable to the improvement in the 
                        delivery of inpatient hospital services by 
                        reason of such hospital value-based purchasing 
                        program;
                            (iii) the quality performance among safety 
                        net hospitals and any barriers such hospitals 
                        face in meeting the performance standards 
                        applicable under such hospital value-based 
                        purchasing program; and
                            (iv) the quality performance among small 
                        rural and small urban hospitals and any 
                        barriers such hospitals face in meeting the 
                        performance standards applicable under such 
                        hospital value-based purchasing program.
                    (B) Reports.--
                            (i) Interim report.--Not later than October 
                        1, 2015, the Comptroller General of the United 
                        States shall submit to Congress an interim 
                        report containing the results of the study 
                        conducted under subparagraph (A), together with 
                        recommendations for such legislation and 
                        administrative action as the Comptroller 
                        General determines appropriate.
                            (ii) Final report.--Not later than July 1, 
                        2017, the Comptroller General of the United 
                        States shall submit to Congress a report 
                        containing the results of the study conducted 
                        under subparagraph (A), together with 
                        recommendations for such legislation and 
                        administrative action as the Comptroller 
                        General determines appropriate.
            (5) HHS study and report.--
                    (A) Study.--The Secretary of Health and Human 
                Services shall conduct a study on the performance of 
                the hospital value-based purchasing program established 
                under section 1886(o) of the Social Security Act, as 
                added by paragraph (1). Such study shall include an 
                analysis--
                            (i) of ways to improve the hospital value-
                        based purchasing program and ways to address 
                        any unintended consequences that may occur as a 
                        result of such program;
                            (ii) of whether the hospital value-based 
                        purchasing program resulted in lower spending 
                        under the Medicare program under title XVIII of 
                        such Act or other financial savings to 
                        hospitals;
                            (iii) the appropriateness of the Medicare 
                        program sharing in any savings generated 
                        through the hospital value-based purchasing 
                        program; and
                            (iv) any other area determined appropriate 
                        by the Secretary.
                    (B) Report.--Not later than January 1, 2016, the 
                Secretary of Health and Human Services shall submit to 
                Congress a report containing the results of the study 
                conducted under subparagraph (A), together with 
                recommendations for such legislation and administrative 
                action as the Secretary determines appropriate.
    (b) Value-Based Purchasing Demonstration Programs.--
            (1) Value-based purchasing demonstration program for 
        inpatient critical access hospitals.--
                    (A) Establishment.--
                            (i) In general.--Not later than 2 years 
                        after the date of enactment of this Act, the 
                        Secretary of Health and Human Services (in this 
                        subsection referred to as the ``Secretary'') 
                        shall establish a demonstration program under 
                        which the Secretary establishes a value-based 
                        purchasing program under the Medicare program 
                        under title XVIII of the Social Security Act 
                        for critical access hospitals (as defined in 
                        paragraph (1) of section 1861(mm) of such Act 
                        (42 U.S.C. 1395x(mm))) with respect to 
                        inpatient critical access hospital services (as 
                        defined in paragraph (2) of such section) in 
                        order to test innovative methods of measuring 
                        and rewarding quality health care furnished by 
                        such hospitals.
                            (ii) Duration.--The demonstration program 
                        under this paragraph shall be conducted for a 
                        3-year period.
                            (iii) Sites.--The Secretary shall conduct 
                        the demonstration program under this paragraph 
                        at an appropriate number (as determined by the 
                        Secretary) of critical access hospitals. The 
                        Secretary shall ensure that such hospitals are 
                        representative of the spectrum of such 
                        hospitals that participate in the Medicare 
                        program.
                    (B) Waiver authority.--The Secretary may waive such 
                requirements of titles XI and XVIII of the Social 
                Security Act as may be necessary to carry out the 
                demonstration program under this paragraph.
                    (C) Report.--Not later than 18 months after the 
                completion of the demonstration program under this 
                paragraph, the Secretary shall submit to Congress a 
                report on the demonstration program together with--
                            (i) recommendations on the establishment of 
                        a permanent value-based purchasing program 
                        under the Medicare program for critical access 
                        hospitals with respect to inpatient critical 
                        access hospital services; and
                            (ii) recommendations for such other 
                        legislation and administrative action as the 
                        Secretary determines appropriate.
            (2) Value-based purchasing demonstration program for 
        hospitals excluded from hospital value-based purchasing program 
        as a result of insufficient numbers of measures and cases.--
                    (A) Establishment.--
                            (i) In general.--Not later than 2 years 
                        after the date of enactment of this Act, the 
                        Secretary shall establish a demonstration 
                        program under which the Secretary establishes a 
                        value-based purchasing program under the 
                        Medicare program under title XVIII of the 
                        Social Security Act for applicable hospitals 
                        (as defined in clause (ii)) with respect to 
                        inpatient hospital services (as defined in 
                        section 1861(b) of the Social Security Act (42 
                        U.S.C. 1395x(b))) in order to test innovative 
                        methods of measuring and rewarding quality 
                        health care furnished by such hospitals.
                            (ii) Applicable hospital defined.--For 
                        purposes of this paragraph, the term 
                        ``applicable hospital'' means a hospital 
                        described in subclause (III) or (IV) of section 
                        1886(o)(1)(C)(ii) of the Social Security Act, 
                        as added by subsection (a)(1).
                            (iii) Duration.--The demonstration program 
                        under this paragraph shall be conducted for a 
                        3-year period.
                            (iv) Sites.--The Secretary shall conduct 
                        the demonstration program under this paragraph 
                        at an appropriate number (as determined by the 
                        Secretary) of applicable hospitals. The 
                        Secretary shall ensure that such hospitals are 
                        representative of the spectrum of such 
                        hospitals that participate in the Medicare 
                        program.
                    (B) Waiver authority.--The Secretary may waive such 
                requirements of titles XI and XVIII of the Social 
                Security Act as may be necessary to carry out the 
                demonstration program under this paragraph.
                    (C) Report.--Not later than 18 months after the 
                completion of the demonstration program under this 
                paragraph, the Secretary shall submit to Congress a 
                report on the demonstration program together with--
                            (i) recommendations on the establishment of 
                        a permanent value-based purchasing program 
                        under the Medicare program for applicable 
                        hospitals with respect to inpatient hospital 
                        services; and
                            (ii) recommendations for such other 
                        legislation and administrative action as the 
                        Secretary determines appropriate.

SEC. 3002. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING SYSTEM.

    (a) Extension.--Section 1848(m) of the Social Security Act (42 
U.S.C. 1395w-4(m)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i), by striking ``2010'' and inserting 
                ``2012''; and
                    (B) in subparagraph (B)--
                            (i) in clause (i), by striking ``and'' at 
                        the end;
                            (ii) in clause (ii), by striking the period 
                        at the end and inserting a semicolon; and
                            (iii) by adding at the end the following 
                        new clauses:
                            ``(iii) for 2011, 1.0 percent; and
                            ``(iv) for 2012, 0.5 percent.'';
            (2) in paragraph (3)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i), by inserting ``(or, for purposes of 
                subsection (a)(8), for the quality reporting period for 
                the year)'' after ``reporting period''; and
                    (B) in subparagraph (C)(i), by inserting ``, or, 
                for purposes of subsection (a)(8), for a quality 
                reporting period for the year'' after ``(a)(5), for a 
                reporting period for a year'';
            (3) in paragraph (5)(E)(iv), by striking ``subsection 
        (a)(5)(A)'' and inserting ``paragraphs (5)(A) and (8)(A) of 
        subsection (a)''; and
            (4) in paragraph (6)(C)--
                    (A) in clause (i)(II), by striking ``, 2009, 2010, 
                and 2011'' and inserting ``and subsequent years''; and
                    (B) in clause (iii)--
                            (i) by inserting ``(a)(8)'' after 
                        ``(a)(5)''; and
                            (ii) by striking ``under subparagraph 
                        (D)(iii) of such subsection'' and inserting 
                        ``under subsection (a)(5)(D)(iii) or the 
                        quality reporting period under subsection 
                        (a)(8)(D)(iii), respectively''.
    (b) Incentive Payment Adjustment for Quality Reporting.--Section 
1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)) is amended by 
adding at the end the following new paragraph:
            ``(8) Incentives for quality reporting.--
                    ``(A) Adjustment.--
                            ``(i) In general.--With respect to covered 
                        professional services furnished by an eligible 
                        professional during 2013 or any subsequent 
                        year, if the eligible professional does not 
                        satisfactorily submit data on quality measures 
                        for covered professional services for the 
                        quality reporting period for the year (as 
                        determined under subsection (m)(3)(A)), the fee 
                        schedule amount for such services furnished by 
                        such professional during the year (including 
                        the fee schedule amount for purposes of 
                        determining a payment based on such amount) 
                        shall be equal to the applicable percent of the 
                        fee schedule amount that would otherwise apply 
                        to such services under this subsection 
                        (determined after application of paragraphs 
                        (3), (5), and (7), but without regard to this 
                        paragraph).
                            ``(ii) Applicable percent.--For purposes of 
                        clause (i), the term `applicable percent' 
                        means--
                                    ``(I) for 2013, 98.5 percent; and
                                    ``(II) for 2014 and each subsequent 
                                year, 98 percent.
                    ``(B) Application.--
                            ``(i) Physician reporting system rules.--
                        Paragraphs (5), (6), and (8) of subsection (k) 
                        shall apply for purposes of this paragraph in 
                        the same manner as they apply for purposes of 
                        such subsection.
                            ``(ii) Incentive payment validation 
                        rules.--Clauses (ii) and (iii) of subsection 
                        (m)(5)(D) shall apply for purposes of this 
                        paragraph in a similar manner as they apply for 
                        purposes of such subsection.
                    ``(C) Definitions.--For purposes of this paragraph:
                            ``(i) Eligible professional; covered 
                        professional services.--The terms `eligible 
                        professional' and `covered professional 
                        services' have the meanings given such terms in 
                        subsection (k)(3).
                            ``(ii) Physician reporting system.--The 
                        term `physician reporting system' means the 
                        system established under subsection (k).
                            ``(iii) Quality reporting period.--The term 
                        `quality reporting period' means, with respect 
                        to a year, a period specified by the 
                        Secretary.''.
    (c) Additional Mechanism for Determining Satisfactory and 
Successful Reporting.--Section 1848(m)(3) of the Social Security Act 
(42 U.S.C. 1395w-4(m)(3)) is amended by adding at the end the following 
new subparagraph:
                    ``(E) Additional mechanism for satisfactory and 
                successful reporting of measures.--
                            ``(i) In general.--Not later than January 
                        1, 2011, the Secretary shall establish and have 
                        in place a process under which an eligible 
                        professional shall be treated as satisfactorily 
                        submitting data on quality measures under 
                        subparagraph (A) and as meeting the requirement 
                        described in subparagraph (B)(ii) for covered 
                        professional services for reporting periods for 
                        2 consecutive years (or, for purposes of 
                        subsection (a)(5), for reporting periods for 2 
                        consecutive years, or, for purposes of 
                        subsection (a)(8), for quality reporting 
                        periods for 2 consecutive years) if, during the 
                        reporting period of the first of such years, 
                        the eligible professional--
                                    ``(I) participates in a program 
                                described in clause (ii); and
                                    ``(II) completes a qualified MOC 
                                practice assessment.
                            ``(ii) Program described.--A program 
                        described in this clause is a qualified 
                        American Board of Medical Specialties 
                        Maintenance of Certification program (commonly 
                        referred to as a `Maintenance of Certification 
                        program' or `MOC') or an equivalent program (as 
                        determined by the Secretary) that--
                                    ``(I) satisfactorily submits data 
                                through the mechanism described in 
                                subsection (k)(4) on quality measures 
                                under subparagraph (A) with respect to 
                                the eligible professional for the 
                                reporting period for the first year of 
                                such 2 consecutive years (as determined 
                                as determined by the Secretary); and
                                    ``(II) submits to the Secretary (in 
                                accordance with procedures established 
                                by the Secretary under clause (iv)(II)) 
                                the information described in clause 
                                (iv)(I).
                            ``(iii) Qualified moc practice 
                        assessment.--For purposes of clauses (i)(II), 
                        the term `qualified MOC practice assessment' 
                        means an assessment of a physician's practice 
                        that includes an initial assessment of an 
                        eligible professional's practice, is designed 
                        to demonstrate the eligible professional's use 
                        of evidence-based medicine, and would seek to 
                        improve quality of care through follow-up 
                        assessments.
                            ``(iv) Information described and 
                        establishment of procedures.--
                                    ``(I) Information described.--The 
                                information described in this subclause 
                                is the methods, measures, and data used 
                                under a program described in clause 
                                (ii) or a qualified MOC practice 
                                assessment under clause (iii).
                                    ``(II) Procedures.--The Secretary, 
                                in consultation with programs described 
                                in clause (ii), shall establish 
                                procedures for the submission of 
                                information under clause (ii). Such 
                                procedures shall ensure that the 
                                information described in subclause (I) 
                                allows for innovation and 
                                appropriateness with respect to the 
                                specialty of the eligible 
                                professional.''.
    (d) Integration of Physician Quality Reporting and EHR Reporting.--
Section 1848(m) of the Social Security Act (42 U.S.C. 1395w-4(m)) is 
amended by adding at the end the following new paragraph:
            ``(7) Integration of physician quality reporting and ehr 
        reporting.--Not later than January 1, 2012, the Secretary shall 
        develop a plan to integrate reporting on quality measures under 
        this subsection with reporting requirements under subsection 
        (o) relating to the meaningful use of electronic health 
        records. Such integration shall consist of the following:
                    ``(A) The selection of measures, the reporting of 
                which would both demonstrate--
                            ``(i) meaningful use of an electronic 
                        health record for purposes of subsection (o); 
                        and
                            ``(ii) quality of care furnished to an 
                        individual.
                    ``(B) Such other activities as specified by the 
                Secretary.''.
    (e) Feedback.--Section 1848(m)(5) of the Social Security Act (42 
U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Feedback.--The Secretary shall provide timely 
                feedback to eligible professionals on the performance 
                of the eligible professional with respect to 
                satisfactorily submitting data on quality measures 
                under this subsection.''.
    (f) Appeals.--Such section is further amended--
            (1) in subparagraph (E), by striking ``There shall'' and 
        inserting ``Except as provided in subparagraph (I), there 
        shall''; and
            (2) by adding at the end the following new subparagraph:
                    ``(I) Informal appeals process.--The Secretary 
                shall, by not later than January 1, 2011, establish and 
                have in place an informal process for eligible 
                professionals to seek a review of the determination 
                that an eligible professional did not satisfactorily 
                submit data on quality measures under this 
                subsection.''.

SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM.

    (a) Improvements.--
            (1) In general.--Section 1848(n) of the Social Security Act 
        (42 U.S.C. 1395w-4(n)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) by striking ``general.--The 
                                Secretary'' and inserting ``general.--
                            ``(i) Establishment.--The Secretary'';
                                    (II) in clause (i), as added by 
                                clause (i), by striking ``the 
                                `Program')'' and all that follows 
                                through the period at the end of the 
                                second sentence and inserting ``the 
                                `Program').''; and
                                    (III) by adding at the end the 
                                following new clauses:
                            ``(ii) Reports on resources.--The Secretary 
                        shall use claims data under this title (and may 
                        use other data) to provide confidential reports 
                        to physicians (and, as determined appropriate 
                        by the Secretary, to groups of physicians) that 
                        measure the resources involved in furnishing 
                        care to individuals under this title.
                            ``(iii) Inclusion of certain information.--
                        If determined appropriate by the Secretary, the 
                        Secretary may include information on the 
                        quality of care furnished to individuals under 
                        this title by the physician (or group of 
                        physicians) in such reports.''; and
                            (ii) in subparagraph (B), by striking 
                        ``subparagraph (A)'' and inserting 
                        ``subparagraph (A)(ii)'';
                    (B) in paragraph (4)--
                            (i) in the heading, by inserting 
                        ``initial'' after ``focus''; and
                            (ii) in the matter preceding subparagraph 
                        (A), by inserting ``initial'' after ``focus 
                        the'';
                    (C) in paragraph (6), by adding at the end the 
                following new sentence: ``For adjustments for reports 
                on utilization under paragraph (9), see subparagraph 
                (D) of such paragraph.''; and
                    (D) by adding at the end the following new 
                paragraphs:
            ``(9) Reports on utilization.--
                    ``(A) Development of episode grouper.--
                            ``(i) In general.--The Secretary shall 
                        develop an episode grouper that combines 
                        separate but clinically related items and 
                        services into an episode of care for an 
                        individual, as appropriate.
                            ``(ii) Timeline for development.--The 
                        episode grouper described in subparagraph (A) 
                        shall be developed by not later than January 1, 
                        2012.
                            ``(iii) Public availability.--The Secretary 
                        shall make the details of the episode grouper 
                        described in subparagraph (A) available to the 
                        public.
                            ``(iv) Endorsement.--The Secretary shall 
                        seek endorsement of the episode grouper 
                        described in subparagraph (A) by the entity 
                        with a contract under section 1890(a).
                    ``(B) Reports on utilization.--Effective beginning 
                with 2012, the Secretary shall provide reports to 
                physicians that compare, as determined appropriate by 
                the Secretary, patterns of resource use of the 
                individual physician to such patterns of other 
                physicians.
                    ``(C) Analysis of data.--The Secretary shall, for 
                purposes of preparing reports under this paragraph, 
                establish methodologies as appropriate, such as to--
                            ``(i) attribute episodes of care, in whole 
                        or in part, to physicians;
                            ``(ii) identify appropriate physicians for 
                        purposes of comparison under subparagraph (B); 
                        and
                            ``(iii) aggregate episodes of care 
                        attributed to a physician under clause (i) into 
                        a composite measure per individual.
                    ``(D) Data adjustment.--In preparing reports under 
                this paragraph, the Secretary shall make appropriate 
                adjustments, including adjustments--
                            ``(i) to account for differences in socio-
                        economic and demographic characteristics, 
                        ethnicity, and health status of individuals 
                        (such as to recognize that less healthy 
                        individuals may require more intensive 
                        interventions); and
                            ``(ii) to eliminate the effect of 
                        geographic adjustments in payment rates (as 
                        described in subsection (e)).
                    ``(E) Public availability of methodology.--The 
                Secretary shall make available to the public--
                            ``(i) the methodologies established under 
                        subparagraph (C);
                            ``(ii) information regarding any 
                        adjustments made to data under subparagraph 
                        (D); and
                            ``(iii) aggregate reports with respect to 
                        physicians.
                    ``(F) Definition of physician.--In this paragraph:
                            ``(i) In general.--The term `physician' has 
                        the meaning given that term in section 
                        1861(r)(1).
                            ``(ii) Treatment of groups.--Such term 
                        includes, as the Secretary determines 
                        appropriate, a group of physicians.
                    ``(G) Limitations on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise or otherwise of the 
                establishment of the methodology under subparagraph 
                (C), including the determination of an episode of care 
                under such methodology.
            ``(10) Coordination with other value-based purchasing 
        reforms.--The Secretary shall coordinate the Program with the 
        value-based payment modifier established under subsection (p) 
        and, as the Secretary determines appropriate, other similar 
        provisions of this title.''.
            (2) Conforming amendment.--Section 1890(b) of the Social 
        Security Act (42 U.S.C. 1395aaa(b)) is amended by adding at the 
        end the following new paragraph:
            ``(6) Review and endorsement of episode grouper under the 
        physician feedback program.--The entity shall provide for the 
        review and, as appropriate, the endorsement of the episode 
        grouper developed by the Secretary under section 1848(n)(9)(A). 
        Such review shall be conducted on an expedited basis.''.
    (b) Incentives for Avoiding Excess Utilization.--Section 1848(a) of 
the Social Security Act (42 U.S.C. 1395w-4(a)), as amended by section 
3002(b), is amended by adding at the end the following new paragraph:
            ``(9) Incentive for avoiding excess utilization.--
                    ``(A) In general.--With respect to physicians' 
                services furnished by an applicable physician on or 
                after January 1, 2014, the fee schedule amount for such 
                services furnished by the applicable physician during 
                the year (including the fee schedule amount for 
                purposes of determining a payment based on such amount) 
                shall be 95 percent of the fee schedule amount that 
                would otherwise apply to such services under this 
                subsection (determined after application of paragraphs 
                (3), (5), (7), and (8), but without regard to this 
                paragraph).
                    ``(B) Applicable physician.--In this paragraph:
                            ``(i) In general.--The term `applicable 
                        physician' means a physician which the 
                        Secretary determines is at or above the 90th 
                        percentile of resource use (or, if applicable, 
                        the standard measure of utilization specified 
                        under subparagraph (C)) with respect to a 
                        composite measure per individual, such as the 
                        composite measure under the methodology 
                        established under subsection (n)(9)(C)(iii).
                            ``(ii) Definition of physician.--In this 
                        paragraph:
                                    ``(I) In general.--The term 
                                `physician' has the meaning given that 
                                term in section 1861(r)(1).
                                    ``(II) Treatment of groups.--Such 
                                term includes, as the Secretary 
                                determines appropriate, a group of 
                                physicians.
                    ``(C) Authority to revise standard measure of 
                resource use for determining applicable physicians.--
                With respect to physicians' services furnished by an 
                applicable physician on or after January 1, 2020, the 
                Secretary may substitute a standard measure of resource 
                use, such as deviation from the national mean, (as 
                specified by the Secretary) for the percentile of 
                resource use described in subparagraph (B)(i).
                    ``(D) Reporting period.--In this paragraph, the 
                term `reporting period' means a period specified by the 
                Secretary.
                    ``(E) Limitations on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise or otherwise of--
                            ``(i) the determination of any incentive 
                        payment under subparagraph (A);
                            ``(ii) the determination of who is an 
                        applicable physician under subparagraph (B)(i), 
                        including the specification and application of 
                        the standard measure of utilization under 
                        subparagraph (C); and
                            ``(iii) the specification of the reporting 
                        period under subparagraph (D).''.

SEC. 3004. QUALITY REPORTING FOR LONG-TERM CARE HOSPITALS, INPATIENT 
              REHABILITATION HOSPITALS, AND HOSPICE PROGRAMS.

    (a) Long-term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U. S.C. 1395ww(m)), as amended by section 3401(c), is 
amended by adding at the end the following new paragraph:
            ``(5) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                Under the system described in paragraph (1), for rate 
                year 2014 and each subsequent rate year, in the case of 
                a long-term care hospital that does not submit data to 
                the Secretary in accordance with subparagraph (C) with 
                respect to such a rate year, the update for payments 
                for discharges occurring during such rate year shall be 
                reduced by 2 percentage points.
                    ``(B) Noncumulative application.--Any reduction 
                under subparagraph (A) shall apply only with respect to 
                the rate year involved and the Secretary shall not take 
                into account such reduction in computing the payment 
                amount under the system described in paragraph (1) for 
                a subsequent rate year.
                    ``(C) Submission of quality data.--For rate year 
                2014 and each subsequent rate year, each long-term care 
                hospital shall submit to the Secretary data on quality 
                measures specified under subparagraph (D). Such data 
                shall be submitted in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                subparagraph.
                    ``(D) Quality measures.--
                            ``(i) In general.--The quality measures 
                        specified under this subparagraph shall be such 
                        measures selected by the Secretary from 
                        measures that have been endorsed under 
                        paragraph (1) of section 1890C(f) or used as a 
                        result of a determination under paragraph (2) 
                        of such section.
                            ``(ii) Time frame.--Not later than October 
                        1, 2012, the Secretary shall publish the 
                        measures selected under this subparagraph that 
                        will be applicable with respect to rate year 
                        2014.
                    ``(E) Public availability of data submitted.--The 
                Secretary shall establish procedures for making data 
                submitted under subparagraph (C) available to the 
                public. Such procedures shall ensure that a long-term 
                care hospital has the opportunity to review the data 
                that is to be made public with respect to the hospital 
                prior to such data being made public. The Secretary 
                shall report quality measures that relate to services 
                furnished in inpatient settings in long-term care 
                hospitals on the Internet website of the Centers for 
                Medicare & Medicaid Services.''.
    (b) Inpatient Rehabilitation Hospitals.--Section 1886(j) of the 
Social Security Act (42 U.S.C. 1395ww(j)) is amended--
            (1) by redesignating paragraph (7) as paragraph (8); and
            (2) by inserting after paragraph (6) the following new 
        paragraph:
            ``(7) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                For purposes of fiscal year 2014 and each subsequent 
                fiscal year, in the case of a rehabilitation facility 
                that does not submit data to the Secretary in 
                accordance with subparagraph (C) with respect to such a 
                fiscal year, the increase factor to be applied under 
                paragraph (3)(C) for payments for discharges occurring 
                during such fiscal year shall be reduced by 2 
                percentage points.
                    ``(B) Noncumulative application.--Any reduction 
                under subparagraph (A) shall apply only with respect to 
                the fiscal year involved and the Secretary shall not 
                take into account such reduction in computing the 
                payment amount under this subsection for a subsequent 
                fiscal year.
                    ``(C) Submission of quality data.--For fiscal year 
                2014 and each subsequent rate year, each rehabilitation 
                facility shall submit to the Secretary data on quality 
                measures specified under subparagraph (D). Such data 
                shall be submitted in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                subparagraph.
                    ``(D) Quality measures.--
                            ``(i) In general.--The quality measures 
                        specified under this subparagraph shall be such 
                        measures selected by the Secretary from 
                        measures that have been endorsed under 
                        paragraph (1) of section 1890C(f) or used as a 
                        result of a determination under paragraph (2) 
                        of such section.
                            ``(ii) Time frame.--Not later than October 
                        1, 2012, the Secretary shall publish the 
                        measures selected under this subparagraph that 
                        will be applicable with respect to fiscal year 
                        2014.
                    ``(E) Public availability of data submitted.--The 
                Secretary shall establish procedures for making data 
                submitted under subparagraph (C) available to the 
                public. Such procedures shall ensure that a 
                rehabilitation facility has the opportunity to review 
                the data that is to be made public with respect to the 
                facility prior to such data being made public. The 
                Secretary shall report quality measures that relate to 
                services furnished in inpatient settings in 
                rehabilitation facilities on the Internet website of 
                the Centers for Medicare & Medicaid Services.''.
    (c) Hospice Programs.--Section 1814(i) of the Social Security Act 
(42 U.S.C. 1395f(i)) is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                For purposes of fiscal year 2014 and each subsequent 
                fiscal year, in the case of a hospice program that does 
                not submit data to the Secretary in accordance with 
                subparagraph (C) with respect to such a fiscal year, 
                the market basket percentage increase to be applied 
                under clause (ii) or (iii) of paragraph (1)(C), as 
                applicable, for payments for routine home care and 
                other services included in hospice care furnished 
                during such fiscal year shall be reduced by 2 
                percentage points.
                    ``(B) Noncumulative application.--Any reduction 
                under subparagraph (A) shall apply only with respect to 
                the fiscal year involved and the Secretary shall not 
                take into account such reduction in computing the 
                payment amount under this subsection for a subsequent 
                fiscal year.
                    ``(C) Submission of quality data.--For fiscal year 
                2014 and each subsequent fiscal year, each hospice 
                program shall submit to the Secretary data on quality 
                measures specified under subparagraph (D). Such data 
                shall be submitted in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                subparagraph.
                    ``(D) Quality measures.--
                            ``(i) In general.--The quality measures 
                        specified under this subparagraph shall be such 
                        measures selected by the Secretary from 
                        measures that have been endorsed under 
                        paragraph (1) of section 1890C(f) or used as a 
                        result of a determination under paragraph (2) 
                        of such section.
                            ``(ii) Time frame.--Not later than October 
                        1, 2012, the Secretary shall publish the 
                        measures selected under this subparagraph that 
                        will be applicable with respect to fiscal year 
                        2014.
                    ``(E) Public availability of data submitted.--The 
                Secretary shall establish procedures for making data 
                submitted under subparagraph (C) available to the 
                public. Such procedures shall ensure that a hospice 
                program has the opportunity to review the data that is 
                to be made public with respect to the hospice program 
                prior to such data being made public. The Secretary 
                shall report quality measures that relate to hospice 
                care provided by hospice programs on the Internet 
                website of the Centers for Medicare & Medicaid 
                Services.''.

SEC. 3005. QUALITY REPORTING FOR PPS-EXEMPT CANCER HOSPITALS.

    Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is 
amended--
            (1) in subsection (a)(1)--
                    (A) in subparagraph (U), by striking ``and'' at the 
                end;
                    (B) in subparagraph (V), by striking the period at 
                the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(W) in the case of a hospital described in 
                section 1886(d)(1)(B)(v), to report quality data to the 
                Secretary in accordance with subsection (k).''; and
            (2) by adding at the end the following new subsection:
    ``(k) Quality Reporting by Cancer Hospitals.--
            ``(1) In general.--For purposes of fiscal year 2014 and 
        each subsequent fiscal year, a hospital described in section 
        1886(d)(1)(B)(v) shall submit data to the Secretary in 
        accordance with paragraph (2) with respect to such a fiscal 
        year.
            ``(2) Submission of quality data.--For fiscal year 2014 and 
        each subsequent fiscal year, each hospital described in such 
        section shall submit to the Secretary data on quality measures 
        specified under paragraph (3). Such data shall be submitted in 
        a form and manner, and at a time, specified by the Secretary 
        for purposes of this subparagraph.
            ``(3) Quality measures.--
                    ``(A) In general.--The quality measures specified 
                under this subparagraph shall be such measures selected 
                by the Secretary from measures that have been endorsed 
                under paragraph (1) of section 1890C(f) or used as a 
                result of a determination under paragraph (2) of such 
                section.
                    ``(C) Time frame.--Not later than October 1, 2012, 
                the Secretary shall publish the measures selected under 
                this paragraph that will be applicable with respect to 
                fiscal year 2014.
            ``(4) Public availability of data submitted.--The Secretary 
        shall establish procedures for making data submitted under 
        paragraph (4) available to the public. Such procedures shall 
        ensure that a hospital described in section 1886(d)(1)(B)(v) 
        has the opportunity to review the data that is to be made 
        public with respect to the hospital prior to such data being 
        made public. The Secretary shall report quality measures of 
        process, structure, outcome, patients' perspective on care, 
        efficiency, and costs of care that relate to services furnished 
        in such hospitals on the Internet website of the Centers for 
        Medicare & Medicaid Services.''.

SEC. 3006. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR SKILLED 
              NURSING FACILITIES AND HOME HEALTH AGENCIES.

    (a) Skilled Nursing Facilities.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        develop a plan to implement a value-based purchasing program 
        for payments under the Medicare program under title XVIII of 
        the Social Security Act for skilled nursing facilities (as 
        defined in section 1819(a) of such Act (42 U.S.C. 1395i-3(a))).
            (2) Details.--In developing the plan under paragraph (1), 
        the Secretary shall consider the following issues:
                    (A) The ongoing development, selection, and 
                modification process for measures (as selected from 
                measures that are endorsed under paragraph (1) of 
                section 1890C(f) or used as a result of a determination 
                under paragraph (2) of such section), to the extent 
                feasible and practicable, of all dimensions of quality 
                and efficiency in skilled nursing facilities.
                    (B) The reporting, collection, and validation of 
                quality data.
                    (C) The structure of value-based payment 
                adjustments, including the determination of thresholds 
                or improvements in quality that would substantiate a 
                payment adjustment, the size of such payments, and the 
                sources of funding for the value-based bonus payments.
                    (D) Methods for the public disclosure of 
                information on the performance of skilled nursing 
                facilities.
                    (E) Any other issues determined appropriate by the 
                Secretary.
            (3) Consultation.--In developing the plan under paragraph 
        (1), the Secretary shall--
                    (A) consult with relevant affected parties; and
                    (B) consider experience with such demonstrations 
                that the Secretary determines are relevant to the 
                value-based purchasing program described in paragraph 
                (1).
            (4) Report to congress.--Not later than October 1, 2011, 
        the Secretary shall submit to Congress a report containing the 
        plan developed under paragraph (1).
    (b) Home Health Agencies.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        develop a plan to implement a value-based purchasing program 
        for payments under the Medicare program under title XVIII of 
        the Social Security Act for home health agencies (as defined in 
        section 1861(o) of such Act (42 U.S.C. 1395x(o))).
            (2) Details.--In developing the plan under paragraph (1), 
        the Secretary shall consider the following issues:
                    (A) The ongoing development, selection, and 
                modification process for measures (as selected from 
                measures that are endorsed under paragraph (1) of 
                section 1890C(f) or used as a result of a determination 
                under paragraph (2) of such section), to the extent 
                feasible and practicable, of all dimensions of quality 
                and efficiency in home health agencies.
                    (B) The reporting, collection, and validation of 
                quality data.
                    (C) The structure of value-based payment 
                adjustments, including the determination of thresholds 
                or improvements in quality that would substantiate a 
                payment adjustment, the size of such payments, and the 
                sources of funding for the value-based bonus payments.
                    (D) Methods for the public disclosure of 
                information on the performance of home health agencies.
                    (E) Any other issues determined appropriate by the 
                Secretary.
            (3) Consultation.--In developing the plan under paragraph 
        (1), the Secretary shall--
                    (A) consult with relevant affected parties; and
                    (B) consider experience with such demonstrations 
                that the Secretary determines are relevant to the 
                value-based purchasing program described in paragraph 
                (1).
            (4) Report to congress.--Not later than October 1, 2010, 
        the Secretary shall submit to Congress a report containing the 
        plan developed under paragraph (1).

SEC. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN FEE 
              SCHEDULE.

    Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is 
amended--
            (1) in subsection (b)(1), by inserting ``subject to 
        subsection (p),'' after ``1998,''.
            (2) by adding at the end the following new subsection:
    ``(p) Establishment of Value-based Payment Modifier.--
            ``(1) In general.--The Secretary shall establish a payment 
        modifier that provides for differential payment to a physician 
        or a group of physicians under the fee schedule established 
        under subsection (b) based upon the quality of care furnished 
        compared to cost (as determined under paragraphs (2) and (3), 
        respectively) during a performance period. Such payment 
        modifier shall be separate from the geographic adjustment 
        factors established under subsection (e).
            ``(2) Quality.--
                    ``(A) In general.--For purposes of paragraph (1), 
                quality of care shall be evaluated, to the extent 
                practicable, based on a composite of measures of the 
                quality of care furnished (as established by the 
                Secretary under subparagraph (B)).
                    ``(B) Measures.--
                            ``(i) The Secretary shall establish 
                        appropriate measures of the quality of care 
                        furnished by a physician or group of physicians 
                        to individuals enrolled under this part, such 
                        as measures that reflect health outcomes. Such 
                        measures shall be risk adjusted as determined 
                        appropriate by the Secretary.
                            ``(ii) The Secretary shall seek endorsement 
                        of the measures established under this 
                        subparagraph by the entity with a contract 
                        under section 1890(a).
            ``(3) Costs.--For purposes of paragraph (1), costs shall be 
        evaluated, to the extent practicable, based on a composite of 
        appropriate measures of costs established by the Secretary 
        (such as the composite measure under the methodology 
        established under subsection (n)(9)(C)(iii)) that eliminate the 
        effect of geographic adjustments in payment rates (as described 
        in subsection (e)), and take into account risk factors (such as 
        socio-economic and demographic characteristics, ethnicity, and 
        health status of individuals (such as to recognize that less 
        healthy individuals may require more intensive interventions) 
        and other factors determined appropriate by the Secretary.
            ``(4) Implementation.--
                    ``(A) Publication of measures, dates of 
                implementation, performance period.--Not later than 
                January 1, 2012, the Secretary shall publish the 
                following:
                            ``(i) The measures of quality of care and 
                        costs established under paragraphs (2) and (3), 
                        respectively.
                            ``(ii) The dates for implementation of the 
                        payment modifier (as determined under 
                        subparagraph (B)).
                            ``(iii) The initial performance period (as 
                        specified under subparagraph (B)(ii)).
                    ``(B) Deadlines for implementation.--
                            ``(i) Initial implementation.--Subject to 
                        the preceding provisions of this subparagraph, 
                        the Secretary shall begin implementing the 
                        payment modifier established under this 
                        subsection through the rulemaking process 
                        during 2013 for the physician fee schedule 
                        established under subsection (b).
                            ``(ii) Initial performance period.--
                                    ``(I) In general.--The Secretary 
                                shall specify an initial performance 
                                period for application of the payment 
                                modifier established under this 
                                subsection with respect to 2015.
                                    ``(II) Provision of information 
                                during initial performance period.--
                                During the initial performance period, 
                                the Secretary shall, to the extent 
                                practicable, provide information to 
                                physicians and groups of physicians 
                                about the quality of care furnished by 
                                the physician or group of physicians to 
                                individuals enrolled under this part 
                                compared to cost (as determined under 
                                paragraphs (2) and (3), respectively) 
                                with respect to the performance period.
                            ``(iii) Application.--The Secretary shall 
                        apply the payment modifier established under 
                        this subsection for items and services 
                        furnished--
                                    ``(I) beginning on January 1, 2015, 
                                with respect to specific physicians and 
                                groups of physicians the Secretary 
                                determines appropriate; and
                                    ``(II) beginning not later than 
                                January 1, 2017, with respect to all 
                                physicians and groups of physicians.
                    ``(C) Budget neutrality.--The payment modifier 
                established under this subsection shall be implemented 
                in a budget neutral manner.
            ``(5) Systems-based care.--The Secretary shall, as 
        appropriate, apply the payment modifier established under this 
        subsection in a manner that promotes systems-based care.
            ``(6) Consideration of special circumstances of certain 
        providers.--In applying the payment modifier under this 
        subsection, the Secretary shall, as appropriate, take into 
        account the special circumstances of physicians or groups of 
        physicians in rural areas and other underserved communities.
            ``(7) Application.--For purposes of the initial application 
        of the payment modifier established under this subsection 
        during the period beginning on January 1, 2015, and ending on 
        December 31, 2016, the term `physician' has the meaning given 
        such term in section 1861(r). On or after January 1, 2017, the 
        Secretary may apply this subsection to eligible professionals 
        (as defined in subsection (k)(3)(B)) as the Secretary 
        determines appropriate.
            ``(8) Definitions.--For purposes of this subsection:
                    ``(A) Costs.--The term `costs' means expenditures 
                per individual as determined appropriate by the 
                Secretary. In making the determination under the 
                preceding sentence, the Secretary may take into account 
                the amount of growth in expenditures per individual for 
                a physician compared to the amount of such growth for 
                other physicians.
                    ``(B) Performance period.--The term `performance 
                period' means a period specified by the Secretary.
            ``(9) Coordination with other value-based purchasing 
        reforms.--The Secretary shall coordinate the value-based 
        payment modifier established under this subsection with the 
        Physician Feedback Program under subsection (n) and, as the 
        Secretary determines appropriate, other similar provisions of 
        this title.
            ``(10) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise or otherwise of--
                    ``(A) the establishment of the value-based payment 
                modifier under this subsection;
                    ``(B) the evaluation of quality of care under 
                paragraph (2), including the establishment of 
                appropriate measures of the quality of care under 
                paragraph (2)(B);
                    ``(C) the evaluation of costs under paragraph (3), 
                including the establishment of appropriate measures of 
                costs under such paragraph;
                    ``(D) the dates for implementation of the value-
                based payment modifier;
                    ``(E) the specification of the initial performance 
                period and any other performance period under 
                paragraphs (4)(B)(ii) and (8)(B), respectively;
                    ``(F) the application of the value-based payment 
                modifier under paragraph (7); and
                    ``(G) the determination of costs under paragraph 
                (8)(A).''.

SEC. 3008. PAYMENT ADJUSTMENT FOR CONDITIONS ACQUIRED IN HOSPITALS.

    Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as 
amended by section 3001, is amended by adding at the end the following 
new subsection:
    ``(p) Adjustment to Hospital Payments for Hospital Acquired 
Conditions.--
            ``(1) In general.--In order to provide an incentive for 
        applicable hospitals to reduce hospital acquired conditions 
        under this title, with respect to discharges from an applicable 
        hospital occurring during fiscal year 2015 or a subsequent 
        fiscal year, the amount of payment under this section or 
        section 1814(b)(3), as applicable, for such discharges during 
        the fiscal year shall be equal to 99 percent of the amount of 
        payment that would otherwise apply to such discharges under 
        this section or section 1814(b)(3) (determined after the 
        application of subsections (n), (o), and (q) and section 
        1814(l)(3) but without regard to this subsection).
            ``(2) Applicable hospitals.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `applicable hospital' means a subsection (d) 
                hospital that meets the criteria described in 
                subparagraph (B).
                    ``(B) Criteria described.--
                            ``(i) In general.--The criteria described 
                        in this subparagraph, with respect to a 
                        subsection (d) hospital, is that the subsection 
                        (d) hospital is in the top quartile of all 
                        subsection (d) hospitals, relative to the 
                        national average, of hospital acquired 
                        conditions during the applicable period, as 
                        determined by the Secretary.
                            ``(ii) Risk adjustment.--In carrying out 
                        clause (i), the Secretary shall establish and 
                        apply an appropriate risk adjustment 
                        methodology.
            ``(3) Hospital acquired conditions.--For purposes of this 
        subsection, the term `hospital acquired condition' means a 
        condition identified for purposes of subsection (d)(4)(D)(iv) 
        that an individual acquires during a stay in an applicable 
        hospital, as determined by the Secretary.
            ``(4) Applicable period.--In this subsection, the term 
        `applicable period' means, with respect to a fiscal year, a 
        period specified by the Secretary.
            ``(5) Reporting to hospitals.--Prior to fiscal year 2015 
        and each subsequent fiscal year, the Secretary shall provide 
        confidential reports to applicable hospitals with respect to 
        hospital acquired conditions of the applicable hospital during 
        the applicable period.
            ``(6) Reporting hospital specific information.--
                    ``(A) In general.--The Secretary shall make 
                information available to the public regarding hospital 
                acquired conditions of each applicable hospital.
                    ``(B) Opportunity to review and submit 
                corrections.--The Secretary shall ensure that an 
                applicable hospital has the opportunity to review, and 
                submit corrections for, the information to be made 
                public with respect to the hospital under subparagraph 
                (A) prior to such information being made public.
                    ``(C) Website.--Such information shall be posted on 
                the Hospital Compare Internet website in an easily 
                understandable format.
            ``(7) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The criteria described in paragraph (2)(A).
                    ``(B) The specification of hospital acquired 
                conditions under paragraph (3).
                    ``(C) The specification of the applicable period 
                under paragraph (4).
                    ``(D) The provision of reports to applicable 
                hospitals under paragraph (5) and the information made 
                available to the public under paragraph (6)''.

           PART II--STRENGTHENING THE QUALITY INFRASTRUCTURE

SEC. 3011. NATIONAL STRATEGY.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by inserting after section 1890 the following new section:

       ``national strategy for quality improvement in health care

    ``Sec. 1890A.  (a) Establishment of National Strategy and 
Priorities.--
            ``(1) National strategy.--The Secretary, through a 
        transparent collaborative process, shall establish a national 
        strategy to improve the delivery of health care services, 
        patient health outcomes, and population health.
            ``(2) Identification of priorities.--
                    ``(A) In general.--The Secretary shall identify 
                national priorities for improvement in developing the 
                strategy under paragraph (1).
                    ``(B) Requirements.--The Secretary shall ensure 
                that priorities identified under subparagraph (A) 
                will--
                            ``(i) have the greatest potential for 
                        improving the health outcomes, efficiency, and 
                        patient-centeredness of health care;
                            ``(ii) identify areas in the delivery of 
                        health care services that have the potential 
                        for rapid improvement in the quality and 
                        efficiency of patient care;
                            ``(iii) address gaps in quality , 
                        efficiency, and health outcomes measures and 
                        data aggregation techniques;
                            ``(iv) improve Federal payment policy to 
                        emphasize quality and efficiency;
                            ``(v) enhance the use of health care data 
                        to improve quality, efficiency, transparency, 
                        and outcomes;
                            ``(vi) address the health care provided to 
                        patients with high-cost chronic diseases;
                            ``(vii) improve strategies and best 
                        practices to improve patient safety and reduce 
                        medical errors, preventable admissions and 
                        readmissions, and health care-associated 
                        infections;
                            ``(viii) reduce health disparities across 
                        health disparity populations (as defined by 
                        section 485E of the Public Health Service Act) 
                        and geographic areas; and
                            ``(ix) address other areas as determined 
                        appropriate by the Secretary.
                    ``(C) Considerations.--In identifying priorities 
                under subparagraph (A), the Secretary shall take into 
                consideration--
                            ``(i) the recommendations submitted by 
                        qualified consensus-based entities as required 
                        under section 1890C; and
                            ``(ii) the recommendations of the 
                        Interagency Working Group on Health Care 
                        Quality established under section 3012 of the 
                        America's Healthy Future Act of 2009.
    ``(b) Strategic Plan.--
            ``(1) In general.--The national strategy shall include a 
        comprehensive strategic plan to achieve the priorities 
        described in subsection (a).
            ``(2) Requirements.--The strategic plan shall include 
        provisions for addressing, at a minimum, the following:
                    ``(A) Coordination among agencies within the 
                Department, which shall include steps to minimize 
                duplication of efforts and utilization of common 
                quality measures, where available. Such common quality 
                measures shall be measures endorsed under section 
                1890C.
                    ``(B) Agency-specific strategic plans to achieve 
                national priorities.
                    ``(C) Establishment of annual benchmarks for each 
                relevant agency to achieve national priorities.
                    ``(D) A process for regular reporting by the 
                agencies to the Secretary on the implementation of the 
                strategic plan.
                    ``(E) Strategies to align incentives among public 
                and private payers with regard to quality and patient 
                safety efforts.
                    ``(F) Incorporating quality improvement and 
                measurement in the strategic plan for health 
                information technology required by the American 
                Recovery and Reinvestment Act of 2009 (Public Law 111-
                5).
    ``(c) Periodic Update of National Strategy.--The Secretary shall 
update the national strategy not less than triennially. Any such update 
shall include a review of short- and long-term goals.
    ``(d) Submission and Availability of National Strategy and 
Updates.--
            ``(1) Deadline for initial submission of national 
        strategy.--Not later than December 31, 2010, the Secretary 
        shall submit to the relevant Committees of Congress the 
        national strategy.
            ``(2) Updates.--
                    ``(A) In general.--The Secretary shall submit to 
                the relevant Committees of Congress any updates to such 
                strategy.
                    ``(B) Information submitted.--Any update submitted 
                under subparagraph (A) shall include--
                            ``(i) a review of the short and long-term 
                        goals of the national strategy; and
                            ``(ii) an analysis of the progress made in 
                        meeting those goals.
    ``(e) Health Care Quality Website.--The Secretary shall create an 
Internet website to make public information regarding--
            ``(1) the national priorities for health care quality 
        improvement established under subsection (a)(2);
            ``(2) the agency-specific strategic plans for health care 
        quality described in subsection (b)(2)(B); and
            ``(3) other information, as the Secretary determines to be 
        appropriate.''.

SEC. 3012. INTERAGENCY WORKING GROUP ON HEALTH CARE QUALITY.

    (a) In General.--The President shall convene a working group to be 
known as the Interagency Working Group on Health Care Quality (referred 
to in this section as the ``Working Group'').
    (b) Goals.--The goals of the Working Group shall be to achieve the 
following:
            (1) Collaboration, cooperation, and consultation between 
        Federal departments and agencies with respect to developing and 
        disseminating strategies, goals, models, and timetables that 
        are consistent with the national priorities identified under 
        section 1890A of the Social Security Act (as added by section 
        3011).
            (2) Avoidance of inefficient duplication of quality 
        improvement efforts and resources, where practicable, and a 
        streamlined process for quality reporting and compliance 
        requirements.
    (c) Composition.--
            (1) In general.--The Working Group shall be composed of 
        senior level representatives of--
                    (A) the Department of Health and Human Services;
                    (B) the Centers for Medicare & Medicaid Services;
                    (C) the National Institutes of Health;
                    (D) the Centers for Disease Control and Prevention;
                    (E) the Food and Drug Administration;
                    (F) the Health Resources and Services 
                Administration;
                    (G) the Agency for Healthcare Research and Quality;
                    (H) the Administration for Children and Families;
                    (I) the Department of Commerce;
                    (J) the Office of Management and Budget;
                    (K) the United States Coast Guard;
                    (L) the Federal Bureau of Prisons;
                    (M) the National Highway Traffic Safety 
                Administration;
                    (N) the Federal Trade Commission;
                    (O) the Social Security Administration;
                    (P) the Department of Labor;
                    (Q) the United States Office of Personnel 
                Management;
                    (R) the Department of Defense;
                    (S) the Department of Education;
                    (T) the Department of Veterans Affairs;
                    (U) the Veterans Health Administration; and
                    (V) any other Federal agencies and departments with 
                activities relating to improving health care quality 
                and safety, as determined by the President.
            (2) Chair and vice chair.--
                    (A) Chair.--The Working Group shall be chaired by 
                the Secretary of Health and Human Services.
                    (B) Vice chair.--Members of the Working Group, 
                other than the Secretary of Health and Human Services, 
                shall serve as Vice Chair of the Group on a rotating 
                basis, as determined by the Group.
    (d) Report to Congress.--Not later than a date determined 
appropriate by the Secretary, and annually thereafter, the Working 
Group shall submit to the relevant Committees of Congress, and make 
public on an Internet website, a report describing the progress and 
recommendations of the Working Group in meeting the goals described in 
subsection (b).

SEC. 3013. QUALITY MEASURE DEVELOPMENT.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), as 
amended by section 3011, is further amended by inserting after section 
1890A the following new section:

                     ``quality measure development

    ``Sec. 1890B.  (a) Quality Measure.--In this section, the term 
`quality measure' means a standard for measuring the performance and 
improvement of population health or of health plans, providers of 
services, and other clinicians in the delivery of health care services.
    ``(b) Identification of Quality Measures.--
            ``(1) Identification.--The Secretary shall identify, not 
        less often than triennially, gaps where no quality measures 
        exist, or where existing quality measures need improvement, 
        updating, or expansion, consistent with the national strategy 
        under section 1890A, for use in programs authorized under this 
        Act. In identifying such gaps, the Secretary shall take into 
        consideration the gaps identified by a qualified consensus-
        based entity under section 1890C.
            ``(2) Publication.--The Secretary shall make available to 
        the public on an Internet website a report on any gaps 
        identified under paragraph (1) and the process used to make 
        such identification.
    ``(c) Grants or Contracts for Quality Measure Development.--
            ``(1) In general.--The Secretary shall award grants, 
        contracts, or intergovernmental agreements to eligible entities 
        for purposes of developing, improving, updating, or expanding 
        quality measures identified under subsection (b).
            ``(2) Prioritization in the development of quality 
        measures.--In awarding grants, contracts, or agreements under 
        this subsection, the Secretary shall give priority to the 
        development of quality measures that allow the assessment of--
                    ``(A) health outcomes and functional status of 
                patients;
                    ``(B) the coordination of health care across 
                episodes of care and care transitions;
                    ``(C) the meaningful use of health information 
                technology;
                    ``(D) safety, effectiveness, patient-centeredness, 
                appropriateness, and timeliness of care;
                    ``(E) efficiency of care;
                    ``(F) equity of health services and health 
                disparities across health disparity populations (as 
                defined in section 485E of the Public Health Service 
                Act) and geographic areas;
                    ``(G) patient experience and satisfaction; and
                    ``(H) other areas determined appropriate by the 
                Secretary.
            ``(3) Eligible entities.--To be eligible for a grant or 
        contract under this subsection, an entity shall--
                    ``(A) have demonstrated expertise and capacity in 
                the development and evaluation of quality measures;
                    ``(B) have adopted procedures to include in the 
                quality measure development process--
                            ``(i) the views of those providers or 
                        payers whose performance will be assessed by 
                        the measure; and
                            ``(ii) the views of other parties who also 
                        will use the quality measures (such as 
                        patients, consumers, and health care 
                        purchasers);
                    ``(C) collaborate with a qualified consensus-based 
                entity (as defined in section 1890C), as practicable, 
                and the Secretary so that quality measures developed by 
                the eligible entity will meet the requirements to be 
                considered for endorsement by such qualified consensus-
                based entity;
                    ``(D) have transparent policies regarding 
                governance and conflicts of interest; and
                    ``(E) submit an application to the Secretary at 
                such time and in such manner, as the Secretary may 
                require.
            ``(4) Use of funds.--An entity that receives a grant, 
        contract, or agreement under this subsection shall use such 
        award to develop quality measures that meet the following 
        requirements:
                    ``(A) Such measures build upon measures required to 
                be reported pursuant to this title, where applicable.
                    ``(B) To the extent practicable, data on such 
                quality measures is able to be collected using health 
                information technologies.
                    ``(C) Each quality measure is free of charge to 
                users of such measure.
                    ``(D) Each quality measure is publicly available on 
                an Internet website.
    ``(d) Other Activities by the Secretary.--The Secretary may use 
amounts available under this section to update and test, where 
applicable, quality measures endorsed by a qualified consensus-based 
entity (as defined in section 1890C) or adopted by the Secretary.
    ``(e) Funding.--There are authorized to be appropriated to carry 
out this section, $75,000,000 for each of fiscal years 2010 through 
2014.''.

SEC. 3014. QUALITY MEASURE ENDORSEMENT.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), as 
amended by sections 3011 and 3013, is further amended by inserting 
after section 1890B the following new section:

                     ``quality measure endorsement

    ``Sec. 1890C.  (a) Definition.--In this section:
            ``(1) Qualified consensus-based entity.--The term 
        `qualified consensus-based entity' means an entity with a 
        contract with the Secretary under section 1890.
            ``(2) Quality measure.--The term `quality measure' means a 
        standard for measuring the performance and improvement of 
        population health or of health plans, providers of services, 
        and other clinicians in the delivery of health care services.
            ``(3) Multi-stakeholder group.--The term `multi-stakeholder 
        group' means, with respect to a quality measure, a voluntary 
        collaborative of organizations representing a broad group of 
        stakeholders interested in or affected by the use of such 
        quality measure. Stakeholders would include representatives of 
        hospitals, physicians, post-acute providers, quality alliances, 
        nurses and other health care practitioners, health plans, 
        consumer representatives, life sciences industry, employers and 
        public purchasers, labor organizations, licensing, 
        credentialing and accrediting bodies, relevant government 
        agency representatives; and others deemed appropriate by the 
        Secretary. Such a multi-stakeholder group would operate in an 
        open and transparent process.
    ``(b) Grants and Contracts.--A qualified consensus-based entity may 
receive a grant or contract under this section to--
            ``(1) make recommendations to the Secretary for national 
        priorities for performance improvement in population health and 
        in the delivery of health care services;
            ``(2) identify gaps in endorsed quality measures, which 
        shall include measures that are within priority areas 
        identified by the Secretary under the national strategy 
        established under section 1890A;
            ``(3) identify and endorse quality measures;
            ``(4) update endorsed quality measures at least every 3 
        years;
            ``(5) make endorsed quality measures publicly available and 
        have a plan for broad-based dissemination of endorsed measures; 
        and
            ``(6) transmit endorsed quality measures to the Secretary.
    ``(c) Annual Reports.--
            ``(1) In general.--A qualified consensus-based entity that 
        receives a grant or contract under this section shall provide a 
        report to the Secretary not less than annually--
                    ``(A) of where gaps (as described in subsection 
                (b)(2)) exist and where quality measures are 
                unavailable or inadequate to identify or address such 
                gaps; and
                    ``(B) regarding areas in which evidence is 
                insufficient to support endorsement of quality measures 
                in priority areas identified by the Secretary under the 
                national strategy established under section 1890A and 
                where targeted research may address such gaps.
            ``(2) Impact of quality measures.--A qualified consensus-
        based entity that receives a grant or contract under this 
        section shall provide a report to the Secretary not less than 
        annually regarding the economic and quality impact of the use 
        of endorsed measures.
    ``(d) Priorities for Performance Improvement.--
            ``(1) Recommendation for national priorities.--A qualified 
        consensus-based entity that receives a grant or contract under 
        this section shall evaluate evidence and convene multi-
        stakeholder groups to make recommendations to the Secretary for 
        national priorities (as identified in section 1890A(a)(2)) for 
        improvement in population health and in the delivery of health 
        care services for consideration under the national strategy 
        established under section 1890A. The qualified consensus-based 
        entity shall make such recommendations not less frequently than 
        triennially.
            ``(2) Requirements for transparency in process.--
                    ``(A) In general.--In convening multi-stakeholder 
                groups under paragraph (1) with respect to 
                recommendations for national priorities, the qualified 
                consensus-based entity shall provide for an open and 
                transparent process for the activities conducted 
                pursuant to such convening.
                    ``(B) Selection of organizations participating in 
                multi-stakeholder groups.--The process under 
                subparagraph (A) shall ensure that the selection of 
                representatives comprising such groups provides for 
                public nominations for, and the opportunity for public 
                comment on, such selection.
    ``(e) Process for Consultation of Stakeholder Groups.--
            ``(1) Consultation of selection of endorsed quality 
        measures.--A qualified consensus-based entity that receives a 
        grant or contract under this section shall convene multi-
        stakeholder groups to provide guidance on the selection of 
        individual or composite quality measures, for use in reporting 
        performance information to the public or for use in Federal 
        health programs, from among--
                    ``(A) such measures that have been endorsed by the 
                qualified consensus-based entity (under section 1890(b) 
                or otherwise); and
                    ``(B) such measures that have not been considered 
                for endorsement by the qualified consensus-based entity 
                but are used or proposed to be used by the Secretary 
                under subsection (f)(2) under laws under the 
                jurisdiction of the Secretary that require the 
                collection or reporting of quality measures.
            ``(2) Establishment of pre-rulemaking process.--
                    ``(A) In general.--The Secretary shall establish a 
                pre-rulemaking process under which a qualified 
                consensus-based entity that receives a grant or 
                contract under this section and multi-stakeholder 
                groups convened under paragraph (1) provide guidance to 
                the Secretary on the selection of individual or 
                composite quality measures (as described in such 
                paragraph).
                    ``(B) Public availability of measures considered 
                for selection.--Not later than December 1 or each year 
                (beginning with 2011), the Secretary shall make 
                available to the public a list of such measures that 
                the Secretary is considering for selection with respect 
                to quality reporting and payment systems under this 
                title.
                    ``(C) Inclusion of measures.--The list made 
                available under subparagraph (B) may include such 
                measures that are described in subparagraphs (A) or (B) 
                of paragraph (1) as the Secretary determines 
                appropriate.
                    ``(D) Transmission of multi-stakeholder guidance.--
                Not later than February 1 of each year (beginning with 
                2012), the qualified consensus-based entity shall 
                transmit to the Secretary the guidance of multi-
                stakeholder groups provided under paragraph (1).
            ``(3) Requirement for transparency in process.--
                    ``(A) In general.--In convening multi-stakeholder 
                groups under paragraph (1) with respect to the 
                selection of quality measures, the qualified consensus-
                based entity shall provide for an open and transparent 
                process for the activities conducted pursuant to such 
                convening.
                    ``(B) Selection of organizations participating in 
                multi-stakeholder groups.--The process under 
                subparagraph (A) shall ensure that the selection of 
                representatives comprising such groups provides for 
                public nominations for, and the opportunity for public 
                comment on, such selection.
    ``(f) Coordination of Use of Quality Measures.--
            ``(1) Endorsed quality measures.--The Secretary may make a 
        determination under regulation or otherwise to use a quality 
        measure described in subsection (e)(1)(A) only after taking 
        into account the guidance of multi-stakeholder groups under 
        subsection (e)(2).
            ``(2) Use of non-endorsed measures.--
                    ``(A) In general.--The Secretary may make a 
                determination, by regulation or otherwise, to use a 
                quality measure that has not been endorsed as described 
                in subsection (e)(1)(A), provided that the Secretary--
                            ``(i) in a timely manner, transmits the 
                        measure to the qualified consensus-based entity 
                        for consideration for endorsement and for the 
                        multi-stakeholder consultation process under 
                        subsection (e)(1);
                            ``(ii) publishes in the Federal Register 
                        the rationale for the use of the measure; and
                            ``(iii) phases out use of the measure upon 
                        a decision of the qualified consensus-based 
                        entity not to endorse the measure, contingent 
                        on availability of an adequate alternative 
                        endorsed measure (as determined by the 
                        Secretary), taking into account guidance from 
                        multi-stakeholder consultation process under 
                        subsection (e)(1).
                    ``(B) No adequate alternative.--If an adequate 
                alternative endorsed measure is not available, the 
                Secretary shall support the development of such an 
                alternative endorsed measure, as described in section 
                1890B.
            ``(3) Effective date.--This subsection shall apply with 
        respect to determinations or requirements by the Secretary for 
        the use of quality measures made on or after the date of 
        enactment of the America's Health Future Act of 2009.
    ``(g) Review of Quality Measures Used by the Secretary.--
            ``(1) In general.--Not less than once every 3 years, the 
        Secretary shall review quality measures used by the Secretary 
        and, with respect to each such measure, shall determine whether 
        to--
                    ``(A) maintain the use of such measure; or
                    ``(B) phase out such measure.
            ``(2) Considerations.--In conducting the review under 
        paragraph (1), the Secretary shall--
                    ``(A) seek to avoid duplication of measures used; 
                and
                    ``(B) take into consideration current innovative 
                methodologies and strategies for quality improvement 
                practices in the delivery of health care services that 
                represent best practices for such quality improvement 
                and measures endorsed by a qualified consensus-based 
                entity since the previous review by the Secretary.
    ``(h) Process for Dissemination of Measures Used by the 
Secretary.--
            ``(1) In general.--The Secretary shall establish a process 
        for disseminating quality measures used by the Secretary. Such 
        process shall include the incorporation of such measures, where 
        applicable, in workforce programs, training curricula, payment 
        programs, and any other means of dissemination determined by 
        the Secretary. The Secretary shall establish a process to 
        disseminate such quality measures to the Interagency Working 
        Group established in section 3012 of the America's Health 
        Future Act of 2009.
            ``(2) Authority to contract with certain organizations for 
        dissemination.--
                    ``(A) In general.--The Secretary may contract with 
                1 or more entities that meet the requirements described 
                in subparagraph (B) to carry out this subsection.
                    ``(B) Entities described.--The requirements 
                described in this subparagraph are the following:
                            ``(i) The entity is a nonprofit entity.
                            ``(ii) The entity has at least 5 years of 
                        experience in developing and implementing 
                        quality improvement strategies.
                            ``(iii) The entity has operated programs 
                        described in paragraph (1) on a statewide or 
                        multi-State basis to improve patient safety and 
                        the quality of health care delivered in 
                        hospitals, including at a minimum such programs 
                        in hospital intensive care units, hospital-
                        associated infections, hospital perioperative 
                        patient safety, and hospital emergency rooms.
                            ``(iv) The entity has worked with a variety 
                        of institutional health care providers, 
                        physicians, and other providers of services and 
                        suppliers.
    ``(i) Technical Assistance.--The Secretary shall provide technical 
assistance to providers of services and suppliers required to report on 
measures under this title. In providing such assistance, the Secretary 
shall give priority to--
            ``(1) rural and urban providers of services and suppliers 
        with limited infrastructure and financial resources to 
        implement and support quality improvement activities;
            ``(2) providers of services and suppliers with poor 
        performance scores; and
            ``(3) providers of services and suppliers with disparities 
        in care among subgroups of patients.
    ``(j) Funding.--For purposes of carrying out this section, the 
Secretary of Health and Human Services shall provide for the transfer, 
from the Federal Hospital Insurance Trust Fund under section 1817 and 
the Federal Supplementary Medical Insurance Trust Fund under section 
1841, in such proportion as the Secretary determines appropriate, of 
$50,000,000, to the Centers for Medicare & Medicaid Services Program 
Management Account for each of fiscal years 2010 through 2014. Amounts 
transferred under the preceding sentence shall remain available until 
expended.''.

      PART III--ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS

SEC. 3021. ESTABLISHMENT OF CENTER FOR MEDICARE AND MEDICAID INNOVATION 
              WITHIN CMS.

    (a) In General.--Title XI of the Social Security Act is amended by 
inserting after section 1115 the following new section:

             ``center for medicare and medicaid innovation

    ``Sec. 1115A.  (a) Center for Medicare and Medicaid Innovation 
Established.--
            ``(1) In general.--There is created within the Centers for 
        Medicare & Medicaid Services a Center for Medicare and Medicaid 
        Innovation (in this section referred to as the `CMI') to carry 
        out the duties described in this section. The purpose of the 
        CMI is to test innovative payment and service delivery models 
        to reduce program expenditures under the applicable titles 
        while preserving or enhancing the quality of care furnished to 
        individuals under such titles. In selecting such models, the 
        Secretary shall give preference to models that also improve the 
        coordination, quality, and efficiency of health care services 
        furnished to applicable individuals defined in paragraph 
        (4)(A).
            ``(2) Deadline.--The Secretary shall ensure that the CMI is 
        carrying out the duties described in this section by not later 
        than January 1, 2011.
            ``(3) Consultation.--In carrying out the duties under this 
        section, the CMI shall consult representatives of relevant 
        Federal agencies, and clinical and analytical experts with 
        expertise in medicine and health care management. The CMI shall 
        use open door forums or other mechanisms to seek input from 
        interested parties.
            ``(4) Definitions.--In this section:
                    ``(A) Applicable individual.--The term `applicable 
                individual' means--
                            ``(i) an individual who is entitled to, or 
                        enrolled for, benefits under part A of title 
                        XVIII or enrolled for benefits under part B of 
                        such title;
                            ``(ii) an individual who is eligible for 
                        medical assistance under title XIX, under a 
                        State plan or waiver; or
                            ``(iii) an individual who meets the 
                        criteria of both clauses (i) and (ii).
                    ``(B) Applicable title.--The term `applicable 
                title' means title XVIII, title XIX, or both.
    ``(b) Testing of Models (Phase I).--
            ``(1) In general.--The CMI shall test payment and service 
        delivery models in accordance with selection criteria under 
        paragraph (2) to determine the effect of applying such models 
        under the applicable title (as defined in subsection (a)(4)(B)) 
        on program expenditures under such titles and the quality of 
        care received by individuals receiving benefits under such 
        title.
            ``(2) Selection of models to be tested.--
                    ``(A) In general.--The Secretary shall select 
                models to be tested from models where the Secretary 
                determines that there is evidence that the model 
                addresses a defined population for which there are 
                deficits in care leading to poor clinical outcomes or 
                potentially avoidable expenditures. The models selected 
                under the preceding sentence may include the models 
                described in subparagraph (B).
                    ``(B) Opportunities.--The models described in this 
                subparagraph are the following models:
                            ``(i) Promoting broad payment and practice 
                        reform in primary care, including patient-
                        centered medical home models for high-need 
                        Medicare beneficiaries, medical homes that 
                        address women's unique health care needs, and 
                        models that transition primary care practices 
                        away from fee-for-service based reimbursement 
                        and toward comprehensive payment or salary-
                        based payment under title XVIII
                            ``(ii) Contracting directly with groups of 
                        providers of services and suppliers to promote 
                        innovative care delivery models, such as 
                        through risk-based comprehensive payment or 
                        salary-based payment.
                            ``(iii) Promote care coordination between 
                        providers of services and suppliers that 
                        transition health care providers away from fee-
                        for-service based reimbursement and toward 
                        salary-based payment.
                            ``(iv) Supporting care coordination for 
                        chronically-ill Medicare beneficiaries at high 
                        risk of hospitalization, such as individuals 
                        with cognitive impairment (including dementia) 
                        through a health information technology-enabled 
                        network that includes a chronic disease 
                        registry, home tele-health technology, and care 
                        oversight by the Medicare beneficiary's 
                        treating physician.
                            ``(v) Varying payment to physicians who 
                        order advanced diagnostic imaging services (as 
                        defined in section 1834(e)(1)(B)) according to 
                        the physician's adherence to appropriateness 
                        criteria for the ordering of such services, as 
                        determined in consultation with physician 
                        specialty groups and other relevant 
                        stakeholders.
                            ``(vi) Utilizing medication therapy 
                        management services.
                            ``(vii) Establishing community-based health 
                        teams to support small-practice medical homes 
                        by assisting the primary care practitioner in 
                        chronic care management activities.
                            ``(viii) Funding physician, nurse 
                        practitioner, or physician assistant-led home-
                        based primary care programs with demonstrated 
                        experience in serving high-cost Medicare 
                        beneficiaries with multiple chronic illnesses 
                        and functional disabilities.
                            ``(ix) Assisting Medicare beneficiaries in 
                        making informed health care choices by paying 
                        providers of services and suppliers for using 
                        patient decision-support tools that improve 
                        Medicare beneficiary and caregiver 
                        understanding of medical treatment options.
                            ``(x) Allowing States to test and evaluate 
                        fully integrating care for dual eligible 
                        individuals in the State, including the 
                        management and oversight of all funds under the 
                        applicable titles with respect to such 
                        individuals.
                            ``(xi) Allowing States to test and evaluate 
                        systems of all-payer payment reform for the 
                        medical care of residents of the State, 
                        including dual eligible individuals.
                            ``(xii) Aligning nationally-recognized, 
                        evidence-based guidelines of cancer care with 
                        payment incentives under title XVIII in the 
                        areas of treatment planning and follow-up care 
                        planning for Medicare beneficiaries with 
                        cancer, including the identification of gaps in 
                        applicable quality measures.
                            ``(xiii) Improving post-acute care through 
                        continuing care hospitals that offer inpatient 
                        rehabilitation, long-term care hospitals, and 
                        home health or skilled nursing care during an 
                        inpatient stay and the 30 days immediately 
                        following discharge.
                            ``(xiv) Funding home health providers who 
                        offer chronic care management services to 
                        Medicare beneficiaries in cooperation with 
                        interdisciplinary teams.
                            ``(xv) Promoting improved quality and 
                        reduced cost by developing a collaborative of 
                        high-quality, low-cost health care institutions 
                        that is responsible for--
                                    ``(I) developing, documenting, and 
                                disseminating best practices and proven 
                                care methods;
                                    ``(II) implementing such best 
                                practices and proven care methods 
                                within such institutions to demonstrate 
                                further improvements in quality and 
                                efficiency; and
                                    ``(III) providing assistance to 
                                other health care institutions on how 
                                best to employ such best practices and 
                                proven care methods to improve health 
                                care quality and lower costs.
                            ``(xvi) Promoting greater efficiencies and 
                        timely access to outpatient services (such as 
                        outpatient physical therapy services) through 
                        models that do not require a physician or other 
                        health professional to refer the service or be 
                        involved in establishing the plan of care for 
                        the service, when such service is furnished by 
                        a health professional who has the authority to 
                        furnish the service under existing State law.
                    ``(C) Additional factors for consideration.--In 
                selecting models for testing under subparagraph (A), 
                the CMI may consider the following additional factors:
                            ``(i) Whether the model includes a regular 
                        process for monitoring and updating patient 
                        care plans in a manner that is consistent with 
                        the needs and preferences of Medicare 
                        beneficiaries.
                            ``(ii) Whether the model places the 
                        Medicare beneficiary, including family members 
                        and other informal caregivers of the 
                        beneficiary, at the center of the care team of 
                        the beneficiary.
                            ``(iii) Whether the model provides for in-
                        person contact with Medicare beneficiaries.
                            ``(iv) Whether the model utilizes 
                        technology, such as electronic health records 
                        and patient-based remote monitoring systems, to 
                        coordinate care over time and across settings.
                            ``(v) Whether the model provides for the 
                        maintenance of a close relationship between 
                        care coordinators, primary care practitioners, 
                        specialist physicians, and other providers of 
                        services and suppliers.
                            ``(vi) Whether the model relies on a team-
                        based approach to interventions, such as 
                        comprehensive care assessments, care planning, 
                        and self-management coaching.
                            ``(vii) Whether, under the model, providers 
                        of services and suppliers are able to share 
                        information with other providers of services 
                        and suppliers on a real time basis.
            ``(3) Budget neutrality.--
                    ``(A) Initial period.--The Secretary shall not 
                require, as a condition for testing a model under 
                paragraph (1), that the design of such model ensure 
                that such model is budget neutral initially with 
                respect to expenditures under the applicable title.
                    ``(B) Termination or modification.--The Secretary 
                shall terminate or modify the design and implementation 
                of a model unless the Secretary determines (and the 
                Chief Actuary of the Centers for Medicare & Medicaid 
                Services, with respect to program spending under the 
                applicable title, certifies), after testing has begun, 
                that the model is expected to--
                            ``(i) improve the quality of care (as 
                        determined by the Administrator of the Centers 
                        for Medicare & Medicaid Services) without 
                        increasing spending under the applicable title;
                            ``(ii) reduce spending under the applicable 
                        title without reducing the quality of care; or
                            ``(iii) improve the quality of care and 
                        reduce spending.
                Such termination may occur at any time after such 
                testing has begun and before completion of the testing.
            ``(4) Evaluation.--
                    ``(A) In general.--The Secretary shall conduct an 
                evaluation of each model tested under this subsection. 
                Such evaluation shall include an analysis of--
                            ``(i) the quality of care furnished under 
                        the model, including the measurement of 
                        patient-level outcomes; and
                            ``(ii) the changes in spending under the 
                        applicable titles by reason of the model.
                    ``(B) Information.--The Secretary shall make the 
                results of each evaluation under this paragraph 
                available to the public in a timely fashion and may 
                establish requirements for States and other entities 
                participating in the testing of models under this 
                section to collect and report information that the 
                Secretary determines is necessary to monitor and 
                evaluate such models.
    ``(c) Expansion of Models (Phase II).--Taking into account the 
evaluation under subsection (b)(4), the Secretary may, through 
rulemaking, expand (including implementation on a nationwide basis) the 
duration and the scope of a model that is being tested under subsection 
(b) or a demonstration project under section 1866C, to the extent 
determined appropriate by the Secretary, if--
            ``(1) the Secretary determines that such expansion is 
        expected to--
                    ``(A) reduce spending under applicable title 
                without reducing the quality of care; or
                    ``(B) improve the quality of care and reduce 
                spending; and
            ``(2) the Chief Actuary of the Centers for Medicare & 
        Medicaid Services certifies that such expansion would reduce 
        net program spending under applicable titles.
    ``(d) Implementation.--
            ``(1) Waiver authority.--The Secretary may waive such 
        requirements of titles XI and XVIII and of sections 1902(a)(1), 
        1902(a)(13), and 1903(m)(2)(A)(iii) as may be necessary solely 
        for purposes of carrying out this section with respect to 
        testing models described in subsection (b).
            ``(2) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the selection of models for testing or 
                expansion under this section;
                    ``(B) the selection of organizations, sites, or 
                participants to test those models selected;
                    ``(C) the elements, parameters, scope, and duration 
                of such models for testing or dissemination;
                    ``(D) determinations regarding budget neutrality 
                under subsection (b)(3);
                    ``(E) the termination or modification of the design 
                and implementation of a model under subsection 
                (b)(3)(B); and
                    ``(F) determinations about expansion of the 
                duration and scope of a model under subsection (c), 
                including the determination that a model is not 
                expected to meet criteria described in paragraph (1) or 
                (2) of such subsection.
            ``(3) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the testing and evaluation of 
        models or expansion of such models under this section.
    ``(e) Application to CHIP.--The Center may carry out activities 
under this section with respect to title XXI in the same manner as 
provided under this section with respect to the program under the 
applicable titles.
    ``(f) Funding.--
            ``(1) In general.--There are appropriated, from amounts in 
        the Treasury not otherwise appropriated--
                    ``(A) $10,000,000,000 for the activities initiated 
                under this section for the period of fiscal years 2011 
                through 2019; and
                    ``(B) the amount described in subparagraph (A) for 
                the activities initiated under this section for each 
                subsequent 10-year fiscal period (beginning with the 
                10-year fiscal period beginning with fiscal year 2020).
        Amounts appropriated under the preceding sentence shall remain 
        available until expended.
            ``(2) Use of certain funds.--Out of amounts appropriated 
        under paragraph (1), not less than $25,000,000 shall be made 
        available each such fiscal year to design, implement, and 
        evaluate models under subsection (b).
    ``(g) Report to Congress.--Beginning in 2012, and not less than 
once every other year thereafter, the Secretary shall submit to 
Congress a report on activities under this section. Each such report 
shall describe the models tested under subsection (b), including the 
number of individuals described in subsection (a)(4)(A)(i) and of 
individuals described in subsection (a)(4)(A)(ii) participating in such 
models and payments made under applicable titles for services on behalf 
of such individuals, any models chosen for expansion under subsection 
(c), and the results from evaluations under subsection (b)(4). In 
addition, each such report shall provide such recommendations as the 
Secretary determines are appropriate for legislative action to 
facilitate the development and expansion of successful payment 
models.''.
    (b) Medicaid Conforming Amendment.--Section 1902(a) of the Social 
Security Act (42 U.S.C. 1396a(a)), as amended by sections 5103 and 
5105, is amended--
            (1) in paragraph (77), by striking ``and'' at the end;
            (2) in paragraph (78), by striking the period at the end 
        and inserting ``; and''; and
            (3) by inserting after paragraph (78) the following new 
        paragraph:
            ``(79) provide for implementation of the payment models 
        specified by the Secretary under section 1115A(c) for 
        implementation on a nationwide basis unless the State 
        demonstrates to the satisfaction of the Secretary that 
        implementation would not be administratively feasible or 
        appropriate to the health care delivery system of the State.''.
    (c) Revisions to Health Care Quality Demonstration Program.--
Subsections (b) and (f) of section 1866C of the Social Security Act (42 
U.S.C. 1395cc-3) are amended by striking ``5-year'' each place it 
appears.

SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by adding at the end the following new section:

                        ``shared savings program

    ``Sec. 1899.  (a) Establishment.--
            ``(1) In general.--Not later than January 1, 2012, the 
        Secretary shall establish a shared savings program (in this 
        section referred to as the `program') that promotes 
        accountability for a patient population and coordinates items 
        and services under parts A and B, and encourages investment in 
        infrastructure and redesigned care processes for high quality 
        and efficient service delivery. Under such program--
                    ``(A) groups of providers of services and suppliers 
                meeting criteria specified by the Secretary may work 
                together to manage and coordinate care for Medicare 
                fee-for-service beneficiaries through an accountable 
                care organization (referred to in this section as an 
                `ACO'); and
                    ``(B) ACOs that meet quality performance standards 
                established by the Secretary are eligible to receive 
                payments for shared savings under subsection (d)(2).
    ``(b) Eligible ACOs.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, as determined appropriate by the Secretary, 
        the following groups of providers of services and suppliers 
        which have established a mechanism for shared governance are 
        eligible to participate as ACOs under the program under this 
        section:
                    ``(A) ACO professionals in group practice 
                arrangements.
                    ``(B) Networks of individual practices of ACO 
                professionals.
                    ``(C) Partnerships or joint venture arrangements 
                between hospitals and ACO professionals.
                    ``(D) Hospitals employing ACO professionals.
                    ``(E) Such other groups of providers of services 
                and suppliers as the Secretary determines appropriate.
            ``(2) Requirements.--An ACO shall meet the following 
        requirements:
                    ``(A) The ACO shall be willing to become 
                accountable for the quality, cost, and overall care of 
                the Medicare fee-for-service beneficiaries assigned to 
                it.
                    ``(B) The ACO shall enter into an agreement with 
                the Secretary to participate in the program for not 
                less than a 3-year period (referred to in this section 
                as the `agreement period').
                    ``(C) The ACO shall have a formal legal structure 
                that would allow the organization to receive and 
                distribute payments for shared savings under subsection 
                (d)(2) to participating providers of services and 
                suppliers.
                    ``(D) The ACO shall include the primary care ACO 
                professionals described in subsection (h)(1)(A) of at 
                least 5,000 Medicare fee-for-service beneficiaries 
                assigned to the ACO under subsection (c).
                    ``(E) The ACO shall provide the Secretary with such 
                information regarding ACO professionals participating 
                in the ACO as the Secretary determines necessary to 
                support the assignment of Medicare fee-for-service 
                beneficiaries to an ACO, the implementation of quality 
                and other reporting requirements under paragraph (3), 
                and the determination of payments for shared savings 
                under subsection (d)(2).
                    ``(F) The ACO shall have in place a leadership and 
                management structure that includes clinical and 
                administrative systems.
                    ``(G) The ACO shall define processes to promote 
                evidence-based medicine, report on quality and cost 
                measures, and coordinate care, such as through the use 
                of telehealth, remote patient monitoring, and other 
                such enabling technologies.
                    ``(H) The ACO shall demonstrate to the Secretary 
                that it meets patient-centeredness criteria specified 
                by the Secretary, such as the use of patient and 
                caregiver assessments or the use of individualized care 
                plans.
            ``(3) Quality and other reporting requirements.--
                    ``(A) In general.--The Secretary shall determine 
                appropriate measures to assess the quality of care 
                furnished by the ACO, such as measures of--
                            ``(i) clinical processes and outcomes;
                            ``(ii) patient perspectives on care; and
                            ``(iii) utilization (such as rates of 
                        hospital admissions for ambulatory care 
                        sensitive conditions).
                    ``(B) Reporting requirements.--An ACO shall submit 
                data in a form and manner specified by the Secretary on 
                measures the Secretary determines necessary for the ACO 
                to report in order to evaluate the quality of care 
                furnished by the ACO. Such data may include care 
                transitions across health care settings, including 
                hospital discharge planning and post hospital discharge 
                follow-up by ACO professionals, as the Secretary 
                determines appropriate.
                    ``(C) Quality performance standards.--The Secretary 
                shall establish quality performance standards to assess 
                the quality of care furnished by ACOs. The Secretary 
                shall seek to improve the quality of care furnished by 
                ACOs over time by specifying higher standards, new 
                measures, or both for purposes of assessing such 
                quality of care.
                    ``(D) Other reporting requirements.--The Secretary 
                may, as the Secretary determines appropriate, 
                incorporate reporting requirements and incentive 
                payments related to the physician quality reporting 
                initiative (PQRI) under section 1848, including such 
                requirements and such payments related to electronic 
                prescribing, electronic health records, and other 
                similar initiatives under section 1848, and may use 
                alternative criteria than would otherwise apply under 
                such section for determining whether to make such 
                payments. The incentive payments described in the 
                preceding sentence shall not be taken into 
                consideration when calculating any payments otherwise 
                made under subsection (d).
            ``(4) No duplication in participation in shared savings 
        programs.--A provider of services or supplier that participates 
        in any of the following shall not be eligible to participate in 
        an ACO under this section:
                    ``(A) A model tested or expanded under section 
                1115A that involves shared savings under this title, or 
                any other program or demonstration project that 
                involves such shared savings.
                    ``(B) The independence at home medical practice 
                pilot program under section 1866E.
    ``(c) Assignment of Medicare Fee-for-Service Beneficiaries to 
ACOs.--The Secretary shall determine an appropriate method to assign 
Medicare fee-for-service beneficiaries to an ACO based on their 
utilization of primary care services under this title.
    ``(d) Payments and Treatment of Savings.--
            ``(1) Payments.--
                    ``(A) In general.--Under the program, subject to 
                paragraph (3), payments shall continue to be made to 
                providers of services and suppliers participating in an 
                ACO under the original Medicare fee-for-service program 
                under parts A and B in the same manner as they would 
                otherwise be made except that a participating ACO is 
                eligible to receive payment for shared savings under 
                paragraph (2) if--
                            ``(i) the ACO meets quality performance 
                        standards established by the Secretary under 
                        subsection (b)(3); and
                            ``(ii) the ACO meets the requirement under 
                        subparagraph (B)(i).
                    ``(B) Savings requirement and benchmark.--
                            ``(i) Determining savings.--In each year of 
                        the agreement period, an ACO shall be eligible 
                        to receive payment for shared savings under 
                        paragraph (2) only if the estimated average per 
                        capita Medicare expenditures under the ACO for 
                        Medicare fee-for-service beneficiaries for 
                        parts A and B services, adjusted for 
                        beneficiary characteristics, is at least the 
                        percent specified by the Secretary below the 
                        applicable benchmark under clause (ii). The 
                        Secretary shall determine the appropriate 
                        percent described in the preceding sentence to 
                        account for normal variation in expenditures 
                        under this title, based upon the number of 
                        Medicare fee-for-service beneficiaries assigned 
                        to an ACO.
                            ``(ii) Establish and update benchmark.--The 
                        Secretary shall estimate a benchmark for each 
                        agreement period for each ACO using the most 
                        recent available 3 years of per-beneficiary 
                        expenditures for parts A and B services for 
                        Medicare fee-for-service beneficiaries assigned 
                        to the ACO. Such benchmark shall be adjusted 
                        for beneficiary characteristics and such other 
                        factors as the Secretary determines appropriate 
                        and updated by the projected absolute amount of 
                        growth in national per capita expenditures for 
                        parts A and B services under the original 
                        Medicare fee-for-service program, as estimated 
                        by the Secretary. Such benchmark shall be reset 
                        at the start of each agreement period.
            ``(2) Payments for shared savings.--Subject to performance 
        with respect to the quality performance standards established 
        by the Secretary under subsection (b)(3), if an ACO meets the 
        requirements under paragraph (1), a percent (as determined 
        appropriate by the Secretary) of the difference between such 
        estimated average per capita Medicare expenditures in a year, 
        adjusted for beneficiary characteristics, under the ACO and 
        such benchmark for the ACO may be paid to the ACO as shared 
        savings and the remainder of such difference shall be retained 
        by the program under this title. The Secretary shall establish 
        limits on the total amount of shared savings that may be paid 
        to an ACO under this paragraph.
            ``(3) Monitoring avoidance of at-risk patients.--If the 
        Secretary determines that an ACO has taken steps to avoid 
        patients at risk in order to reduce the likelihood of 
        increasing costs to the ACO the Secretary may impose an 
        appropriate sanction on the ACO, including termination from the 
        program.
            ``(4) Termination.--The Secretary may terminate an 
        agreement with an ACO if it does not meet the quality 
        performance standards established by the Secretary under 
        subsection (b)(3).
    ``(e) Administration.--Chapter 35 of title 44, United States Code, 
shall not apply to the program.
    ``(f) Waiver Authority.--The Secretary may waive such requirements 
of sections 1128A and 1128B and title XVIII of this Act as may be 
necessary to carry out the provisions of this section.
    ``(g) Limitations on Review.--There shall be no administrative or 
judicial review under section 1869, section 1878, or otherwise of--
            ``(1) the specification of criteria under subsection 
        (a)(1)(B);
            ``(2) the assessment of the quality of care furnished by an 
        ACO and the establishment of performance standards under 
        subsection (b)(3);
            ``(3) the assignment of Medicare fee-for-service 
        beneficiaries to an ACO under subsection (c);
            ``(4) the determination of whether an ACO is eligible for 
        shared savings under subsection (d)(2) and the amount of such 
        shared savings, including the determination of the estimated 
        average per capita Medicare expenditures under the ACO for 
        Medicare fee-for-service beneficiaries assigned to the ACO and 
        the average benchmark for the ACO under subsection (d)(1)(B);
            ``(5) the percent of shared savings specified by the 
        Secretary under subsection (d)(2) and any limit on the total 
        amount of shared savings established by the Secretary under 
        such subsection; and
            ``(6) the termination of an ACO under subsection (d)(4).
    ``(h) Definitions.--In this section:
            ``(1) ACO professional.--The term `ACO professional' 
        means--
                    ``(A) a physician (as defined in section 
                1861(r)(1)); and
                    ``(B) a practitioner described in section 
                1842(b)(18)(C)(i).
            ``(2) Hospital.--The term `hospital' means a subsection (d) 
        hospital (as defined in section 1886(d)(1)(B)).
            ``(3) Medicare fee-for-service beneficiary.--The term 
        `Medicare fee-for-service beneficiary' means an individual who 
        is enrolled in the original Medicare fee-for-service program 
        under parts A and B and is not enrolled in an MA plan under 
        part C, an eligible organization under section 1876, or a PACE 
        program under section 1894.''.

SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

    Title XVIII of the Social Security Act, as amended by section 3021, 
is amended by inserting after section 1886C the following new section:

              ``national pilot program on payment bundling

    ``Sec. 1866D.  (a) Implementation.--
            ``(1) In general.--The Secretary shall establish a pilot 
        program for integrated care during an episode of care provided 
        to an applicable beneficiary around a hospitalization.
            ``(2) Definitions.--In this section:
                    ``(A) Applicable beneficiary.--The term `applicable 
                beneficiary' means an individual who--
                            ``(i) is entitled to, or enrolled for, 
                        benefits under part A and enrolled for benefits 
                        under part B of such title, but not enrolled 
                        under part C; and
                            ``(ii) is admitted to a hospital for an 
                        applicable condition.
                    ``(B) Applicable condition.--The term `applicable 
                condition' means 1 or more of 8 conditions selected by 
                the Secretary. In selecting conditions under the 
                preceding sentence, the Secretary shall take into 
                consideration the following factors:
                            ``(i) Whether the conditions selected 
                        include a mix of chronic and acute conditions.
                            ``(ii) Whether the conditions selected 
                        include a mix of surgical and medical 
                        conditions.
                            ``(iii) Whether a condition is one for 
                        which there is evidence of an opportunity for 
                        providers of services and suppliers to improve 
                        the quality of care furnished while reducing 
                        total expenditures under this title.
                            ``(iv) Whether a condition has significant 
                        variation in--
                                    ``(I) the number of readmissions; 
                                and
                                    ``(II) the amount of expenditures 
                                for post-acute care spending under this 
                                title.
                            ``(v) Whether a condition has high-volume 
                        and high post-acute care expenditures under 
                        this title.
                            ``(vi) Which conditions the Secretary 
                        determines are most amenable to bundling across 
                        the spectrum of care given practice patterns 
                        under this title.
                    ``(C) Applicable services.--The term `applicable 
                services' means the following:
                            ``(i) Acute care inpatient services.
                            ``(ii) Physicians' services delivered in 
                        and outside of an acute care hospital setting.
                            ``(iii) Outpatient hospital services, 
                        including emergency department services.
                            ``(iv) Services associated with acute care 
                        hospital readmissions.
                            ``(v) Post-acute care services, including 
                        home health services, skilled nursing services, 
                        inpatient rehabilitation services, and 
                        inpatient hospital services furnished by a 
                        long-term care hospital.
                            ``(vi) Other services the Secretary 
                        determines appropriate.
                    ``(D) Episode of care.--
                            ``(i) In general.--Subject to clause (ii), 
                        the term `episode of care' means, with respect 
                        to an applicable beneficiary, the period that 
                        includes--
                                    ``(I) the 3 days prior to the 
                                admission of the applicable beneficiary 
                                to a hospital for an applicable 
                                condition;
                                    ``(II) the length of stay of the 
                                applicable beneficiary in such 
                                hospital; and
                                    ``(III) the 30 days following the 
                                discharge of the applicable beneficiary 
                                from such hospital.
                            ``(ii) Establishment of period by the 
                        secretary.--The Secretary, as appropriate, may 
                        establish a period (other than the period 
                        described in clause (i)) for an episode of care 
                        under the pilot program.
                    ``(E) Physicians' services.--The term `physicians' 
                services' has the meaning given such term in section 
                1861(q).
                    ``(F) Pilot program.--The term `pilot program' 
                means the pilot program under this section.
                    ``(G) Provider of services.--The term `provider of 
                services' has the meaning given such term in section 
                1861(u).
                    ``(H) Readmission.--The term `readmission' has the 
                meaning given such term in section 1886(q)(3)(B).
                    ``(I) Supplier.--The term `supplier' has the 
                meaning given such term in section 1861(d).
            ``(3) Deadline for implementation.--The Secretary shall 
        establish the pilot program not later than January 1, 2013.
    ``(b) Developmental Phase.--
            ``(1) Determination of patient assessment instrument.--The 
        Secretary shall determine which patient assessment instrument 
        (such as the Continuity Assessment Record and Evaluation (CARE) 
        tool) shall be used under the pilot program to evaluate the 
        applicable condition of an applicable beneficiary for purposes 
        of determining the most clinically-appropriate site for the 
        provision of post-acute care to the applicable beneficiary.
            ``(2) Development of quality measures for an episode of 
        care and for post-acute care.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Agency for Healthcare Research and Quality and 
                a qualified consensus-based entity under section 1890C, 
                shall develop quality measures for use in the pilot 
                program--
                            ``(i) for episodes of care; and
                            ``(ii) for post-acute care.
                    ``(B) Site-neutral post-acute care quality 
                measures.--Any quality measures developed under 
                subparagraph (A)(ii) shall be site-neutral.
                    ``(C) Coordination with quality measure development 
                and endorsement procedures.--The Secretary shall ensure 
                that the development of quality measures under 
                subparagraph (A) is done in a manner that is consistent 
                with the measures developed and endorsed under sections 
                1890B and 1890C that are applicable to all post-acute 
                care settings.
            ``(3) Determination of application of waiver authority.--
        The Secretary shall determine which requirements of this title 
        and title XI to waive under subsection (d) to carry out the 
        pilot program .
    ``(c) Details.--
            ``(1) Duration.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                pilot program shall be conducted for a period of 5 
                years.
                    ``(B) Extension.--The Secretary may extend the 
                duration of the pilot program for providers of services 
                and suppliers participating in the pilot program as of 
                the day before the end of the 5-year period described 
                in subparagraph (A), for a period determined 
                appropriate by the Secretary, if the Secretary 
                determines that such extension will result in any of 
                the following conditions being met:
                            ``(i) The extension of the pilot program is 
                        expected to improve the quality of patient care 
                        without increasing expenditures under this 
                        title.
                            ``(ii) The extension of the pilot program 
                        is expected to reduce expenditures under this 
                        title without reducing the quality of patient 
                        care.
            ``(2) Participating providers of services and suppliers.--
                    ``(A) In general.--Subject to subparagraph (C), any 
                provider of services or supplier, including a hospital, 
                a physician group, or an entity composed of 2 or more 
                providers of services or suppliers may submit an 
                application to the Secretary to participate in the 
                pilot program.
                    ``(B) Requirements.--The Secretary shall develop 
                requirements for providers of services, suppliers, and 
                entities composed of 2 or more providers of services or 
                suppliers to participate in the pilot program. Such 
                requirements shall ensure that applicable beneficiaries 
                have an adequate choice of providers of services and 
                suppliers under the pilot program.
                    ``(C) Requirements for post-acute entities.--An 
                entity composed of 2 or more providers of services or 
                suppliers may only participate in the pilot program if 
                the entity owns, operates, or contracts with an acute 
                care hospital for the furnishing of services for which 
                a bundled payment is made under paragraph (3)(D).
            ``(3) Payment methodology.--
                    ``(A) In general.--
                            ``(i) Establishment of payment rates.--The 
                        Secretary shall establish payment rates under 
                        the pilot program for providers of services, 
                        suppliers, and entities participating in the 
                        pilot program at an amount that is equal to the 
                        average expected reimbursement under this title 
                        of providers of services, suppliers, and 
                        entities not participating in the pilot program 
                        for applicable services over an episode of 
                        care.
                            ``(ii) Testing of alternative payment 
                        methodologies.--The Secretary shall test 
                        alternative payment methodologies under the 
                        pilot program, including bundled payments or 
                        arrangements in which providers of services, 
                        suppliers, and entities continue to receive 
                        reimbursement under payment systems that would 
                        otherwise apply under this title, in accordance 
                        with this paragraph.
                    ``(B) Adjustment of payments.--Payments to 
                participating providers of services, suppliers, and 
                entities under the pilot program shall be adjusted 
                for--
                            ``(i) severity of illness and other 
                        characteristics of applicable beneficiaries, 
                        including having a major diagnosis of substance 
                        abuse or mental illness; and
                            ``(ii) resources needed to provide care, 
                        including an adjustment for differences in 
                        hospital average hourly wages, physician work, 
                        practice expense, malpractice expense, and 
                        geographic adjustment factors.
                    ``(C) Inclusion of certain services.--A payment 
                methodology tested under the pilot program shall 
                include payment for the furnishing of applicable 
                services and other appropriate services, such as care 
                coordination, medication reconciliation, discharge 
                planning, transitional care services, and other 
                patient-centered activities as determined appropriate 
                by the Secretary.
                    ``(D) Bundled payments.--
                            ``(i) In general.--A bundled payment under 
                        the pilot program shall--
                                    ``(I) be comprehensive, covering 
                                the costs of applicable services and 
                                other appropriate services furnished to 
                                an individual during an episode of care 
                                (as determined by the Secretary), 
                                including the costs of any readmission 
                                which would otherwise be subject to a 
                                payment adjustment under section 
                                1886(q)(5); and
                                    ``(II) be made to a provider of 
                                services or supplier (or an entity 
                                composed of 2 or more providers of 
                                services or suppliers) participating in 
                                the pilot program.
                            ``(ii) Requirement for provision of 
                        applicable services and other appropriate 
                        services.--Applicable services and other 
                        appropriate services for which payment is made 
                        under this subparagraph shall be furnished or 
                        directed by a provider of services, supplier, 
                        or entity which is participating under this 
                        title.
                            ``(iii) Bundled payment for applicable 
                        conditions.--A bundled payment under the pilot 
                        program with respect to an applicable condition 
                        shall be based on the average of the amount of 
                        payment otherwise made under this title to a 
                        hospital, a physician, other providers of 
                        services, and other suppliers for such services 
                        furnished to an applicable beneficiary with 
                        respect to the applicable condition during an 
                        episode of care.
                            ``(iv) Payment for each applicable 
                        beneficiary furnished applicable services 
                        during an episode of care.--A bundled payment 
                        under the pilot program shall be made to a 
                        provider of services, supplier, or entity with 
                        respect to each applicable beneficiary who is 
                        furnished applicable services during an episode 
                        of care by the provider of services, supplier, 
                        or entity, regardless of whether the applicable 
                        beneficiary receives a certain level of 
                        physicians' services or post-acute care 
                        services.
                    ``(E) Exemption from payment adjustment for 
                readmissions.--In the case where the Secretary 
                determines there is overlap between an applicable 
                condition under the pilot program and a condition 
                selected under paragraph (2) of section 1886(q) for 
                which there would otherwise be a payment adjustment 
                under paragraph (5) of such section, the applicable 
                condition shall be exempt from such payment adjustment.
                    ``(F) Readmissions to a hospital other than the 
                hospital of the initial admission.--
                            ``(i) In general.--Under the pilot program, 
                        in the case of the readmission of an applicable 
                        beneficiary to a hospital other than the 
                        hospital of the initial admission, the 
                        Secretary shall reimburse the hospital of the 
                        readmission the amount of payment that would 
                        otherwise be made under this title for the 
                        readmission.
                            ``(ii) Adjustment of bundled payment.--In 
                        the case described in clause (i), the Secretary 
                        shall reduce the amount of the bundled payment 
                        under subparagraph (D) for the hospital of the 
                        initial admission by an amount equal to the 
                        amount paid to the hospital of the readmission 
                        under such clause.
                    ``(G) Payment for post-acute care services after 
                the episode of care.--The Secretary shall establish 
                procedures, in the case where an applicable beneficiary 
                requires continued post-acute care services after the 
                last day of the episode of care, under which the 
                original Medicare fee-for-service program under parts A 
                and B covers post-acute care services furnished to the 
                applicable beneficiary in an appropriate setting (as 
                determined using the patient assessment instrument 
                under subsection (b)(1)).
            ``(4) Quality measures.--
                    ``(A) In general.--The Secretary shall establish 
                quality measures (including quality measures of 
                process, outcome, and structure) related to care 
                provided across all providers of services, suppliers, 
                and entities participating in the pilot program. 
                Quality measures established under the preceding 
                sentence shall include measures of the following:
                            ``(i) An episode of care.
                            ``(ii) Functional status improvement.
                            ``(iii) Rates of readmission.
                            ``(iv) Rates of readmissions described in 
                        section 1861(q)(3)(B)(ii).
                            ``(v) Rates of return to the community.
                            ``(vi) Rates of admission to an emergency 
                        room after a hospitalization (as distinctly 
                        separate from rates described in clauses (iii) 
                        and (iv)).
                            ``(vii) Efficiency measures.
                            ``(viii) Measures of patient-centeredness 
                        of care.
                            ``(ix) Measures of patient perception of 
                        care.
                            ``(x) Measures to monitor and detect the 
                        under provision of necessary care.
                            ``(xi) Other measures, including measures 
                        of patient outcomes, determined appropriate by 
                        the Secretary.
                    ``(B) Risk adjustment.--Quality measures 
                established under subparagraph (A) shall be risk-
                adjusted.
                    ``(C) Revision of quality measures.--The Secretary 
                may revise quality measures so established (including 
                adding new quality measures and retiring quality 
                measures that are obsolete) as the Secretary determines 
                appropriate with respect to applicable services and 
                other appropriate services provided to applicable 
                beneficiaries under the pilot program.
                    ``(D) Reporting on quality measures.--
                            ``(i) In general.--A provider of services, 
                        supplier, or entity described in clause (ii) 
                        shall submit data to the Secretary on quality 
                        measures established under subparagraph (A) 
                        during each year of the pilot program (in a 
                        form and manner, subject to clause (iii), 
                        specified by the Secretary).
                            ``(ii) Provider of services, supplier, or 
                        entity described.--A provider of services, 
                        supplier, or entity described in this clause is 
                        a provider of services, supplier, or entity--
                                    ``(I) participating in the pilot 
                                program; and
                                    ``(II) who receives a bundled 
                                payment under paragraph (3)(D).
                            ``(iii) Submission of data through 
                        electronic health record.--To the extent 
                        practicable, the Secretary shall specify that 
                        data on measures be submitted under clause (i) 
                        through the use of an qualified electronic 
                        health record (as defined in section 3000(13) 
                        of the Public Health Service Act (42 U.S.C. 
                        300jj-11(13)) in a manner specified by the 
                        Secretary.
    ``(d) Waiver.--The Secretary may waive such provisions of this 
title and title XI as may be necessary to carry out the pilot program.
    ``(e) Independent Evaluation and Reports on Pilot Program.--
            ``(1) Independent evaluation.--
                    ``(A) In general.--The Secretary shall enter into a 
                contract with an entity for the conduct of an 
                independent evaluation of the pilot program, including 
                an evaluation of whether and if so, the extent to 
                which, the performance of providers of services, 
                suppliers, and entities composed of 2 or more providers 
                of services or suppliers participating in the pilot 
                program has improved with respect to--
                            ``(i) quality measures established under 
                        subsection (c)(4)(A);
                            ``(ii) health outcomes;
                            ``(iii) applicable beneficiary access to 
                        care; and
                            ``(iv) financial outcomes.
                    ``(B) Submission of reports.--Such contract shall 
                provide for the submission to the Secretary and 
                Congress of the reports described in paragraph (2).
            ``(2) Reports by entity conducting independent 
        evaluation.--
                    ``(A) Interim report.--Not later than 2 years after 
                the implementation of the pilot program, the entity 
                with a contract under paragraph (1) shall submit to the 
                Secretary and to Congress a report on the initial 
                results of the independent evaluation conducted under 
                such paragraph.
                    ``(B) Final report.--Not later than 3 years after 
                the implementation of the pilot program, the entity 
                described in subparagraph (A) shall submit to the 
                Secretary and to Congress a report on the final results 
                of such independent evaluation.
                    ``(C) Contents of report.--Each report submitted 
                under this paragraph shall include an evaluation of--
                            ``(i) whether the performance of providers 
                        of services, suppliers, and entities 
                        participating in the pilot program has improved 
                        with respect to--
                                    ``(I) quality measures established 
                                under subsection (c)(4)(A);
                                    ``(II) health outcomes;
                                    ``(III) applicable beneficiary 
                                access to care; and
                                    ``(IV) financial outcomes; and
                            ``(ii) if the evaluation under clause (i) 
                        determines such performance has improved, the 
                        extent of such improvement.
    ``(f) Study and Report on Application of Pilot Program to Small 
Rural Hospitals.--
            ``(1) Study.--The Secretary, in consultation with 
        representatives of small rural hospitals, including critical 
        access hospitals, shall conduct a study to determine 
        appropriate and effective methods for such hospitals to 
        participate in the pilot program or in a pilot program 
        conducted in a similar manner under this title. Such study 
        shall include consideration of innovative methods of 
        implementing bundled payments in hospitals described in the 
        preceding sentence, taking into consideration any difficulties 
        in doing so as a result of the low volume of services provided 
        by such hospitals.
            ``(2) Report.--Not later than 2 years after the date of 
        enactment of this section, the Secretary shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.
            ``(3) Definition of small rural hospital.--In this 
        subsection, the term `small rural hospital' means a hospital 
        located in a rural area (as defined in section 
        1886(d)(2)(D)(ii)) with fewer than 250 acute care inpatient 
        beds.
    ``(g) Implementation Plan.--
            ``(1) In general.--Not later than January 1, 2016, subject 
        to paragraph (2), the Secretary shall submit a plan for the 
        implementation of an expansion of the pilot program by not 
        later than January 1, 2018, to an extent determined appropriate 
        by the Secretary, if the Secretary determines that such 
        expansion will result in any of the following conditions being 
        met:
                    ``(A) The expansion of the pilot program is 
                expected to improve the quality of patient care without 
                increasing expenditures under this title.
                    ``(B) The expansion of the pilot program is 
                expected to reduce expenditures under this title 
                without reducing the quality of patient care.''.

SEC. 3024. INDEPENDENCE AT HOME PILOT PROGRAM.

    Title XVIII of the Social Security Act, as amended by section 3023, 
is amended by inserting after section 1866D the following new section:

         ``independence at home medical practice pilot program

    ``Sec. 1866E.  (a) Establishment.--
            ``(1) In general.--The Secretary shall conduct a pilot 
        program (in this section referred to as the `pilot program') to 
        test a payment incentive and service delivery model that 
        utilizes physician and nurse practitioner directed home-based 
        primary care teams designed to reduce expenditures and improve 
        health outcomes in the provision of items and services under 
        this title to applicable beneficiaries (as defined in 
        subsection (d)).
            ``(2) Requirement.--The pilot program shall test whether a 
        model described in paragraph (1), which is accountable for 
        providing comprehensive, coordinated, continuous, and 
        accessible care to high-need populations at home and 
        coordinating health care across all treatment settings, results 
        in--
                    ``(A) reducing preventable hospitalizations;
                    ``(B) preventing hospital readmissions;
                    ``(C) reducing emergency room visits;
                    ``(D) improving health outcomes commensurate with 
                the beneficiaries' stage of chronic illness;
                    ``(E) improving the efficiency of care, such as by 
                reducing duplicative diagnostic and laboratory tests;
                    ``(F) reducing the cost of health care services 
                covered under this title; and
                    ``(G) achieving beneficiary and family caregiver 
                satisfaction.
    ``(b) Independence at Home Medical Practice.--
            ``(1) Independence at home medical practice defined.--In 
        this section:
                    ``(A) In general.--The term `independence at home 
                medical practice' means a legal entity that--
                            ``(i) is comprised of an individual 
                        physician or nurse practitioner or group of 
                        physicians and nurse practitioners that 
                        provides care as part of a team that includes 
                        physicians, nurses, physician assistants, 
                        pharmacists, and other health and social 
                        services staff as appropriate who have 
                        experience providing home-based primary care to 
                        applicable beneficiaries, make in-home visits, 
                        and are available 24 hours per day, 7 days per 
                        week to carry out plans of care that are 
                        tailored to the individual beneficiary's 
                        chronic conditions and designed to achieve the 
                        results in subsection (a) and--
                            ``(ii) is organized at least in part for 
                        the purpose of providing physicians' services 
                        and has the medical training or experience to 
                        fulfill the physician's role in clause (i);
                            ``(iii) has documented experience in 
                        providing home-based primary care services to 
                        high cost chronically ill beneficiaries, as 
                        determined appropriate by the Secretary;
                            ``(iv) has the capacity to provide services 
                        covered by this section to at least 200 
                        applicable beneficiaries as defined in 
                        subsection (d);
                            ``(v) has entered into an agreement with 
                        the Secretary;
                            ``(vi) uses electronic health information 
                        systems, remote monitoring, and mobile 
                        diagnostic technology; and
                            ``(vii) meets such other criteria as the 
                        Secretary determines to be appropriate to 
                        participate in the pilot program.
                An agreement described in clause (iv) shall require the 
                entity to report on quality measures (in such form, 
                manner, and frequency as specified by the Secretary, 
                which may be for the group, for providers of services 
                and suppliers, or both) and report to the Secretary (in 
                a form, manner, and frequency as specified by the 
                Secretary) such data as the Secretary determines 
                appropriate to monitor and evaluate the pilot program .
                    ``(B) Physician.--The term `physician' includes, 
                except as the Secretary may otherwise provide, any 
                individual who--
                            ``(i) furnishes services for which payment 
                        may be made as physicians' services; and
                            ``(ii) has the medical training or 
                        experience to fulfill the physician's role in 
                        (1)(A)(i).
            ``(2) Participation of nurse practitioners and physician 
        assistants.--Nothing in this section shall be construed to 
        prevent a nurse practitioner or physician assistant from 
        participating in, or leading, a home-based primary care team as 
        part of an independence at home medical practice if--
                    ``(A) all the requirements of this section are met;
                    ``(B) the nurse practitioner or physician 
                assistant, as the case may be, is acting consistent 
                with State law; and
                    ``(C) the nurse practitioner or physician assistant 
                has the medical training or experience to fulfill the 
                nurse practitioner or physician assistant role in 
                paragraph (1)(A)(i).
            ``(3) Inclusion of providers and practitioners.--Nothing in 
        this subsection shall be construed as preventing an 
        independence at home medical practice from including a provider 
        of services or a participating practitioner described in 
        section 1842(b)(18)(C) that is affiliated with the practice 
        under an arrangement structured so that such provider of 
        services or practitioner participates in the pilot program and 
        shares in any savings under the pilot program.
            ``(4) Quality and performance standards.--The Secretary 
        shall develop quality performance standards for independence at 
        home medical practices participating in the pilot program.
    ``(c) Payment.--
            ``(1) Shared savings payment methodology.--
                    ``(A) Establishment of target spending levels and 
                shared savings amounts.--
                            ``(i) Targets.--The Secretary shall 
                        establish annual target spending levels in such 
                        a manner as to account for normal variation in 
                        expenditures for items and services covered 
                        under parts A and B for each participating 
                        independence at home medical practices based 
                        upon the size of the practice, characteristics 
                        of the enrolled individuals, and such other 
                        factors as the Secretary determines 
                        appropriate.
                            ``(ii) Designation of savings.--The 
                        Secretary shall designate annually the 
                        aggregate amount of savings achieved for 
                        beneficiaries enrolled in independence at home 
                        medical practices.
                            ``(iii) Apportionment of savings.--The 
                        Secretary shall designate how, and to what 
                        extent, savings beyond the first 5 percent are 
                        to be apportioned among participating 
                        independence at home medical practices, taking 
                        into account the number of beneficiaries served 
                        by each practice, the characteristics of the 
                        individuals enrolled in each practice, the 
                        independence at home medical practices' 
                        performance on quality performance measures, 
                        and such other factors as the Secretary 
                        determines appropriate.
                    ``(B) Minimum 5 percent savings to the medicare 
                program.--The Secretary shall limit shared savings 
                payments to each an independence at home medical 
                practice under this paragraph as necessary to ensure 
                that the aggregate expenditures for part A and B 
                services with respect to applicable beneficiaries for 
                such independence at home medical practice (inclusive 
                of shared savings payments) do not exceed the amount 
                that the Secretary estimates, less 5 percent, would be 
                expended for such services for such beneficiaries 
                enrolled in an independence at home medical practice if 
                the pilot program under this section were not 
                implemented.
    ``(d) Applicable Beneficiaries.--
            ``(1) Definition.--In this section, the term `applicable 
        beneficiary' means, with respect to a qualifying independence 
        at home medical practice, an individual who the practice has 
        determined--
                    ``(A) is entitled to, or enrolled for, benefits 
                under part A and enrolled for benefits under part B;
                    ``(B) is not enrolled in a Medicare Advantage plan 
                under part C, a PACE program under section 1894, or an 
                ACO under section 1899 or any other shared savings 
                program under this title;
                    ``(C) has 2 or more chronic illnesses, such as 
                congestive heart failure, diabetes, other dementias 
                designated by the Secretary, chronic obstructive 
                pulmonary disease, ischemic heart disease, stroke, 
                Alzheimer's Disease and neurodegenerative diseases, and 
                other diseases and conditions designated by the 
                Secretary which result in high costs under this title;
                    ``(D) within the past 12 months has had a 
                nonelective hospital admission and received acute or 
                subacute rehabilitation services or skilled home care 
                services;
                    ``(E) has 2 or more functional dependencies 
                requiring the assistance of another person (such as 
                bathing, dressing, toileting, walking, or feeding); and
                    ``(F) meets such other criteria as the Secretary 
                determines appropriate.
            ``(2) Patient election to participate.--The Secretary shall 
        determine an appropriate method of ensuring that applicable 
        beneficiaries have agreed to enroll in an independence at home 
        medical practice. Enrollment in the pilot program shall be 
        voluntary.
            ``(3) Beneficiary access to services.--Nothing in this 
        section shall be construed as encouraging physicians or nurse 
        practitioners to limit applicable beneficiary access to 
        services covered under this title and applicable beneficiaries 
        shall not be required to relinquish access to any benefit under 
        this title as a condition of receiving services from an 
        independence at home medical practice.
    ``(e) Implementation.--
            ``(1) Starting date.--The pilot program shall begin not 
        later than January 1, 2012. An agreement with an independence 
        at home medical practice under the pilot program may cover a 3-
        year period.
            ``(2) No physician duplication in pilot participation.--The 
        Secretary shall not pay an independence at home medical 
        practice under this section that participates in section 1115A 
        or section 1866D.
            ``(3) Preference.--In approving an independence at home 
        medical practice, the Secretary shall give preference to 
        practices that are--
                    ``(A) located in high-cost areas of the country;
                    ``(B) have experience in furnishing health care 
                services to applicable beneficiaries in the home; and
                    ``(C) use electronic medical records, health 
                information technology, and individualized plans of 
                care.
            ``(4) Number of practices.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall enter into agreements with as many 
                qualified independence at home medial practices as 
                practicable and consistent with this subsection to test 
                the potential of the independence at home medical 
                practice model under this section in order to achieve 
                the results described in subsection (a)(2) across 
                practices serving varying numbers of applicable 
                beneficiaries.
                    ``(B) Limitation.--In selecting qualified 
                independence at home medial practices to participate 
                under the pilot program, the Secretary shall limit the 
                number of applicable beneficiaries that may participate 
                in the pilot program to 10,000.
            ``(5) Waiver.--The Secretary may waive such provisions of 
        this title and title XI as the Secretary determines necessary 
        in order to implement the pilot program.
            ``(6) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to this section.
    ``(f) Evaluation and Monitoring.--The Secretary shall evaluate each 
independence at home medical practice under the pilot program to assess 
whether the practice achieved the results described in subsection 
(a)(2).
    ``(g) Reports to Congress.--The Secretary shall conduct an 
independent evaluation of the pilot program and submit to Congress an 
interim and a final report.. Each report shall include an analysis of--
            ``(1) best practices under the pilot program; and
            ``(2) the impact of the pilot program on--
                    ``(A) coordination of care;
                    ``(B) expenditures under this title;
                    ``(C) access to services; and
                    ``(D) the quality of health care services provided 
                to applicable beneficiaries; and
                    ``(E) Such other areas determined appropriate by 
                the Secretary.
    ``(h) Expansion to Program; Implementation.--
            ``(1) Testing and refinement of payment incentive and 
        service delivery models.--Subject to the evaluation described 
        in subsection (g), the Secretary may enter into agreements 
        under the pilot program with additional qualifying independence 
        at home medical practices to further test and refine models 
        with respect to qualifying independence at home medical 
        practices.
            ``(2) Expanding use of successful models to program 
        implementation.--Taking into account the results of the 
        evaluations under subsections (f) and (g), the Secretary may 
        issue regulations to implement, on a permanent (and if 
        appropriate, on a nationwide) basis, the independence at home 
        medical practice model if, and to the extent that--
                    ``(A) such models are beneficial to the program 
                under this title, as determined by the Secretary; and
                    ``(B) the Chief Actuary of the Centers for Medicare 
                & Medicaid Services certifies that such model would 
                result in estimated expenditures for part A and B items 
                and services are at least 5 percent less than the 
                expenditures that would be otherwise be made for such 
                items and services in the absence of such expansion, as 
                estimated by Chief Actuary.
    ``(i) Funding.--For purposes of administering and carrying out the 
pilot program, other than for payments for items and services furnished 
under this title and shared savings under subsection (c), in addition 
to funds otherwise appropriated, the Secretary shall provide for the 
transfer, from the Federal Hospital Insurance Trust Fund under section 
1817 and the Federal Supplementary Medical Insurance Trust Fund under 
section 1841, in such proportion as the Secretary determines 
appropriate, of $5,000,000 to the Centers for Medicare & Medicaid 
Services Program Management Account for each of fiscal years 2010 
through 2015. Amounts appropriated under the preceding sentence shall 
remain available until expended.''.

SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM.

    Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as 
amended by section 3001 and 3008, is amended by adding at the end the 
following new subsection:
    ``(q) Hospital Readmissions Reduction Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, the Secretary shall 
                establish a hospital readmissions reduction program (in 
                this subsection referred to as the `Program') under 
                which payments to subsection (d) hospitals are reduced 
                under paragraph (5) for certain readmissions.
                    ``(B) Program to begin in fiscal year 2013.--The 
                Program shall apply to payments for discharges 
                occurring on or after October 1, 2012.
                    ``(C) Definition of subsection (d) hospital.--For 
                purposes of this subsection, the term `subsection (d) 
                hospital' has the meaning given such term in subsection 
                (d)(1)(B)).
            ``(2) Selection of conditions associated with 
        readmissions.--
                    ``(A) Initial set.--Beginning during fiscal year 
                2012, the Secretary shall select 8 conditions that have 
                a high volume or high rate, or both, of potentially 
                preventable inpatient hospital readmissions, as 
                determined by the Secretary.
                    ``(B) Expansion.--For fiscal year 2016 and 
                subsequent fiscal years, the Secretary may expand the 
                list of conditions selected under subparagraph (A). In 
                selecting conditions under the preceding sentence, the 
                Secretary shall take into account whether--
                            ``(i) the condition has a high volume or 
                        high rate, or both, of potentially preventable 
                        inpatient hospital readmissions; and
                            ``(ii) the condition has high expenditures 
                        under this title.
            ``(3) Determination of risk-adjusted national average and 
        hospital-specific readmission rates for each selected 
        condition.--
                    ``(A) In general.--Before the beginning of the 
                fiscal year involved under the Program, the Secretary 
                shall calculate the following:
                            ``(i) A national average readmission rate 
                        related to each condition selected under 
                        paragraph (2). Such rate shall be a weighted 
                        average of all diagnosis-related groups related 
                        to the condition. Such rate shall be risk-
                        adjusted for patient severity of illness and 
                        other patient characteristics as the Secretary 
                        determines appropriate.
                            ``(ii) A hospital-specific hospital 
                        readmission rate related to each condition 
                        selected under paragraph (2). Such rate shall 
                        be risk-adjusted in the same manner as the rate 
                        under clause (i) is risk-adjusted.
                    ``(B) Readmission defined.--
                            ``(i) In general.--Subject to clause (ii), 
                        for purposes of this subsection, the term 
                        `readmission' means, in the case of an 
                        individual who is discharged from a subsection 
                        (d) hospital, the admission of the individual 
                        to the same or another hospital or a critical 
                        access hospital within 30 days from the date of 
                        such discharge.
                            ``(ii) Exclusions.--The term `readmission' 
                        does not include--
                                    ``(I) a planned readmission;
                                    ``(II) a readmission related to 
                                major or metastatic malignancies, burn 
                                care, or trauma care;
                                    ``(III) a readmission where the 
                                original admission was with a discharge 
                                status of `left against medical 
                                advice'; and
                                    ``(IV) a transfer from another 
                                hospital.
            ``(4) Assignment of hospitals.--With respect to each fiscal 
        year the Secretary shall--
                    ``(A) rank all subsection (d) hospitals based on 
                the national average and hospital-specific readmission 
                rate calculated under paragraph (3) for a period 
                specified by the Secretary for each condition selected 
                under paragraph (2); and
                    ``(B) identify the quartile of such hospitals with 
                the highest readmission rates for each such condition.
            ``(5) Payment adjustment.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), for discharges occurring in a fiscal year 
                beginning on or after October 1, 2013, if an individual 
                is readmitted (as defined in paragraph (3)(B)) and the 
                prior discharge from the subsection (d) hospital is 
                related to a condition selected under paragraph (2) for 
                the fiscal year, the Secretary shall reduce the payment 
                amount for the prior discharge under subsection (d) by 
                an amount equal to the applicable percent (as defined 
                in subparagraph (C)) of the payment amount for the 
                discharge under subsection (d) (determined without 
                regard to the application of this paragraph).
                    ``(B) Exception.--The payment adjustment under this 
                paragraph for a discharge in a fiscal year shall only 
                apply to a subsection (d) hospital that is identified 
                under paragraph (4)(B) for the fiscal year with respect 
                to the condition that is related to such discharge.
                    ``(C) No effect in subsequent fiscal years.--The 
                payment reductions under subparagraph (A) shall apply 
                only with respect to the fiscal year involved, and the 
                Secretary shall not take into account such payment 
                reductions in making payments to a subsection (d) 
                hospital under this section in a subsequent fiscal 
                year.
                    ``(D) Applicable percent.--In this paragraph, the 
                term `applicable percent' means--
                            ``(i) in the case of a readmission that 
                        occurs within 7 days of the prior discharge, 20 
                        percent; and
                            ``(ii) in the case of a readmission that 
                        occurs within 15 days of the prior discharge, 
                        10 percent.
            ``(6) Reporting to hospitals.--Prior to each fiscal year 
        under the Program (and prior to the fiscal year preceding the 
        first fiscal year under the Program), the Secretary shall 
        provide confidential reports to subsection (d) hospitals with 
        respect to the national average and hospital-specific 
        readmission rates for each condition selected under paragraph 
        (2).
            ``(7) Reporting hospital specific information.--
                    ``(A) In general.--The Secretary shall make 
                information available to the public regarding 
                readmission rates of each subsection (d) hospital under 
                the Program.
                    ``(B) Opportunity to review and submit 
                corrections.--The Secretary shall ensure that a 
                subsection (d) hospital has the opportunity to review, 
                and submit corrections for, the information to be made 
                public with respect to the hospital under subparagraph 
                (A) prior to such information being made public.
                    ``(C) Website.--Such information shall be posted on 
                the Hospital Compare Internet website in an easily 
                understandable format.
            ``(8) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The determination of the payment amount for 
                the prior discharge under subsection (d) under 
                paragraph (5)(A).
                    ``(B) The methodology for selecting conditions 
                under paragraph (2), determining rates under paragraph 
                (4), and making adjustments under paragraph (5).
                    ``(C) The provision of reports to subsection (d) 
                hospitals under paragraph (6) and the information made 
                available to the public under paragraph (7).''.

SEC. 3026. COMMUNITY-BASED CARE TRANSITIONS PROGRAM.

    (a) In General.--The Secretary shall establish a Community-Based 
Care Transitions Program under which the Secretary provides funding to 
eligible entities that furnish improved care transition services to 
high-risk Medicare beneficiaries.
    (b) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means 
        the following:
                    (A) A subsection (d) hospital (as defined in 
                section 1886(d)(1)(B) of the Social Security Act (42 
                U.S.C. 1395ww(d)(1)(B))) identified by the Secretary as 
                having a high readmission rate, such as a hospital-
                specific hospital readmission rate above the 75th 
                percentile (as calculated under paragraph (3)(A)(ii) of 
                section 1886(q) of the Social Security Act, as added by 
                section 3025) for conditions selected under paragraph 
                (2) of such section 1886(q).
                    (B) An appropriate community-based organization 
                that is capable of providing care transition services 
                under this section, including the ability to have 
                arrangements with subsection (d) hospitals (as so 
                defined) to furnish the services described in 
                subsection (c)(2)(B)(i).
            (2) High-risk medicare beneficiary.--The term ``high-risk 
        Medicare beneficiary'' means a Medicare beneficiary who has 
        attained a minimum hierarchical condition category score, as 
        determined by the Secretary, based on a diagnosis of multiple 
        chronic conditions or other risk factors associated with a 
        hospital readmission or substandard transition into post-
        hospitalization care, which may include 1 or more of the 
        following:
                    (A) Cognitive impairment.
                    (B) Depression.
                    (C) A history of multiple readmissions.
                    (D) Any other chronic disease or risk factor as 
                determined by the Secretary.
            (3) Medicare beneficiary.--The term ``Medicare 
        beneficiary'' means an individual who is entitled to benefits 
        under part A of title XVIII of the Social Security Act (42 
        U.S.C. 1395 et seq.) and enrolled under part B of such title, 
        but not enrolled under part C of such title.
            (4) Program.--The term ``program'' means the program 
        conducted under this section.
            (5) Readmission.--The term ``readmission'' has the meaning 
        given such term in section 1886(q)(3)(B) of the Social Security 
        Act, as added by section 3025.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (c) Requirements.--
            (1) Duration.--
                    (A) In general.--The program shall be conducted for 
                a 5-year period, beginning not later than January 1, 
                2011.
                    (B) Expansion.--The Secretary may expand the 
                duration and the scope of the program, to the extent 
                determined appropriate by the Secretary, if the 
                Secretary determines (and the Chief Actuary of the 
                Centers for Medicare & Medicaid Services, with respect 
                to spending under this title, certifies) that such 
                expansion would reduce spending under this title 
                without reducing quality.
            (2) Application; participation.--
                    (A) In general.--
                            (i) Application.--An eligible entity 
                        seeking to participate in the program shall 
                        submit an application to the Secretary at such 
                        time, in such manner, and containing such 
                        information as the Secretary may require.
                            (ii) Partnership.--If an eligible entity is 
                        a hospital, such hospital shall enter into a 
                        partnership with a community-based organization 
                        to participate in the program.
                    (B) Intervention proposal.--Subject to subparagraph 
                (C), an application submitted under subparagraph (A)(i) 
                shall include a detailed proposal for at least 1 care 
                transition intervention, which may include the 
                following:
                            (i) Initiating care transition services for 
                        a high-risk Medicare beneficiary not later than 
                        24 hours prior to the discharge of the 
                        beneficiary from the eligible entity.
                            (ii) Arranging timely post-discharge 
                        follow-up services to the high-risk Medicare 
                        beneficiary to provide the beneficiary (and, as 
                        appropriate, the primary caregiver of the 
                        beneficiary) with information regarding 
                        responding to symptoms that may indicate 
                        additional health problems or a deteriorating 
                        condition.
                            (iii) Providing the high-risk Medicare 
                        beneficiary (and, as appropriate, the primary 
                        caregiver of the beneficiary) with assistance 
                        to ensure productive and timely interactions 
                        with post-acute and outpatient providers.
                            (iv) Assessing and actively engaging with a 
                        high-risk Medicare beneficiary (and, as 
                        appropriate, the primary caregiver of the 
                        beneficiary) through the provision of self-
                        management support and relevant information 
                        that is specific to the beneficiary's 
                        condition.
                            (v) Conducting comprehensive medication 
                        review and management (including, if 
                        appropriate, self-management support).
                    (C) Limitation.--A care transition intervention 
                proposed under subparagraph (B) may not include 
                services required under the discharge planning process 
                described in section 1861(ee) of the Social Security 
                Act (42 U.S.C. 1395x(ee)).
            (3) Selection.--In selecting eligible entities to 
        participate in the program, the Secretary shall give priority 
        to eligible entities that provide services to medically 
        underserved populations, small communities, and rural areas.
    (d) Implementation.--Notwithstanding any other provision of law, 
the Secretary may implement the provisions of this section by program 
instruction or otherwise.
    (e) Waiver Authority.--The Secretary may waive such requirements of 
titles XI and XVIII of the Social Security Act as may be necessary to 
carry out the program.
    (f) Funding.--For purposes of carrying out this section, the 
Secretary of Health and Human Services shall provide for the transfer, 
from the Federal Hospital Insurance Trust Fund under section 1817 of 
the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary 
Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 
1395t), in such proportion as the Secretary determines appropriate, of 
$500,000,000, to the Centers for Medicare & Medicaid Services Program 
Management Account for the period of fiscal years 2011 through 2015. 
Amounts transferred under the preceding sentence shall remain available 
until expended.

SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION.

    (a) In General.--Subsection (d)(3) of section 5007 of the Deficit 
Reduction Act of 2005 (Public Law 109-171) is amended by inserting 
``(or September 30, 2011, in the case of a demonstration project in 
operation as of October 1, 2008)'' after ``December 31, 2009''.
    (b) Funding.--
            (1) In general.--Subsection (f)(1) of such section is 
        amended by inserting ``and for fiscal year 2010, $1,600,000,'' 
        after ``$6,000,000,''.
            (2) Availability.--Subsection (f)(2) of such section is 
        amended by striking ``2010'' and inserting ``2014 or until 
        expended''.
    (c) Reports.--
            (1) Quality improvement and savings.--Subsection (e)(3) of 
        such section is amended by striking ``December 1, 2008'' and 
        inserting ``March 31, 2011''.
            (2) Final report.--Subsection (e)(4) of such section is 
        amended by striking ``May 1, 2010'' and inserting ``March 31, 
        2013''.

  PART IV--STRENGTHENING PRIMARY CARE AND OTHER WORKFORCE IMPROVEMENTS

SEC. 3031. EXPANDING ACCESS TO PRIMARY CARE SERVICES AND GENERAL 
              SURGERY SERVICES.

    (a) Incentive Payment Program for Primary Care Services.--
            (1) In general.--Section 1833 of the Social Security Act 
        (42 U.S.C. 1395l) is amended by adding at the end the following 
        new subsection:
    ``(x) Incentive Payments for Primary Care Services.--
            ``(1) In general.--In the case of primary care services 
        furnished on or after January 1, 2011, and before January 1, 
        2016, by a primary care practitioner, in addition to the amount 
        of payment that would otherwise be made for such services under 
        this part, there also shall be paid (on a monthly or quarterly 
        basis) an amount equal to 10 percent of the payment amount for 
        the service under this part.
            ``(2) Definitions.--In this subsection:
                    ``(A) Primary care practitioner.--The term `primary 
                care practitioner' means an individual--
                            ``(i) who--
                                    ``(I) is a physician (as described 
                                in section 1861(r)(1)) who has a 
                                primary specialty designation of family 
                                medicine, internal medicine, geriatric 
                                medicine, or pediatric medicine; or
                                    ``(II) is a nurse practitioner, 
                                clinical nurse specialist, or physician 
                                assistant (as those terms are defined 
                                in section 1861(aa)(5)); and
                            ``(ii) for whom primary care services 
                        accounted for at least 60 percent of the 
                        allowed charges under this part for such 
                        physician or practitioner in a prior period as 
                        determined appropriate by the Secretary.
                    ``(B) Primary care services.--The term `primary 
                care services' means services identified, as of January 
                1, 2009, by the following HCPCS codes (and as 
                subsequently modified by the Secretary):
                            ``(i) 99201 through 99215.
                            ``(ii) 99304 through 99340.
                            ``(iii) 99341 through 99350.
            ``(3) Coordination with other payments.--The amount of the 
        additional payment for a service under this subsection and 
        subsection (m) shall be determined without regard to any 
        additional payment for the service under subsection (m) and 
        this subsection, respectively.
            ``(4) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 1878, or 
        otherwise, respecting the identification of primary care 
        practitioners under this subsection.''.
            (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by 
        adding at the end the following sentence: ``Section 1833(x) 
        shall not be taken into account in determining the amounts that 
        would otherwise be paid pursuant to the preceding sentence.''.
    (b) Incentive Payment Program for Major Surgical Procedures 
Furnished in Health Professional Shortage Areas.--
            (1) In general.--Section 1833 of the Social Security Act 
        (42 U.S.C. 1395l), as amended by subsection (a)(1), is amended 
        by adding at the end the following new subsection:
    ``(y) Incentive Payments for Major Surgical Procedures Furnished in 
Health Professional Shortage Areas.--
            ``(1) In general.--In the case of major surgical procedures 
        furnished on or after January 1, 2011, and before January 1, 
        2016, by a general surgeon in an area that is designated (under 
        section 332(a)(1)(A) of the Public Health Service Act) as a 
        health professional shortage area as identified by the 
        Secretary prior to the beginning of the year involved, in 
        addition to the amount of payment that would otherwise be made 
        for such services under this part, there also shall be paid (on 
        a monthly or quarterly basis) an amount equal to 10 percent of 
        the payment amount for the service under this part.
            ``(2) Definitions.--In this subsection:
                    ``(A) General surgeon.--In this subsection, the 
                term `general surgeon' means a physician (as described 
                in section 1861(r)(1)) who has designated CMS specialty 
                code 02-General Surgery as their primary specialty code 
                in the physician's application granted by the Secretary 
                for a supplier number for the submission of claims for 
                reimbursement under this title.
                    ``(B) Major surgical procedures.--The term `major 
                surgical procedures' means physicians' services which 
                are surgical procedures for which a 10-day or 90-day 
                global period is used for payment under the fee 
                schedule under section 1848(b).
            ``(3) Coordination with other payments.--The amount of the 
        additional payment for a service under this subsection and 
        subsection (m) shall be determined without regard to any 
        additional payment for the service under subsection (m) and 
        this subsection, respectively.
            ``(4) Application.--The provisions of paragraph (2) and (4) 
        of subsection (m) shall apply to the determination of 
        additional payments under this subsection in the same manner as 
        such provisions apply to the determination of additional 
        payments under subsection (m).''.
            (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395m(g)(2)(B)), as amended by 
        subsection (a)(2), is amended by striking ``Section 1833(x)'' 
        and inserting ``Subsections (x) and (y) of section 1833'' in 
        the last sentence.
    (c) Budget-neutrality Adjustment.--Section 1848(c)(2)(B) of the 
Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)) is amended by adding 
at the end the following new clause:
                            ``(vii) Adjustment for certain physician 
                        incentive payments.--Fifty percent of the 
                        additional expenditures under this part 
                        attributable to subsections (x) and (y) of 
                        section 1833 for a year (as estimated by the 
                        Secretary) shall be taken into account in 
                        applying clause (ii)(II) for 2011 and 
                        subsequent years. In lieu of applying the 
                        budget-neutrality adjustments required under 
                        clause (ii)(II) to relative value units to 
                        account for such costs for the year, the 
                        Secretary shall apply such budget-neutrality 
                        adjustments to the conversion factor otherwise 
                        determined for the year. For 2011 and 
                        subsequent years, the Secretary shall increase 
                        the incentive payment otherwise applicable 
                        under section 1833(m) by a percent estimated to 
                        be equal to the additional expenditures 
                        estimated under the first sentence of this 
                        clause for such year that is applicable to 
                        physicians who primarily furnish services in 
                        areas designated (under section 332(a)(1)(A) of 
                        the Public Health Service Act) as health 
                        professional shortage areas.''.

SEC. 3031A. MEDICARE FEDERALLY QUALIFIED HEALTH CENTER IMPROVEMENTS.

    (a)  Expansion of Medicare-Covered Preventive Services at Federally 
Qualified Health Centers.--
            (1) In general.--Section 1861(aa)(3)(A) of the Social 
        Security Act (42 U.S.C. 1395w (aa)(3)(A)) is amended to read as 
        follows:               
                    ``(A) services of the type described subparagraphs 
                (A) through (C) of paragraph (1) and preventive 
                services (as defined in section 1861(ddd)(3)); and''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services furnished on or after January 1, 2011.
    (b) Establishment of a Medicare Prospective Payment System for 
Federally Qualified Health Center Services.--
            (1) In general.--Paragraph (3) section 1833(a) of the 
        Social Security Act (42 U.S.C. 1395l(a)) is amended to read as 
        follows:
            ``(3)(A) in the case of services described in section 
        1832(a)(2)(D)(i), the costs which are reasonable and related to 
        the furnishing of such services or which are based on such 
        other tests of reasonableness as the Secretary may prescribe in 
        regulations including those authorized under section 
        1861(v)(1)(A), less the amount a provider may charge as 
        described in clause (ii) of section 1866(a)(2)(A), but in no 
        case may the payment for such services (other than for items 
        and services described in section 1861(s)(10)(A)) exceed 80 
        percent of such costs; and
            ``(B) in the case of services described in section 
        1832(a)(2)(D)(ii) furnished by a Federally qualified health 
        center--
                    ``(i) subject to clauses (iii) and (iv), for 
                services furnished on and after January 1, 2012, during 
                the center's fiscal year that ends in 2012, an amount 
                (calculated on a per visit basis) that is equal to 100 
                percent of the average of the costs of the center of 
                furnishing such services during such center's fiscal 
                years ending during 2010 and 2011 which are reasonable 
                and related to the cost of furnishing such services, or 
                which are based on such other tests of reasonableness 
                as the Secretary prescribes in regulations including 
                those authorized under section 1861(v)(1)(A) (except 
                that in calculating such cost in a center's fiscal 
                years ending during 2010 and 2011 and applying the 
                average of such cost for a center's fiscal year ending 
                during fiscal year 2012, the Secretary shall not apply 
                a per visit payment limit or productivity screen), less 
                the amount a provider may charge as described in clause 
                (ii) of section 1866(a)(2)(A), but in no case may the 
                payment for such services (other than for items or 
                services described in section 1861(s)(10)(A)) exceed 80 
                percent of such average of such costs;
                    ``(ii) subject to clauses (iii) and (iv), for 
                services furnished during the center's fiscal year 
                ending during 2013 or a succeeding fiscal year, an 
                amount (calculated on a per visit basis and without the 
                application of a per visit limit or productivity 
                screen) that is equal to the amount determined under 
                this subparagraph for the center's preceding fiscal 
                year (without regard to any copayment)--
                            ``(I) increased for a center's fiscal year 
                        ending during 2013 by the percentage increase 
                        in the MEI (as defined in section 1842(i)(3)) 
                        applicable to primary care services (as defined 
                        in section 1842(i)(4)) for 2013 and increased 
                        for a center's fiscal year ending during 2014 
                        or any succeeding fiscal year by the percentage 
                        increase for such year of a market basket of 
                        Federally qualified health center costs as 
                        developed and promulgated through regulations 
                        by the Secretary; and
                            ``(II) adjusted to take into account any 
                        increase or decrease in the scope of services, 
                        including a change in the type, intensity, 
                        duration, or amount of services, furnished by 
                        the center during the center's fiscal year,
        less the amount a provider may charge as described in clause 
        (ii) of section 1866(a)(2)(A), but in no case may the payment 
        for such services (other than for items or services described 
        in section 1861(s)(10)(A)) exceed 80 percent of the amount 
        determined under this clause (without regard to any copayment);
                    ``(iii) subject to clause (iv), in the case of an 
                entity that first qualifies as a Federally qualified 
                health center in a center's fiscal year ending after 
                2011--
                            ``(I) for the first such center's fiscal 
                        year, an amount (calculated on a per visit 
                        basis and without the application of a per 
                        visit payment limit or productivity screen) 
                        that is equal to 100 percent of the costs of 
                        furnishing such services during such center's 
                        fiscal year based on the per visit payment 
                        rates established under clause (i) or (ii) for 
                        a comparable period for other such centers 
                        located in the same or adjacent areas with a 
                        similar caseload or, in the absence of such a 
                        center, in accordance with the regulations and 
                        methodology referred to in clause (i) or based 
                        on such other tests of reasonableness (without 
                        the application of a per visit payment limit or 
                        productivity screen) as the Secretary may 
                        specify, less the amount a provider may charge 
                        as described in clause (ii) of section 
                        1866(a)(2)(A), but in no case may the payment 
                        for such services (other than for items and 
                        services described in section 1861(s)(10)(A)) 
                        exceed 80 percent of such costs; and
                            ``(II) for each succeeding center's fiscal 
                        year, the amount calculated in accordance with 
                        clause (ii); and
                    ``(iv) with respect to Federally qualified health 
                center services that are furnished to an individual 
                enrolled with a Medicare Advantage plan under part C 
                pursuant to a written agreement described in section 
                1853(a)(4) (or, in the case of a Medicare Advantage 
                private fee-for-service plan, without such written 
                agreement) the amount (if any) by which--
                            ``(I) the amount of payment that would have 
                        otherwise been provided under clause (i), (ii), 
                        or (iii) (calculated as if `100 percent' were 
                        substituted for `80 percent' in such clauses) 
                        for such services if the individual had not 
                        been enrolled; exceeds
                            ``(II) the amount of the payments received 
                        under such written agreement (or, in the case 
                        of Medicare Advantage private fee-for-service 
                        plans, without such written agreement) for such 
                        services (not including any financial 
                        incentives provided for in such agreement such 
                        as risk pool payments, bonuses, or withholds) 
                        less the amount the Federally qualified health 
                        center may charge as described in section 
                        1857(e)(3)(B);''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services furnished on or after January 1, 2012.

SEC. 3032. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)''; and
            (3) by adding at the end the following new paragraph:
            ``(8) Distribution of additional residency positions.--
                    ``(A) Reductions in limit based on unused 
                positions.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), if a hospital's reference resident 
                        level (as defined in subparagraph (I)(i)) is 
                        less than the otherwise applicable resident 
                        limit (as defined in subparagraph (I)(iii)), 
                        effective for portions of cost reporting 
                        periods occurring on or after July 1, 2011, the 
                        otherwise applicable resident limit shall be 
                        reduced by 65 percent of the difference between 
                        such otherwise applicable resident limit and 
                        such reference resident level.
                            ``(ii) Exceptions.--This subparagraph shall 
                        not apply to--
                                    ``(I) a hospital located in a rural 
                                area (as defined in subsection 
                                (d)(2)(D)(ii)) with fewer than 250 
                                acute care inpatient beds; or
                                    ``(II) a hospital that was part of 
                                a qualifying entity which had a 
                                voluntary residency reduction plan 
                                approved under paragraph (6)(B), if the 
                                hospital demonstrates to the Secretary 
                                that it has a specified plan in place 
                                for filling the unused positions by not 
                                later than 2 years after the date of 
                                enactment of this paragraph.
                    ``(B) Distribution.--
                            ``(i) In general.--The Secretary shall 
                        increase the otherwise applicable resident 
                        limit for each qualifying hospital that submits 
                        an application under this subparagraph by such 
                        number as the Secretary may approve for 
                        portions of cost reporting periods occurring on 
                        or after July 1, 2011. The aggregate number of 
                        increases in the otherwise applicable resident 
                        limit under this subparagraph shall be equal to 
                        the aggregate reduction in such limits 
                        attributable to subparagraph (A) (as estimated 
                        by the Secretary).
                            ``(ii) Requirements.--Subject to clause 
                        (iii), a hospital that receives an increase in 
                        the otherwise applicable resident limit under 
                        this subparagraph shall ensure, during the 5-
                        year period beginning on the date of such 
                        increase, that--
                                    ``(I) the number of full-time 
                                equivalent primary care residents (as 
                                determined by the Secretary) is not 
                                less than the average number of full-
                                time equivalent primary care residents 
                                (as so determined) during the 3 most 
                                recent cost reporting periods ending 
                                prior to the date of enactment of this 
                                paragraph; and
                                    ``(II) not less than 75 percent of 
                                the positions attributable to such 
                                increase are in a primary care or 
                                general surgery residency (as 
                                determined by the Secretary).
                        The Secretary may determine whether a hospital 
                        has met the requirements under this clause 
                        during such 5-year period in such manner and at 
                        such time as the Secretary determines 
                        appropriate, including at the end of such 5-
                        year period.
                            ``(iii) Redistribution of positions if 
                        hospital no longer meets certain 
                        requirements.--In the case where the Secretary 
                        determines that a hospital described in clause 
                        (ii) does not meet either of the requirements 
                        under subclause (I) or (II) of such clause, the 
                        Secretary shall--
                                    ``(I) reduce the otherwise 
                                applicable resident limit of the 
                                hospital by the amount by which such 
                                limit was increased under this 
                                paragraph; and
                                    ``(II) provide for the distribution 
                                of positions attributable to such 
                                reduction in accordance with the 
                                requirements of this paragraph.
                    ``(C) Considerations in redistribution.--In 
                determining for which hospitals the increase in the 
                otherwise applicable resident limit is provided under 
                subparagraph (B), the Secretary shall take into 
                account--
                            ``(i) the demonstration likelihood of the 
                        hospital filling the positions made available 
                        under this paragraph within the first 3 cost 
                        reporting periods beginning on or after July 1, 
                        2011, as determined by the Secretary;
                            ``(ii) whether the hospital is taking part 
                        in an innovative delivery model that promotes 
                        quality and care coordination; and
                            ``(iii) whether the hospital has an 
                        accredited rural training track (as described 
                        in paragraph (4)(H)(iv)).
                    ``(D) Priority for certain areas.--In determining 
                for which hospitals the increase in the otherwise 
                applicable resident limit is provided under 
                subparagraph (B), subject to subparagraph (E), the 
                Secretary shall distribute the increase to hospitals 
                based on the following factors:
                            ``(i) Whether the hospital is located in a 
                        State with a resident-to-population ratio in 
                        the lowest quartile (as determined by the 
                        Secretary).
                            ``(ii) Whether the hospital is located in a 
                        State that is among the top 10 States in terms 
                        of the ratio of--
                                    ``(I) the total population of the 
                                State living in an area designated 
                                (under such section 332(a)(1)(A)) as a 
                                health professional shortage area (as 
                                of the date of enactment of this 
                                paragraph); to
                                    ``(II) the total population of the 
                                State (as determined by the Secretary 
                                based on the most recent available 
                                population data published by the Bureau 
                                of the Census).
                            ``(iii) Whether the hospital is located in 
                        a rural area (as defined in subsection 
                        (d)(2)(D)(ii)).
                    ``(E) Reservation of positions for certain 
                hospitals.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary shall reserve the positions 
                        available for distribution under this paragraph 
                        as follows:
                                    ``(I) 70 percent of such positions 
                                for distribution to hospitals described 
                                in clause (i) of subparagraph (D).
                                    ``(II) 30 percent of such positions 
                                for distribution to hospitals described 
                                in clause (ii) and (iii) of such 
                                subparagraph.
                            ``(ii) Exception if positions not 
                        redistributed within one year.--In the case 
                        where the Secretary does not distribute 
                        positions to hospitals in accordance with 
                        clause (i) by not later than 1 year after the 
                        date of enactment of this paragraph, the 
                        Secretary shall distribute such positions to 
                        other hospitals in accordance with the 
                        considerations described in subparagraph (C) 
                        and the priority described in subparagraph (D).
                    ``(F) Limitation.--A hospital may not receive more 
                than 75 full-time equivalent additional residency 
                positions under this paragraph.
                    ``(G) Application of per resident amounts for 
                primary care and nonprimary care.--With respect to 
                additional residency positions in a hospital 
                attributable to the increase provided under this 
                paragraph, the approved FTE resident amounts are deemed 
                to be equal to the hospital per resident amounts for 
                primary care and nonprimary care computed under 
                paragraph (2)(D) for that hospital.
                    ``(H) Distribution.--The Secretary shall distribute 
                the increase to hospitals under this paragraph not 
                later than 3 years after the date of enactment of this 
                paragraph.
                    ``(I) Definitions.--In this paragraph:
                            ``(i) Reference resident level.--The term 
                        `reference resident level' has the meaning 
                        given such term by the Secretary.
                            ``(ii) Resident level.--The term `resident 
                        level' has the meaning given such term in 
                        paragraph (7)(C)(i).
                            ``(iii) Otherwise applicable resident 
                        limit.--The term `otherwise applicable resident 
                        limit' means, with respect to a hospital, the 
                        limit otherwise applicable under subparagraphs 
                        (F)(i) and (H) of paragraph (4) on the resident 
                        level for the hospital determined without 
                        regard to this paragraph but taking into 
                        account paragraph (7)(A).
                    ``(J) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to the 
                implementation of this paragraph.''.
    (b) IME.--
            (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
        sentence, is amended--
                    (A) by striking ``subsection (h)(7)'' and inserting 
                ``subsections (h)(7) and (h)(8)''; and
                    (B) by striking ``it applies'' and inserting ``they 
                apply''.
            (2) Conforming amendment.--Section 1886(d)(5)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
        adding at the end the following clause:
            ``(x) For discharges occurring on or after the date of 
        enactment of this clause, insofar as an additional payment 
        amount under this subparagraph is attributable to resident 
        positions distributed to a hospital under subsection (h)(8)(B), 
        the indirect teaching adjustment factor shall be computed in 
        the same manner as provided under clause (ii) with respect to 
        such resident positions.''.

SEC. 3033. COUNTING RESIDENT TIME IN OUTPATIENT SETTINGS AND ALLOWING 
              FLEXIBILITY FOR JOINTLY OPERATED RESIDENCY TRAINING 
              PROGRAMS.

    (a) GME.--Section 1886(h)(4) of the Social Security Act (42 U.S.C. 
1395ww(h)(4)) is amended--
            (1) in subparagraph (E)--
                    (A) by striking ``shall be counted and that all the 
                time'' and inserting ``shall be counted and that--
                            ``(i) effective for cost reporting periods 
                        beginning before July 1, 2010, all the time'';
                    (B) in clause (i), as inserted by paragraph (1), by 
                striking the period at the end and inserting ``; and''; 
                and
                    (C) by inserting after clause (i), as so inserted, 
                the following new clause:
                            ``(ii) effective for cost reporting periods 
                        beginning on or after July 1, 2010, all the 
                        time so spent by a resident shall be counted 
                        towards the determination of full-time 
                        equivalency, without regard to the setting in 
                        which the activities are performed, if the 
                        hospital incurs, or, in the case of a jointly 
                        operated residency training program (as defined 
                        in subparagraph (I)(i)), 1 or more hospitals or 
                        1 or more hospitals and 1 or more eligible 
                        training sites (as defined in 
                        subparagraph(I)(1)) continue to incur the costs 
                        of the stipends and fringe benefits of the 
                        resident during the time the resident spends in 
                        that setting.''; and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(I) Jointly operated residency training 
                programs.--
                            ``(i) Definitions.--In this subparagraph:
                                    ``(I) Eligible training site.--The 
                                term `eligible training site' means an 
                                ambulatory or non-hospital training 
                                site at which the training occurs.
                                    ``(II) Jointly operated residency 
                                training program.--The term `jointly 
                                operated residency training program' 
                                means an approved medical residency 
                                training program that is jointly 
                                operated by 1 or more hospitals or by 1 
                                or more hospitals and 1 or more 
                                eligible training sites under a written 
                                agreement which specifies a method for 
                                the equitable distribution of time 
                                spent by the resident in activities 
                                relating to patient care for purposes 
                                of determining the number of full-time 
                                equivalent residents of the hospitals 
                                or of the hospitals and the eligible 
                                training sites, as applicable.
                            ``(ii) Required submission of written 
                        agreement.--Each hospital or eligible training 
                        site participating in the operation of a 
                        jointly operated residency training program 
                        shall submit to the Secretary the written 
                        agreement described in clause (i)(II) upon 
                        request.
                            ``(iii) Limitation.--The Secretary shall 
                        ensure that, in the case of a jointly operated 
                        residency training program, the aggregate 
                        direct graduate medical education payments to 
                        the hospitals or to the hospitals and eligible 
                        training sites with respect to full-time 
                        equivalent residents in such jointly operated 
                        residency training program do not exceed the 
                        aggregate direct graduate medical education 
                        payments which would have been made to the 
                        hospitals or to the hospitals and eligible 
                        training sites if the hospitals or the 
                        hospitals and eligible training sites 
                        independently operated an approved medical 
                        residency training program for such 
                        residents.''.
    (b) IME.--Section 1886(d)(5) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)) is amended--
            (1) in subparagraph (B)(iv)--
                    (A) by striking ``(iv) Effective for discharges 
                occurring on or after October 1, 1997'' and inserting 
                ``(iv)(A) Effective for discharges occurring on or 
                after October 1, 1997, and before July 1, 2010''; and
                    (B) by inserting after subparagraph (A), as 
                inserted by paragraph (1), the following new 
                subparagraph:
                            ``(B) Effective for discharges occurring on 
                        or after July 1, 2010, all the time spent by an 
                        intern or resident in patient care activities 
                        in a nonhospital setting shall be counted 
                        towards the determination of full-time 
                        equivalency if the hospital incurs, or, in the 
                        case of a jointly operated residency training 
                        program (as defined in subparagraph (M)(i)), 1 
                        or more hospitals or 1 or more hospitals and 1 
                        or more eligible training sites (as defined in 
                        subparagraph (M)(i)) continue to incur the 
                        costs of the stipends and fringe benefits of 
                        the intern or resident during the time the 
                        intern or resident spends in that setting.''; 
                        and
                    (C) by adding at the end the following new 
                subparagraph:
    ``(M)(i) In this subparagraph:
            ``(I) The term `eligible training site' means an ambulatory 
        or non-hospital training site at which the training occurs.
            ``(II) The term `jointly operated residency training 
        program' means an approved medical residency training program 
        that is jointly operated by 1 or more hospitals or by 1 or more 
        hospitals and 1 or more eligible training sites under a written 
        agreement which specifies a method for the equitable 
        distribution of time spent by the resident in activities 
        relating to patient care for purposes of determining the number 
        of full-time equivalent residents of the hospitals or of the 
        hospitals and the eligible training sites, as applicable.
    ``(ii) Each hospital or eligible training site participating in the 
operation of a jointly operated residency training program shall submit 
to the Secretary the written agreement described in clause (i)(II) upon 
request.
    ``(iii) The Secretary shall ensure that, in the case of a jointly 
operated residency training program, the aggregate indirect costs of 
medical education payments to the hospitals or to the hospitals and 
eligible training sites with respect to full-time equivalent residents 
in such jointly operated residency training program do not exceed the 
aggregate indirect costs of medical education payments which would have 
been made to the hospitals or to the hospitals and eligible training 
sites if the hospitals or the hospitals and eligible training sites 
independently operated an approved medical residency training program 
for such residents.''.
    (c) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled hospital 
cost reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. 1395ww(h)).

SEC. 3034. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY 
              ACTIVITIES AND OTHER ACTIVITIES.

    (a) GME.--Section 1886(h) of the Social Security Act (42 U.S.C. 
1395ww(h)), as amended by section 3033, is amended--
            (1) in paragraph (4)--
                    (A) in subparagraph (E), by striking ``Such rules'' 
                and inserting ``Subject to subparagraphs (J) and (K), 
                such rules''; and
                    (B) by adding at the end the following new 
                subparagraphs:
                    ``(J) Treatment of certain nonhospital and didactic 
                activities.--Such rules shall provide that all time 
                spent by an intern or resident in an approved medical 
                residency training program in a nonhospital setting 
                that is primarily engaged in furnishing patient care 
                (as defined in paragraph (5)(K)) in non-patient care 
                activities, such as didactic conferences and seminars, 
                but not including research not associated with the 
                treatment or diagnosis of a particular patient, as such 
                time and activities are defined by the Secretary, shall 
                be counted toward the determination of full-time 
                equivalency.
                    ``(K) Treatment of certain other activities.--In 
                determining the hospital's number of full-time 
                equivalent residents for purposes of this subsection, 
                all the time that is spent by an intern or resident in 
                an approved medical residency training program on 
                vacation, sick leave, or other approved leave, as such 
                time is defined by the Secretary, and that does not 
                prolong the total time the resident is participating in 
                the approved program beyond the normal duration of the 
                program shall be counted toward the determination of 
                full-time equivalency.''; and
            (2) in paragraph (5), by adding at the end the following 
        new subparagraph:
                    ``(K) Nonhospital setting that is primarily engaged 
                in furnishing patient care.--The term `nonhospital 
                setting that is primarily engaged in furnishing patient 
                care' means a nonhospital setting in which the primary 
                activity is the care and treatment of patients, as 
                defined by the Secretary.''.
    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42 
U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following 
new clause:
                            ``(x)(I) The provisions of subparagraph (K) 
                        of subsection (h)(4) shall apply under this 
                        subparagraph in the same manner as they apply 
                        under such subsection.
                            ``(II) In determining the hospital's number 
                        of full-time equivalent residents for purposes 
                        of this subparagraph, all the time spent by an 
                        intern or resident in an approved medical 
                        residency training program in non-patient care 
                        activities, such as didactic conferences and 
                        seminars, as such time and activities are 
                        defined by the Secretary, that occurs in the 
                        hospital shall be counted toward the 
                        determination of full-time equivalency if the 
                        hospital--
                                    ``(aa) is recognized as a 
                                subsection (d) hospital;
                                    ``(bb) is recognized as a 
                                subsection (d) Puerto Rico hospital;
                                    ``(cc) is reimbursed under a 
                                reimbursement system authorized under 
                                section 1814(b)(3); or
                                    ``(dd) is a provider-based hospital 
                                outpatient department.
                            ``(III) In determining the hospital's 
                        number of full-time equivalent residents for 
                        purposes of this subparagraph, all the time 
                        spent by an intern or resident in an approved 
                        medical residency training program in research 
                        activities that are not associated with the 
                        treatment or diagnosis of a particular patient, 
                        as such time and activities are defined by the 
                        Secretary, shall not be counted toward the 
                        determination of full-time equivalency.''.
    (c) Effective Dates; Application.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by this section apply to cost reporting periods determined 
        appropriate by the Secretary.
            (2) Application.--The amendments made by this section shall 
        not be applied in a manner that requires reopening of any 
        settled hospital cost reports as to which there is not a 
        jurisdictionally proper appeal pending as of the date of the 
        enactment of this Act on the issue of payment for indirect 
        costs of medical education under section 1886(d)(5)(B) of the 
        Social Security Act or for direct graduate medical education 
        costs under section 1886(h) of such Act.

SEC. 3035. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED AND 
              ACQUIRED HOSPITALS.

    (a) GME.--Section 1886(h)(4)(H) of the Social Security Act (42 
U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the 
following new clauses:
                            ``(vi) Redistribution of residency slots 
                        after a hospital closes.--
                                    ``(I) In general.--Subject to the 
                                succeeding provisions of this clause, 
                                the Secretary shall, by regulation, 
                                establish a process under which, in the 
                                case where a hospital with an approved 
                                medical residency program closes on or 
                                after the date of enactment of the 
                                Balanced Budget Act of 1997, the 
                                Secretary shall increase the otherwise 
                                applicable resident limit under this 
                                paragraph for other hospitals in 
                                accordance with this clause.
                                    ``(II) Priority for hospitals in 
                                certain areas.--Subject to the 
                                succeeding provisions of this clause, 
                                in determining for which hospitals the 
                                increase in the otherwise applicable 
                                resident limit is provided under such 
                                process, the Secretary shall distribute 
                                the increase to hospitals in the 
                                following priority order (with 
                                preference given within each category 
                                to hospitals that are members of the 
                                same affiliated group (as defined by 
                                the Secretary under clause (ii)) as the 
                                closed hospital):
                                            ``(aa) First, to hospitals 
                                        located in the same core-based 
                                        statistical area as, or a core-
                                        based statistical area 
                                        contiguous to, the hospital 
                                        that closed.
                                            ``(bb) Second, to hospitals 
                                        located in the same State as 
                                        the hospital that closed.
                                            ``(cc) Third, to hospitals 
                                        located in the same region of 
                                        the country as the hospital 
                                        that closed.
                                            ``(dd) Fourth, only if the 
                                        Secretary is not able to 
                                        distribute the increase to 
                                        hospitals described in item 
                                        (cc), to qualifying hospitals 
                                        in accordance with the 
                                        provisions of paragraph (8).
                                    ``(III) Requirement hospital likely 
                                to fill position within certain time 
                                period.--The Secretary may only 
                                increase the otherwise applicable 
                                resident limit of a hospital under such 
                                process if the Secretary determines the 
                                hospital has demonstrated a likelihood 
                                of filling the positions made available 
                                under this clause within 3 years.
                                    ``(IV) Limitation.--The aggregate 
                                number of increases in the otherwise 
                                applicable resident limits for 
                                hospitals under this clause shall be 
                                equal to the number of resident 
                                positions in the approved medical 
                                residency programs that closed on or 
                                after the date described in subclause 
                                (I).
                            ``(vii) Special rule for acquired 
                        hospitals.--
                                    ``(I) In general.--In the case of a 
                                hospital that is acquired (through any 
                                mechanism) by another entity with the 
                                approval of a bankruptcy court, during 
                                a period determined by the Secretary 
                                (but not less than 3 years), the 
                                applicable resident limit of the 
                                acquired hospital shall, except as 
                                provided in subclause (II), be the 
                                applicable resident limit of the 
                                hospital that was acquired (as of the 
                                date immediately before the 
                                acquisition), so long as the acquiring 
                                entity continues to operate the 
                                hospital that was acquired and to 
                                furnish services, medical residency 
                                programs, and volume of patients 
                                similar to the services, medical 
                                residency programs, and volume of 
                                patients of the hospital that was 
                                acquired (as determined by the 
                                Secretary) during such period.
                                    ``(II) Limitation.--Subclause (I) 
                                shall only apply in the case where an 
                                acquiring entity waives the right as a 
                                new provider under the program under 
                                this title to have the otherwise 
                                applicable resident limit of the 
                                acquired hospital re-established or 
                                increased.''.
    (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by 
section 3032, is amended by striking ``subsections (h)(7) and (h)(8)'' 
and inserting ``subsections (h)(4)(H)(vi), (h)(4)(H)(vii), (h)(7), and 
(h)(8)''.
    (c) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled hospital 
cost reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. Section 1395ww(h)).
    (d) Effect on Temporary FTE Cap Adjustments.--The Secretary of 
Health and Human Services shall give consideration to the effect of the 
amendments made by this section on any temporary adjustment to a 
hospital's FTE cap under section 413.79(h) of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act) in 
order to ensure that there is no duplication of FTE slots. Such 
amendments shall not affect the application of section 1886(h)(4)(H)(v) 
of the Social Security Act (42 U.S.C. 1395ww(h)(4)(H)(v)).

SEC. 3036. WORKFORCE ADVISORY COMMITTEE.

    (a) Establishment.--The Secretary shall establish a Workforce 
Advisory Committee.
    (b) Membership.--The Committee shall be composed of members 
appointed by the Secretary from among--
            (1) external stakeholders and representatives of health 
        care professionals;
            (2) schools of higher education for health care 
        professionals;
            (3) public health experts;
            (4) health insurers;
            (5) business, labor, State or local workforce investment 
        boards; and
            (6) any other health professional organization or practice 
        the Secretary determines appropriate.
    (c) Duties.--
            (1) National workforce strategy.--
                    (A) In general.--Not later than a date determined 
                appropriate by the Secretary, the Committee shall 
                develop and submit to Congress and the heads of 
                relevant Federal agencies a national workforce strategy 
                that will set the United States on a path toward 
                recruiting, training, and retaining a health care 
                workforce that meets the current and projected health 
                care needs of the United States.
                    (B) Consultation.--
                            (i) Relevant federal agencies.--In 
                        developing the national workforce strategy 
                        under subparagraph (A), the Committee shall 
                        consult closely with the heads of relevant 
                        Federal agencies, such as the Office of the 
                        Administrator of the Health Resources and 
                        Services Administration and the Secretary of 
                        Veterans Affairs, to avoid duplication of 
                        efforts by those agencies and to review Federal 
                        health care workforce policies on a government-
                        wide basis.
                            (ii) State and local entities.--The 
                        Committee shall consult with State and local 
                        entities in developing such national workforce 
                        strategy.
            (2) Study and biannual reports on the health care workforce 
        supply.--
                    (A) Study.--The Committee shall conduct a study on 
                the health care workforce in the United States. Such 
                study shall include an analysis of--
                            (i) the current and projected health care 
                        workforce supply;
                            (ii) the current and projected demand for 
                        health professionals;
                            (iii) the capacity for education and 
                        training of the health care workforce;
                            (iv) the implications of current and 
                        proposed Federal laws and regulations affecting 
                        the health care workforce; and
                            (v) the health care workforce needs of 
                        specific populations, including minorities, 
                        rural and urban populations, and medically 
                        underserved populations.
                    (B) Biannual reports.--
                            (i) In general.--The Committee shall, on a 
                        biannual basis, submit to Congress and the 
                        heads of relevant Federal agencies a report 
                        containing the results of the study conducted 
                        under subparagraph (A), together with 
                        recommendations for such legislation and 
                        administrative action as the Committee 
                        determines appropriate.
                            (ii) Public availability.--The Committee 
                        shall make each report submitted under clause 
                        (i) available to the public.
            (3) Studies and reports on other high-priority topics.--
                    (A) Study.--The Committee shall conduct studies on 
                specific high-priority topics, including--
                            (i) efforts to integrate the health care 
                        workforce into a reformed health care delivery 
                        system;
                            (ii) the implications for the health care 
                        workforce as a result of greater utilization of 
                        health information technology;
                            (iii) nursing workforce capacity;
                            (iv) mental and behavioral health care 
                        workforce capacity; and
                            (v) the geographic distribution of health 
                        care providers.
                    (B) Reports.--
                            (i) In general.--The Committee shall submit 
                        to Congress and the heads of relevant Federal 
                        agencies a report containing the results of 
                        each study conducted under subparagraph (A), 
                        together with recommendations for such 
                        legislation and administrative action as the 
                        Committee determines appropriate.
                            (ii) Public availability.--The Committee 
                        shall make each report submitted under clause 
                        (i) available to the public.
    (d) Definitions.--In this section:
            (1) Committee.--The term ``Committee'' means the Workforce 
        Advisory Committee established under subsection (a).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 3037. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS 
              WORKFORCE NEEDS; EXTENSION OF FAMILY-TO-FAMILY HEALTH 
              INFORMATION CENTERS.

    (a) Authority to Conduct Demonstration Projects.--Title XI of the 
Social Security Act (42 U.S.C. 1301 et seq.) is amended by inserting 
after section 1130A, the following new section:

``SEC. 1130B. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS 
              WORKFORCE NEEDS.

    ``(a) Demonstration Projects To Provide Low-Income Individuals With 
Opportunities for Education, Training, and Career Advancement To 
Address Health Professions Workforce Needs.--
            ``(1) Authority to award grants.--The Secretary, in 
        consultation with the Secretary of Labor, shall award grants to 
        eligible entities to conduct demonstration projects that are 
        designed to provide eligible individuals with the opportunity 
        to obtain education and training for occupations in the health 
        care field that pay well and are expected to either experience 
        labor shortages or be in high demand.
            ``(2) Requirements.--
                    ``(A) Aid and supportive services.--
                            ``(i) In general.--A demonstration project 
                        conducted by an eligible entity awarded a grant 
                        under this section shall, if appropriate, 
                        provide eligible individuals participating in 
                        the project with financial aid, child care, 
                        case management, and other supportive services.
                            ``(ii) Treatment.--Any aid, services, or 
                        incentives provided to an eligible beneficiary 
                        participating in a demonstration project under 
                        this section shall not be considered income, 
                        and shall not be taken into account for 
                        purposes of determining the individual's 
                        eligibility for, or amount of, benefits under 
                        the State TANF program, the State Medicaid 
                        plan, the State Supplemental Nutrition 
                        Assistance Program (SNAP), and any Housing and 
                        Urban Development program.
                    ``(B) Consultation and coordination.--An eligible 
                entity awarded a grant to carry out a demonstration 
                project under this section shall consult with the State 
                agency responsible for administering the State TANF 
                program in carrying out the project and, if the entity 
                is not a local workforce investment board, also shall 
                consult with the local workforce investment board for 
                the area in which the project is conducted and with the 
                State Workforce Investment Board established under 
                section 111 of the Workforce Investment Act of 1998 (29 
                U.S.C. 2821).
                    ``(C) Assurance of opportunities for indian 
                populations.--The Secretary shall award at least 3 
                grants under this subsection to an eligible entity that 
                is an Indian tribe, tribal organization, or Tribal 
                College or University.
            ``(3) Reports and evaluation.--
                    ``(A) Eligible entities.--An eligible entity 
                awarded a grant to conduct a demonstration project 
                under this subsection shall submit interim reports to 
                the Secretary on the activities carried out under the 
                project and a final report on such activities upon the 
                conclusion of the entities' participation in the 
                project. Such reports shall include assessments of the 
                effectiveness of such activities with respect to 
                improving outcomes for the eligible individuals 
                participating in the project and with respect to 
                addressing health professions workforce needs in the 
                areas in which the project is conducted.
                    ``(B) Evaluation.--The Secretary shall, by grant, 
                contract, or interagency agreement, evaluate the 
                demonstration projects conducted under this subsection. 
                Such evaluation shall include identification of 
                successful activities for creating opportunities for 
                developing and sustaining, particularly with respect to 
                low-income individuals and other entry-level workers, a 
                health professions workforce that has accessible entry 
                points, that meets high standards for education, 
                training, certification, and professional development, 
                and that provides increased wages and affordable 
                benefits, including health care coverage, that are 
                responsive to the workforce's needs.
                    ``(C) Report to congress.--The Secretary shall 
                submit interim reports and, based on the evaluation 
                conducted under subparagraph (B), a final report to 
                Congress on the demonstration projects conducted under 
                this subsection.
            ``(4) Definitions.--In this subsection:
                    ``(A) Eligible entity.--The term `eligible entity' 
                means a State, an Indian tribe or tribal organization, 
                an institution of higher education, a local workforce 
                investment board established under section 117 of the 
                Workforce Investment Act of 1998 (29 U.S.C. 2832), or a 
                community-based organization.
                    ``(B) Eligible individual.--
                            ``(i) In general.--The term `eligible 
                        individual' means a individual receiving 
                        assistance under the State TANF program.
                            ``(ii) Other low-income individuals.--Such 
                        term may include other low-income individuals 
                        described by the eligible entity in its 
                        application for a grant under this section.
                    ``(C) Indian tribe; tribal organization.--The terms 
                `Indian tribe' and `tribal organization' have the 
                meaning given such terms in section 4 of the Indian 
                Self-Determination and Education Assistance Act (25 
                U.S.C. 450b).
                    ``(D) Institution of higher education.--The term 
                `institution of higher education' has the meaning given 
                that term in section 101 of the Higher Education Act of 
                1965 (20 U.S.C. 1001).
                    ``(E) State.--The term `State' means each of the 50 
                States, the District of Columbia, the Commonwealth of 
                Puerto Rico, the United States Virgin Islands, Guam, 
                and American Samoa.
                    ``(F) State tanf program.--The term `State TANF 
                program' means the temporary assistance for needy 
                families program funded under part A of title IV.
                    ``(G) Tribal college or university.--The term 
                `Tribal College or University' has the meaning given 
                that term in section 316(b) of the Higher Education Act 
                of 1965 (20 U.S.C. 1059c(b)).
    ``(b) Demonstration Project To Develop Training and Certification 
Programs for Personal or Home Care Aides.--
            ``(1) Authority to award grants.--Not later than 18 months 
        after the date of enactment of this Act, the Secretary shall 
        award grants to eligible entities that are States to conduct 
        demonstration projects for purposes of developing core training 
        competencies and certification programs for personal or home 
        care aides. The Secretary shall--
                    ``(A) evaluate the efficacy of the core training 
                competencies described in paragraph (3)(A) for newly 
                hired personal or home care aides and the methods used 
                by States to implement such core training competencies 
                in accordance with the issues specified in paragraph 
                (3)(B); and
                    ``(B) ensure that the number of hours of training 
                provided by States under the demonstration project with 
                respect to such core training competencies are not less 
                than the number of hours of training required under any 
                applicable State or Federal law or regulation.
            ``(2) Duration.--A demonstration project shall be conducted 
        under this subsection for not less than 3 years.
            ``(3) Core training competencies for personal or home care 
        aides.--
                    ``(A) In general.--The core training competencies 
                for personal or home care aides described in this 
                subparagraph include competencies with respect to the 
                following areas:
                            ``(i) The role of the personal or home care 
                        aide (including differences between a personal 
                        or home care aide employed by an agency and a 
                        personal or home care aide employed directly by 
                        the health care consumer or an independent 
                        provider).
                            ``(ii) Consumer rights, ethics, and 
                        confidentiality (including the role of proxy 
                        decision-makers in the case where a health care 
                        consumer has impaired decision-making 
                        capacity).
                            ``(iii) Communication, cultural and 
                        linguistic competence and sensitivity, problem 
                        solving, behavior management, and relationship 
                        skills.
                            ``(iv) Personal care skills.
                            ``(v) Health care support.
                            ``(vi) Nutritional support.
                            ``(vii) Infection control.
                            ``(viii) Safety and emergency training.
                            ``(ix) Training specific to an individual 
                        consumer's needs (including older individuals, 
                        younger individuals with disabilities, 
                        individuals with developmental disabilities, 
                        individuals with dementia, and individuals with 
                        mental and behavioral health needs).
                            ``(x) Self-Care.
                    ``(B) Implementation.--The implementation issues 
                specified in this subparagraph include the following:
                            ``(i) The length of the training.
                            ``(ii) The appropriate trainer to student 
                        ratio.
                            ``(iii) The amount of instruction time 
                        spent in the classroom as compared to on-site 
                        in the home or a facility.
                            ``(iv) Trainer qualifications.
                            ``(v) Content for a `hands-on' and written 
                        certification exam.
                            ``(vi) Continuing education requirements.
            ``(4) Application and selection criteria.--
                    ``(A) In general.--
                            ``(i) Number of states.--The Secretary 
                        shall enter into agreements with not more than 
                        6 States to conduct demonstration projects 
                        under this subsection.
                            ``(ii) Requirements for states.--An 
                        agreement entered into under clause (i) shall 
                        require that a participating State--
                                    ``(I) implement the core training 
                                competencies described in paragraph 
                                (3)(A); and
                                    ``(II) develop written materials 
                                and protocols for such core training 
                                competencies, including the development 
                                of a certification test for personal or 
                                home care aides who have completed such 
                                training competencies.
                            ``(iii) Consultation and collaboration with 
                        community and vocational colleges.--The 
                        Secretary shall encourage participating States 
                        to consult with community and vocational 
                        colleges regarding the development of curricula 
                        to implement the project with respect to 
                        activities, as applicable, which may include 
                        consideration of such colleges as partners in 
                        such implementation.
                    ``(B) Application and eligibility.--A State seeking 
                to participate in the project shall--
                            ``(i) submit an application to the 
                        Secretary containing such information and at 
                        such time as the Secretary may specify;
                            ``(ii) meet the selection criteria 
                        established under subparagraph (C); and
                            ``(iii) meet such additional criteria as 
                        the Secretary may specify.
                    ``(C) Selection criteria.--In selecting States to 
                participate in the program, the Secretary shall 
                establish criteria to ensure (if applicable with 
                respect to the activities involved)--
                            ``(i) geographic and demographic diversity;
                            ``(ii) that participating States offer 
                        medical assistance for personal care services 
                        under the State Medicaid plan;
                            ``(iii) that the existing training 
                        standards for personal or home care aides in 
                        each participating State--
                                    ``(I) are different from such 
                                standards in the other participating 
                                States; and
                                    ``(II) are different from the core 
                                training competencies described in 
                                paragraph (3)(A);
                            ``(iv) that participating States do not 
                        reduce the number of hours of training required 
                        under applicable State law or regulation after 
                        being selected to participate in the project; 
                        and
                            ``(v) that participating States recruit a 
                        minimum number of eligible health and long-term 
                        care providers to participate in the project.
                    ``(D) Technical assistance.--The Secretary shall 
                provide technical assistance to States in developing 
                written materials and protocols for such core training 
                competencies.
            ``(5) Evaluation and report.--
                    ``(A) Evaluation.--The Secretary shall develop an 
                experimental or control group testing protocol in 
                consultation with an independent evaluation contractor 
                selected by the Secretary. Such contractor shall 
                evaluate--
                            ``(i) the impact of core training 
                        competencies described in paragraph (3)(A), 
                        including curricula developed to implement such 
                        core training competencies, for personal or 
                        home care aides within each participating State 
                        on job satisfaction, mastery of job skills, 
                        beneficiary and family caregiver satisfaction 
                        with services, and additional measures 
                        determined by the Secretary in consultation 
                        with the expert panel;
                            ``(ii) the impact of providing such core 
                        training competencies on the existing training 
                        infrastructure and resources of States; and
                            ``(iii) whether a minimum number of hours 
                        of initial training should be required for 
                        personal or home care aides and, if so, what 
                        minimum number of hours should be required.
                    ``(B) Reports.--
                            ``(i) Report on initial implementation.--
                        Not later than 2 years after the date of 
                        enactment of this Act, the Secretary shall 
                        submit to Congress a report on the initial 
                        implementation of activities conducted under 
                        the demonstration project, including any 
                        available results of the evaluation conducted 
                        under subparagraph (A) with respect to such 
                        activities, together with such recommendations 
                        for legislation or administrative action as the 
                        Secretary determines appropriate.
                            ``(ii) Final report.--Not later than 1 year 
                        after the completion of the demonstration 
                        project, the Secretary shall submit to Congress 
                        a report containing the results of the 
                        evaluation conducted under subparagraph (A), 
                        together with such recommendations for 
                        legislation or administrative action as the 
                        Secretary determines appropriate.
            ``(6) Definitions.--In this subsection:
                    ``(A) Eligible health and long-term care 
                provider.--The term `eligible health and long-term care 
                provider' means a personal or home care agency 
                (including personal or home care public authorities), a 
                nursing home, a home health agency (as defined in 
                section 1861(o)), or any other health care provider the 
                Secretary determines appropriate which--
                            ``(i) is licensed or authorized to provide 
                        services in a participating State; and
                            ``(ii) receives payment for services under 
                        title XIX.
                    ``(B) Personal care services.--The term `personal 
                care services' has the meaning given such term for 
                purposes of title XIX.
                    ``(C) Personal or home care aide.--The term 
                `personal or home care aide' means an individual who 
                helps individuals who are elderly, disabled, ill, or 
                mentally disabled (including an individual with 
                Alzheimer's disease or other dementia) to live in their 
                own home or a residential care facility (such as a 
                nursing home, assisted living facility, or any other 
                facility the Secretary determines appropriate) by 
                providing routine personal care services and other 
                appropriate services to the individual.
                    ``(D) State.--The term `State' has the meaning 
                given that term for purposes of title XIX.
    ``(c) Funding.--
            ``(1) In general.--Subject to paragraph (2), out of any 
        funds in the Treasury not otherwise appropriated, there are 
        appropriated to the Secretary to carry out subsections (a) and 
        (b), $85,000,000 for each of fiscal years 2010 through 2014.
            ``(2) Training and certification programs for personal and 
        home care aides.--With respect to the demonstration projects 
        under subsection (b), the Secretary shall use $5,000,000 of the 
        amount appropriated under paragraph (1) for each of fiscal 
        years 2010 through 2012 to carry out such projects. No funds 
        appropriated under paragraph (1) shall be used to carry out 
        demonstration projects under subsection (b) after fiscal year 
        2012.''.
    (b) Extension of Family-To-Family Health Information Centers.--
Section 501(c)(1)(A)(iii) of the Social Security Act (42 U.S.C. 
701(c)(1)(A)(iii)) is amended by striking ``fiscal year 2009'' and 
inserting ``each of fiscal years 2009 through 2012''.

SEC. 3038. INCREASING TEACHING CAPACITY.

    (a) Teaching Health Centers Training and Enhancement.--Part C of 
title VII of the Public Health Service Act (42 U.S.C. 293k et. seq.) is 
amended by inserting after section 748 the following:

``SEC. 749. TEACHING HEALTH CENTERS DEVELOPMENT GRANTS.

    ``(a) Program Authorized.--The Secretary may award grants under 
this section to teaching health centers for the purpose of establishing 
newly accredited or expanded primary care residency programs.
    ``(b) Amount and Duration.--Grants awarded under this section shall 
be for a term of not more than 2 years and the maximum award may not be 
more than $500,000.
    ``(c) Use of Funds.--Amounts provided under a grant under this 
section shall be used to cover the costs of--
            ``(1) establishing or expanding a primary care residency 
        training program described in subsection (a), including costs 
        associated with--
                    ``(A) curriculum development;
                    ``(B) recruitment, training and retention of 
                residents and faculty:
                    ``(C) accreditation by the Accreditation Council 
                for Graduate Medical Education (ACGME) or the American 
                Osteopathic Association (AOA); and
                    ``(D) faculty salaries during the development 
                phase; and
            ``(2) technical assistance provided by an eligible entity, 
        including costs associated with--
                    ``(A) materials development;
                    ``(B) staff salaries;
                    ``(C) travel; and
                    ``(D) administrative costs.
    ``(d) Application.--A teaching health center seeking a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require.
    ``(e) Priority.--In selecting recipients for grants under this 
section, the Secretary shall give priority to funding residency 
training programs in Federally qualified health centers, rural health 
centers, Indian health centers, newly established residency programs, 
and integrated rural training tracks and rural training tracks and 
residencies with a mission to train physicians for rural and 
underserved practice.
    ``(f) Further Priority for Certain Applications.--With respect to 
applications for grants under this section that are receiving priority 
under subsection (e), the Secretary shall give further preference to 
any such application that documents an existing affiliation agreement 
with an area health education center program as defined in sections 751 
and 799B.
    ``(g) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means an 
        organization capable of providing technical assistance 
        including an area health education center program as defined in 
        sections 751 and 799B.
            ``(2) Primary care residency program.--The term `primary 
        care residency program' means an approved medical residency 
        program under section 1886(h)(5)(A) of the Social Security Act 
        in family medicine, general pediatrics, general internal 
        medicine, or obstetrics and gynecology.
            ``(3) Teaching health center.--The term `teaching health 
        center'--
                    ``(A) means a facility which--
                            ``(i) is a community-based, ambulatory 
                        patient care center; and
                            ``(ii) is establishing a new or expanding 
                        an existing primary care residency program 
                        under section 1886(h)(5)(A) of the Social 
                        Security Act in a specialty which the Secretary 
                        determines is in high-need;
                    ``(B) includes Federally qualified health centers, 
                community health centers, health care for the homeless 
                centers, rural health centers, migrant health centers, 
                Native American health centers operated by the Indian 
                Health Service, Indian tribes and tribal organizations, 
                and other not-for-profit community-based clinical 
                entities.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated, $25,000,000 for fiscal year 2010, $50,000,000 for fiscal 
year 2011, $50,000,000 for fiscal year 2012, and such sums as may be 
necessary for each fiscal year thereafter to carry out this section. 
Not to exceed $5,000,000 annually may be used for technical assistance 
program grants.''.
    (b) National Health Service Corps Teaching Capacity.--Section 
338C(a) of the Public Health Service Act (42 U.S.C. 254m(a)) is amended 
to read as follows:
    ``(a) Service in Full-time Clinical Practice.--Except as provided 
in section 338D, each individual who has entered into a written 
contract with the Secretary under section 338A or 338B shall provide 
service in the full-time clinical practice of such individual's 
profession as a member of the Corps for the period of obligated service 
provided in such contract. For the purpose of calculating time spent in 
full-time clinical practice under this subsection, up to 50 percent of 
time spent teaching by a member of the Corps may be counted toward his 
or her service obligation.''.
    (c) Payments to Qualified Teaching Health Centers.--Title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.), as amended by 
sections 3023 and 3024, is amended by inserting after section 1866E the 
following new section:

  ``payments to qualified teaching health centers for direct graduate 
medical education expenses and other indirect expenses associated with 
    operating approved graduate medical residency training programs

    ``Sec. 1866F.  (a) In General.--The Secretary shall, for purposes 
of increasing training and improving access to primary care services, 
make payments to qualified teaching health centers for direct graduate 
medical education costs and other indirect costs associated with 
operating approved graduate medical residency training programs.
    ``(b) Approved Graduate Medical Residency Training Programs.--An 
approved medical residency training program operated by a qualified 
teaching health center shall meet criteria for accreditation (as 
established by the Accreditation Council for Graduate Medical Education 
or the American Osteopathic Association).
    ``(c) Determination of Payment and Funding Calculations.--The 
Secretary shall determine the basis of payment and any funding 
calculations necessary with respect to payments for direct graduate 
medical education expenses and other indirect expenses associated with 
operating approved graduate medical residency training programs.
    ``(d) Clarification Regarding Relationship to Other Payments for 
Graduate Medical Education.--Payments under this section--
            ``(1) shall be in addition to any payments--
                    ``(A) for the indirect costs of medical education 
                under section 1886(d)(5)(B); and
                    ``(B) for direct graduate medical education costs 
                under section 1886(h); and
            ``(2) shall not be taken into account in applying the 
        limitation on the number of total full time equivalent 
        residents under section 1886(h)(4)(F) and clauses (v) and 
        (vi)(I) of section 1886(d)(5)(B).
    ``(e) Regulations.--The Secretary shall promulgate regulations to 
carry out this section.
    ``(f) Funding.--The Secretary shall provide for the transfer, from 
the Federal Hospital Insurance Trust Fund under section 1817, of 
$230,000,000,000, for payments under this section for the period of 
fiscal years 2011 through 2015. Amounts transferred under the preceding 
sentence shall remain available until expended.
    ``(g) Definitions.--In this section:
            ``(1) Approved graduate medical residency training 
        program.--The term `approved medical residency training 
        program' has the meaning given such term in section 
        1886(h)(5)(A).
            ``(2) Primary care residency program.--The term `primary 
        care residency program' means an approved medical residency 
        training program in family medicine, internal medicine, 
        pediatrics, medicine-pediatrics, obstetrics and gynecology, 
        psychiatry, and geriatrics.
            ``(3) Qualified teaching health center.--
                    ``(A) In general.--The term `qualified teaching 
                health center' means an entity that--
                            ``(i) is a community based, ambulatory 
                        patient care center; and
                            ``(ii) operates a primary care residency 
                        program.
                    ``(B) Inclusion of certain entities.--Such term 
                includes the following:
                            ``(i) A Federally qualified health center 
                        (as defined in section 1861(aa)(4)).
                            ``(ii) A community mental health center (as 
                        defined in section 1861(ff)(3)(B)).
                            ``(iii) A community health center.
                            ``(iv) A health care for the homeless 
                        center.
                            ``(v) A rural health center.
                            ``(vi) A migrant health center.
                            ``(vii) A health center operated by the 
                        Indian Health Service, an Indian tribe or 
                        tribal organization, or an urban Indian 
                        organization (as defined in section 4 of the 
                        Indian Health Care Improvement Act).
                            ``(viii) An entity receiving funds under 
                        title X of the Public Health Service Act.''.

SEC. 3039. GRADUATE NURSE EDUCATION DEMONSTRATION PROGRAM.

    (a) In General.--
            (1) Establishment.--The Secretary shall establish a 
        graduate nurse education demonstration program under title 
        XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) under 
        which eligible hospitals are reimbursed for costs described in 
        paragraph (2).
            (2) Costs described.--
                    (A) In general.--Subject to subparagraph (B), the 
                costs described in this paragraph are educational 
                costs, clinical instruction costs, and other direct and 
                indirect costs of the eligible hospital which are 
                attributable to providing advanced practice nurses with 
                qualified training.
                    (B) Limitation.--With respect to a year, the amount 
                reimbursed under the program may not exceed the amount 
                of costs described in subparagraph (A) that are 
                attributable to an increase in the number of advanced 
                practice nurses enrolled in a program that provides 
                qualified training during the year, as compared to the 
                average number of advanced practice nurses who 
                graduated from a program that provides qualified 
                training in each year during the period beginning on 
                January 1, 2006 and ending on December 31, 2010 (as 
                determined by the Secretary).
    (b) Definitions.--In this section:
            (1) Advanced practice nurse.--The term ``advanced practice 
        nurse'' includes the following:
                    (A) A clinical nurse specialist (as defined in 
                subsection (aa)(5) of section 1861 of the Social 
                Security Act (42 U.S.C. 1395x)).
                    (B) A nurse practitioner (as defined in such 
                subsection).
                    (C) A certified registered nurse anesthetist (as 
                defined in subsection (bb)(2) of such section).
                    (D) A certified nurse midwife.
            (2) Applicable non-hospital community-based care setting.--
        The term ``applicable non-hospital community-based care 
        setting'' means a non-hospital community-based care setting 
        which has entered into an agreement with the eligible hospital 
        under which the non-hospital community-based care setting is 
        responsible for its share of costs described in subsection (a).
            (3) Applicable school of nursing.--The term ``applicable 
        school of nursing'' means an accredited school of nursing (as 
        defined in section 801 of the Public Health Service Act) which 
        has entered into an agreement with the eligible hospital under 
        which the school of nursing is responsible for its share of 
        costs described in subsection (a).
            (4) Eligible hospital.--The term ``eligible hospital'' 
        means a subsection (d) hospital (as defined in section 
        1861(d)(1)(B) of the Social Security Act (42 U.S.C. 
        1395x(d)(1)(B))) that--
                    (A) is affiliated with 1 or more applicable schools 
                of nursing; and
                    (B) is partnered with 2 or more applicable non-
                hospital community-based care settings.
            (5) Program.--The term ``program'' means the graduate nurse 
        education demonstration program established under subsection 
        (a).
            (6) Qualified training.--
                    (A) In general.--The term ``qualified training'' 
                means training--
                            (i) that provides an advanced practice 
                        nurse with the skills necessary to provide 
                        primary care, preventive care, transitional 
                        care, chronic care management, and other 
                        services appropriate for individuals entitled 
                        to, or enrolled for, benefits under part A of 
                        title XVIII of the Social Security Act, or 
                        enrolled under part B of such title; and
                            (ii) subject to subparagraph (B), at least 
                        half of which is provided in a non-hospital 
                        community-based care setting.
                    (B) Waiver of requirement half of training be 
                provided in non-hospital community-based care setting 
                in certain areas.--The Secretary may waive the 
                requirement under subparagraph (A)(ii) with respect to 
                eligible hospitals located in rural and medically 
                underserved areas.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (c) Funding.--There is hereby appropriated to the Secretary, out of 
any funds in the Treasury not otherwise appropriated, $50,000,000 for 
each of fiscal years 2012 through 2015 to carry out this section. Such 
amounts shall remain available without fiscal year limitation.

                 PART V--HEALTH INFORMATION TECHNOLOGY

SEC. 3041. FREE CLINICS AND CERTIFIED EHR TECHNOLOGY.

    (a) Medicare.--
            (1) Payment incentive.--Section 1848(o)(5) of the Social 
        Security Act (42 U.S.C. 1395w-4(o)(5)) is amended--
                    (A) in subparagraph (C), by striking 
                ``Professional.--The term'' and inserting 
                ``professional.--
                            ``(i) In general.--The term''; and
                            (i) by adding at the end the following new 
                        clause:
                            ``(ii) Clarification.--Nothing in this 
                        subsection shall prevent a physician from being 
                        considered an eligible professional for 
                        purposes of this subsection as a result of the 
                        physician furnishing items and services in a 
                        free clinic.''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(D) Free clinic.--
                            ``(i) In general.--The term `free clinic' 
                        means a safety-net health care organization 
                        that--
                                    ``(I) uses volunteers to provide a 
                                range of medical, dental, pharmacy, or 
                                behavioral health services to 
                                economically disadvantaged individuals, 
                                the majority of whom are uninsured or 
                                underinsured; and
                                    ``(II) is an organization described 
                                in section 501(c)(3) of the Internal 
                                Revenue Code of 1986 and exempt from 
                                tax under section 501(a) of such Code 
                                or operates as a program or affiliate 
                                of an organization so described and 
                                exempt.
                            ``(ii) Inclusion of certain other 
                        organizations.--An organization that otherwise 
                        meets the definition under clause (i), except 
                        that it charges a nominal fee to patients, may 
                        still be considered a free clinic for purposes 
                        of subparagraph (C)(ii) if the organization 
                        provides essential services regardless of the 
                        patient's ability to pay for such essential 
                        services.''.
            (2) Payment adjustment.--Section 1848(a)(7)(E)(iii) of the 
        Social Security Act (42 U.S.C. 1395w-4(a)(7)(E)(iii)) is 
        amended--
                    (A) by striking ``professional.--The term'' and 
                inserting ``professional.--The term
                                    ``(I) In general.--The term''; and
                    (B) by adding at the end the following new 
                subclause:
                                    ``(II) Clarification.--Nothing in 
                                this paragraph shall prevent a 
                                physician from being considered an 
                                eligible professional for purposes of 
                                this paragraph as a result of the 
                                physician furnishing items and services 
                                in a free clinic (as defined in 
                                subsection (o)(5)(D)).''.
    (b) Medicaid.--Section 1903(t)(3)(B) of the Social Security Act (42 
U.S.C. 1396b(t)(3)(B)) is amended by adding at the end the following 
flush sentence:
                ``Nothing in this subsection or subsection (a)(3)(F) 
                shall prevent a Medicaid provider described in clauses 
                (i) through (v) from being considered an eligible 
                professional for purposes of this subsection or 
                subsection (a)(3)(F) as a result of the Medicaid 
                provider furnishing items and services in a free clinic 
                (as defined in section 1848(o)(5)(D)).''.

       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.

    Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) 
is amended by adding at the end the following new paragraph:
            ``(10) Update for 2010.--
                    ``(A) In general.--Subject to paragraphs (7)(B), 
                (8)(B), and (9)(B), in lieu of the update to the single 
                conversion factor established in paragraph (1)(C) that 
                would otherwise apply for 2010, the update to the 
                single conversion factor shall be 0.5 percent.
                    ``(B) No effect on computation of conversion factor 
                for 2011 and subsequent years.--The conversion factor 
                under this subsection shall be computed under paragraph 
                (1)(A) for 2011 and subsequent years as if subparagraph 
                (A) had never applied.''.

SEC. 3102. EXTENSION OF THE WORK GEOGRAPHIC INDEX FLOOR AND REVISIONS 
              TO THE PRACTICE EXPENSE GEOGRAPHIC ADJUSTMENT UNDER THE 
              MEDICARE PHYSICIAN FEE SCHEDULE.

    (a) Extension of Work GPCI Floor.--Section 1848(e)(1)(E) of the 
Social Security Act (42 U.S.C. 1395w-4(e)(1)(E)) is amended by striking 
``before January 1, 2010'' and inserting ``before January 1, 2013''.
    (b) Practice Expense Geographic Adjustment for 2010 and Subsequent 
Years.--Section 1848(e)(1) of the Social Security Act (42 U.S.C. 
1395w4(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``and (G)'' and 
        inserting ``(G), and (H)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(H) Practice expense geographic adjustment for 
                2010 and subsequent years.--
                            ``(i) For 2010.--Subject to clause (iii), 
                        for services furnished during 2010, the 
                        employee wage and rent portions of the practice 
                        expense geographic index described in 
                        subparagraph (A)(i) shall reflect \3/4\ of the 
                        difference between the relative costs of 
                        employee wages and rents in each of the 
                        different fee schedule areas and the national 
                        average of such employee wages and rents.
                            ``(ii) For 2011.--Subject to clause (iii), 
                        for services furnished during 2011, the 
                        employee wage and rent portions of the practice 
                        expense geographic index described in 
                        subparagraph (A)(i) shall reflect \1/2\ of the 
                        difference between the relative costs of 
                        employee wages and rents in each of the 
                        different fee schedule areas and the national 
                        average of such employee wages and rents.
                            ``(iii) Hold harmless.--The practice 
                        expense portion of the geographic adjustment 
                        factor applied in a fee schedule area for 
                        services furnished in 2010 or 2011 shall not, 
                        as a result of the application of clause (i) or 
                        (ii), be reduced below the practice expense 
                        portion of the geographic adjustment factor 
                        under subparagraph (A)(i) (as calculated prior 
                        to the application of such clause (i) or (ii), 
                        respectively) for such area for such year.
                            ``(iv) Analysis.--The Secretary shall 
                        analyze current methods of establishing 
                        practice expense geographic adjustments under 
                        subparagraph (A)(i) and evaluate data that 
                        fairly and reliably establishes distinctions in 
                        the costs of operating a medical practice in 
                        the different fee schedule areas. Such analysis 
                        shall include an evaluation of the following:
                                    ``(I) The feasibility of using 
                                actual data or reliable survey data 
                                developed by medical organizations on 
                                the costs of operating a medical 
                                practice, including office rents and 
                                non-physician staff wages, in different 
                                fee schedule areas.
                                    ``(II) The office expense portion 
                                of the practice expense geographic 
                                adjustment described in subparagraph 
                                (A)(i), including the extent to which 
                                types of office expenses are determined 
                                in local markets instead of national 
                                markets.
                                    ``(III) The weights assigned to 
                                each of the categories within the 
                                practice expense geographic adjustment 
                                described in subparagraph (A)(i).
                            ``(v) Revision for 2012 and subsequent 
                        years.--As a result of the analysis described 
                        in clause (iv), the Secretary shall, not later 
                        than January 1, 2012, make appropriate 
                        adjustments to the practice expense geographic 
                        adjustment described in subparagraph (A)(i) to 
                        ensure accurate geographic adjustments across 
                        fee schedule areas, including--
                                    ``(I) basing the office rents 
                                component and its weight on office 
                                expenses that vary among fee schedule 
                                areas; and
                                    ``(II) considering a representative 
                                range of professional and non-
                                professional personnel employed in a 
                                medical office based on the use of the 
                                American Community Survey data or other 
                                reliable data for wage adjustments.
                        Such adjustments shall be made without regard 
                        to adjustments made pursuant to clauses (i) and 
                        (ii) and shall be made in a budget neutral 
                        manner.
                            ``(vi) Special rule.--If the Secretary does 
                        not complete the analysis described in clause 
                        (iv) and make any adjustments the Secretary 
                        determines appropriate for 2012 or a subsequent 
                        year under clause (v), the Secretary shall 
                        apply clauses (ii) and (iii) for services 
                        furnished during 2012 or a subsequent year in 
                        the same manner as such clauses apply for 
                        services furnished during 2011.''.

SEC. 3103. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY CAPS.

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)) is amended by striking ``December 31, 2009'' and inserting 
``December 31, 2011''.

SEC. 3104. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN 
              PHYSICIAN PATHOLOGY SERVICES.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173), and section 136 of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275), is amended by striking 
``and 2009'' and inserting ``2009, 2010, and 2011''.

SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended--
            (1) in the matter preceding clause (i), by striking 
        ``before January 1, 2010'' and inserting ``before January 1, 
        2012''; and
            (2) in each of clauses (i) and (ii), by striking ``before 
        January 1, 2010'' and inserting ``before January 1, 2012''.
    (b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275) is amended 
by striking ``ending on December 31, 2009'' and inserting ``ending on 
December 31, 2011''.
    (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking 
``2010'' and inserting ``2012''.

SEC. 3106. EXTENSION OF CERTAIN PAYMENT RULES FOR LONG-TERM CARE 
              HOSPITAL SERVICES AND OF MORATORIUM ON THE ESTABLISHMENT 
              OF CERTAIN HOSPITALS AND FACILITIES.

    (a) Extension of Certain Payment Rules.--Section 114(c) of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww 
note) is amended by striking ``3-year period'' each place it appears 
and inserting ``5-year period''.
    (b) Extension of Moratorium.--Section 114(d)(1) of such Act (42 
U.S.C. 1395ww note), in the matter preceding subparagraph (A), is 
amended by striking ``3-year period'' and inserting ``5-year period''.

SEC. 3107. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

    Section 138(a)(1) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275) is amended by striking 
``December 31, 2009'' and inserting ``December 31, 2011''.

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.

    (a) Ordering Post-Hospital Extended Care Services.--
            (1) In general.--Section 1814(a)(2) of the Social Security 
        Act (42 U.S.C. 1395f(a)(2)), in the matter preceding 
        subparagraph (A), is amended by striking ``nurse practitioner 
        or clinical nurse specialist'' and inserting ``nurse 
        practitioner, a clinical nurse specialist, or a physician 
        assistant (as those terms are defined in section 
        1861(aa)(5))''.
            (2) Conforming amendment.--Section 1814(a) of the Social 
        Security Act (42 U.S.C. 1395f(a)) is amended, in the second 
        sentence, by striking ``or clinical nurse specialist'' and 
        inserting ``clinical nurse specialist, or physician 
        assistant''.
    (b) Recognition of Attending Physician Assistants as Attending 
Physicians To Serve Hospice Patients.--
            (1) In general.--Section 1861(dd)(3)(B) of the Social 
        Security Act (42 U.S.C. 1395x(dd)(3)(B)) is amended--
                    (A) by striking ``or nurse'' and inserting ``, the 
                nurse''; and
                    (B) by inserting ``, or the physician assistant (as 
                defined in such subsection)'' after ``subsection 
                (aa)(5))''.
            (2) Clarification of hospice role of physician 
        assistants.--Section 1814(a)(7)(A)(i)(I) of the Social Security 
        Act (42 U.S.C. 1395f(a)(7)(A)(i)(I)) is amended by inserting 
        ``or a physician assistant'' after ``a nurse practitioner''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 3109. RECOGNITION OF CERTIFIED DIABETES EDUCATORS AS CERTIFIED 
              PROVIDERS FOR PURPOSES OF MEDICARE DIABETES OUTPATIENT 
              SELF-MANAGEMENT TRAINING SERVICES.

    (a) In General.--Section 1861(qq) of the Social Security Act (42 
U.S.C. 1395x(qq)) is amended--
            (1) in paragraph (1), by inserting ``or by a certified 
        diabetes educator (as defined in paragraph (3))'' after 
        ``paragraph (2)(B)''; and
            (2) by adding at the end the following new paragraphs:
            ``(3) For purposes of paragraph (1), the term `certified 
        diabetes educator' means an individual who--
                    ``(A) is licensed or registered by the State in 
                which the services are performed as a health care 
                professional;
                    ``(B) specializes in teaching individuals with 
                diabetes to develop the necessary skills and knowledge 
                to manage the individual's diabetic condition; and
                    ``(C) is certified as a diabetes educator by a 
                recognized certifying body (as defined in paragraph 
                (4)).
            ``(4)(A) For purposes of paragraph (3)(C), the term 
        `recognized certifying body' means--
                            ``(i) the National Certification Board for 
                        Diabetes Educators, or
                            ``(ii) a certifying body for diabetes 
                        educators, which is recognized by the Secretary 
                        as authorized to grant certification of 
                        diabetes educators for purposes of this 
                        subsection pursuant to standards established by 
                        the Secretary,
                if the Secretary determines such Board or body, 
                respectively, meets the requirement of subparagraph 
                (B).
                    ``(B) The National Certification Board for Diabetes 
                Educators or a certifying body for diabetes educators 
                meets the requirement of this subparagraph, with 
                respect to the certification of an individual, if the 
                Board or body, respectively, is incorporated and 
                registered to do business in the United States and 
                requires as a condition of such certification each of 
                the following:
                            ``(i) The individual has a qualifying 
                        credential in a specified health care 
                        profession.
                            ``(ii) The individual has professional 
                        practice experience in diabetes self-management 
                        training that includes a minimum number of 
                        hours and years of experience in such training.
                            ``(iii) The individual has successfully 
                        completed a national certification examination 
                        offered by such entity.
                            ``(iv) The individual periodically renews 
                        certification status following initial 
                        certification.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to diabetes outpatient self-management training services 
furnished on or after January 1, 2011.

SEC. 3110. EXEMPTION OF CERTAIN PHARMACIES FROM ACCREDITATION 
              REQUIREMENTS.

    (a) In General.--Section 1834(a)(20) of the Social Security Act (42 
U.S.C. 1395m(a)(20)), as added by section 154(b)(1)(A) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 100-
275), is amended--
            (1) in subparagraph (F)(i), by inserting ``and subparagraph 
        (G)'' after ``clause (ii)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(G) Application of accreditation requirement to 
                certain pharmacies.--
                            ``(i) In general.--In implementing quality 
                        standards under this paragraph--
                                    ``(I) subject to subclause (II), in 
                                applying such standards and the 
                                accreditation requirement of 
                                subparagraph (F)(i) with respect to 
                                pharmacies described in clause (ii) 
                                furnishing such items and services, 
                                such standards and accreditation 
                                requirement shall not apply to such 
                                pharmacies; and
                                    ``(II) the Secretary may apply to 
                                such pharmacies an alternative 
                                accreditation requirement established 
                                by the Secretary if the Secretary 
                                determines such alternative 
                                accreditation requirement is more 
                                appropriate for such pharmacies.
                            ``(ii) Pharmacies described.--A pharmacy 
                        described in this clause is a pharmacy that 
                        meets each of the following criteria:
                                    ``(I) The total billings by the 
                                pharmacy for such items and services 
                                under this title are less than 5 
                                percent of total pharmacy sales, as 
                                determined based on the average total 
                                pharmacy sales for the previous 3 
                                calendar years, 3 fiscal years, or 
                                other yearly period specified by the 
                                Secretary.
                                    ``(II) The pharmacy has been 
                                enrolled under section 1866(j) as a 
                                supplier of durable medical equipment, 
                                prosthetics, orthotics, and supplies, 
                                has been issued (which may include the 
                                renewal of) a provider number for at 
                                least 5 years, and for which a final 
                                adverse action (as defined in section 
                                424.57(a) of title 42, Code of Federal 
                                Regulations) has not been imposed in 
                                the past 5 years.
                                    ``(III) The pharmacy submits to the 
                                Secretary an attestation, in a form and 
                                manner, and at a time, specified by the 
                                Secretary, that the pharmacy meets the 
                                criteria described in subclauses (I) 
                                and (II). Such attestation shall be 
                                subject to section 1001 of title 18, 
                                United States Code.
                                    ``(IV) The pharmacy agrees to 
                                submit materials as requested by the 
                                Secretary, or during the course of an 
                                audit conducted on a random sample of 
                                pharmacies selected annually, to verify 
                                that the pharmacy meets the criteria 
                                described in subclauses (I) and (II). 
                                Materials submitted under the preceding 
                                sentence shall include a certification 
                                by an accountant on behalf of the 
                                pharmacy or the submission of tax 
                                returns filed by the pharmacy during 
                                the relevant periods, as requested by 
                                the Secretary.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to items or services furnished on or after January 1, 
        2010.
            (2) Administration.--Notwithstanding any other provision of 
        law, the Secretary may implement the amendments made by 
        subsection (a) by program instruction or otherwise.

SEC. 3111. PART B SPECIAL ENROLLMENT PERIOD FOR DISABLED TRICARE 
              BENEFICIARIES.

    (a) In General.--
            (1) In general.--Section 1837 of the Social Security Act 
        (42 U.S.C. 1395p) is amended by adding at the end the following 
        new subsection:
    ``(l)(1) In the case of any individual who is a covered beneficiary 
(as defined in section 1072(5) of title 10, United States Code) at the 
time the individual is entitled to part A under section 226(b) or 
section 226A and who is eligible to enroll but who has elected not to 
enroll (or to be deemed enrolled) during the individual's initial 
enrollment period, there shall be a special enrollment period described 
in paragraph (2).
    ``(2) The special enrollment period described in this paragraph, 
with respect to an individual, is the 12-month period beginning on the 
day after the last day of the initial enrollment period of the 
individual or, if later, the 12-month period beginning with the month 
the individual is notified of enrollment under this section.
    ``(3) In the case of an individual who enrolls during the special 
enrollment period provided under paragraph (1), the coverage period 
under this part shall begin on the first day of the month in which the 
individual enrolls, or, at the option of the individual, the first 
month after the end of the individual's initial enrollment period.
    ``(4) An individual may only enroll during the special enrollment 
period provided under paragraph (1) one time during the individual's 
lifetime.
    ``(5) The Secretary shall ensure that the materials relating to 
coverage under this part that are provided to an individual described 
in paragraph (1) prior to the individual's initial enrollment period 
contain information concerning the impact of not enrolling under this 
part, including the impact on health care benefits under the TRICARE 
program under chapter 55 of title 10, United States Code.
    ``(6) The Secretary of Defense shall collaborate with the Secretary 
of Health and Human Services and the Commissioner of Social Security to 
provide for the accurate identification of individuals described in 
paragraph (1). The Secretary of Defense shall provide such individuals 
with notification with respect to this subsection. The Secretary of 
Defense shall collaborate with the Secretary of Health and Human 
Services and the Commissioner of Social Security to ensure appropriate 
follow up pursuant to any notification provided under the preceding 
sentence.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to elections made with respect to initial 
        enrollment periods that end after the date of the enactment of 
        this Act.
    (b) Waiver of Increase of Premium.--Section 1839(b) of the Social 
Security Act (42 U.S.C. 1395r(b)) is amended by striking ``section 
1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of section 
1837''.

SEC. 3112. PAYMENT FOR BONE DENSITY TESTS.

    (a) Payment.--
            (1) In general.--Section 1848 of the Social Security Act 
        (42 U.S.C. 1395w-4) is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (4)(B), by inserting ``, 
                        and for 2010 and 2011, dual-energy x-ray 
                        absorptiometry services (as described in 
                        paragraph (6))'' before the period at the end; 
                        and
                            (ii) by adding at the end the following new 
                        paragraph:
            ``(6) Treatment of bone mass scans.--For dual-energy x-ray 
        absorptiometry services (identified in 2006 by HCPCS codes 
        76075 and 76077 (and any succeeding codes)) furnished during 
        2010 and 2011, instead of the payment amount that would 
        otherwise be determined under this section for such years, the 
        payment amount shall be equal to 70 percent of the product of--
                    ``(A) the relative value for the service (as 
                determined in subsection (c)(2)) for 2006;
                    ``(B) the conversion factor (established under 
                subsection (d)) for 2006; and
                    ``(C) the geographic adjustment factor (established 
                under subsection (e)(2)) for the service for the fee 
                schedule area for 2010 and 2011, respectively.''; and
                    (B) in subsection (c)(2)(B)(iv)--
                            (i) in subclause (II), by striking ``and'' 
                        at the end;
                            (ii) in subclause (III), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(IV) subsection (b)(6) shall not 
                                be taken into account in applying 
                                clause (ii)(II) for 2010 or 2011.''.
            (2) Implementation.--Notwithstanding any other provision of 
        law, the Secretary may implement the amendments made by 
        paragraph (1) by program instruction or otherwise.
    (b) Study and Report by the Institute of Medicine.--
            (1) In general.--The Secretary of Health and Human Services 
        is authorized to enter into an agreement with the Institute of 
        Medicine of the National Academies to conduct a study on the 
        ramifications of Medicare payment reductions for dual-energy x-
        ray absorptiometry (as described in section 1848(b)(6) of the 
        Social Security Act, as added by subsection (a)(1)) during 
        2007, 2008, and 2009 on beneficiary access to bone mass density 
        tests.
            (2) Report.--An agreement entered into under paragraph (1) 
        shall provide for the Institute of Medicine to submit to the 
        Secretary and to Congress a report containing the results of 
        the study conducted under such paragraph.

SEC. 3113. REVISION TO THE MEDICARE IMPROVEMENT FUND.

    Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C. 
1395iii) is amended by striking ``$22,290,000,000'' and inserting 
``$0''.

SEC. 3114. TREATMENT OF CERTAIN COMPLEX DIAGNOSTIC LABORATORY TESTS.

    (a) Treatment.--
            (1) In general.--Notwithstanding sections 1862(a)(14) and 
        1866(a)(1)(H)(i) of the Social Security Act (42 U.S.C. 
        1395y(a)(14) and 1395cc(a)(1)(H)(i)), in the case that a 
        laboratory performs a covered complex diagnostic laboratory 
        test, with respect to a specimen collected from an individual 
        during a period in which the individual is a patient of a 
        hospital, if the test is performed after such period the 
        Secretary of Health and Human Services shall treat such test, 
        for purposes of providing direct payment to the laboratory 
        under section 1833(h) or 1848 of such Act (42 U.S.C. 1395l(h) 
        or 1395w-4), as if such specimen had been collected directly by 
        the laboratory.
            (2) Covered complex diagnostic laboratory test defined.--
        For purposes of paragraph (1), the term ``covered complex 
        diagnostic laboratory test'' means a diagnostic laboratory test 
        that--
                    (A) is an analysis of gene or protein expression, 
                topographic genotyping, or a cancer chemotherapy 
                sensitivity assay;
                    (B) is described in section 1861(s)(3) of the 
                Social Security Act (42 U.S.C. 1395x(s)(3));
                    (C) is performed only by the laboratory offering 
                the test; and
                    (D) is not furnished by the hospital where the 
                specimen was collected to a patient of such hospital, 
                directly or under arrangements (as defined in section 
                1861(w)(1) of such Act (42 U.S.C. 1395x(w)(1))) made by 
                such hospital.
    (b) Effective Date.--
            (1) In general.--The provisions of subsection (a) shall 
        apply to tests furnished on or after July 1, 2011, and before 
        the earlier of--
                    (A) July 1, 2013; and
                    (B) the date that the Chief Actuary of the Centers 
                for Medicare & Medicaid Services submits a report to 
                the Committee on Ways and Means and the Committee on 
                Energy and Commerce of the House of Representatives and 
                the Committee on Finance of the Senate and to the 
                Secretary of Health and Human Services pursuant to 
                paragraph (2).
            (2) Report if spending limit reached.--
                    (A) In general.--The Chief Actuary of the Centers 
                for Medicare & Medicaid Services shall monitor 
                expenditures under title XVIII of the Social Security 
                Act during the 2-year period beginning on July 1, 2011 
                by reason of the provisions of subsection (a). If the 
                Chief Actuary determines that either of the conditions 
                described in subparagraph (B) have been met with 
                respect to such 2-year period, the Chief Actuary shall 
                submit a report to the Committee on Ways and Means and 
                the Committee on Energy and Commerce of the House of 
                Representatives and the Committee on Finance of the 
                Senate and to the Secretary of Health and Human 
                Services that includes a statement regarding such 
                determination.
                    (B) Conditions.--The conditions described in this 
                subparagraph are, with respect to the 2-year period 
                described in subparagraph (A), the following 
                conditions:
                            (i) That expenditures under title XVIII of 
                        the Social Security Act during such period by 
                        reason of the provisions of subsection (a) have 
                        reached $100,000,000.
                            (ii) That payments to laboratories under 
                        such title during such period by reason of such 
                        provisions have reached $100,000,000.

SEC. 3115. IMPROVED ACCESS FOR CERTIFIED-MIDWIFE SERVICES.

    Section 1833(a)(1)(K) of the Social Security Act (42 U.S.C. 
1395l(a)(1)(K)) is amended by inserting ``(or 100 percent for services 
furnished on or after January 1, 2011)'' after ``1992, 65 percent''.

SEC. 3116. WORKING GROUP ON ACCESS TO EMERGENCY MEDICAL CARE.

    (a) In General.--Not later than 60 days after the date of enactment 
of this Act, the Secretary of Health and Human Services (referred to in 
this section as the ``Secretary'') shall establish a Working Group on 
Access to Emergency Medical Care (referred to in this section as the 
``working group'').
    (b) Membership.--The membership of the working group shall include 
not less than 2 individuals from each of the following:
            (1) Representatives of emergency room physicians, emergency 
        room nurses, and other health care professionals who provide 
        emergency medical services.
            (2) Elected or appointed officials (at the Federal, State, 
        and local levels) who are involved in programs and issues 
        relating to the provision of emergency medical services.
            (3) Health care consumer advocates.
            (4) Representatives of hospitals and health systems that 
        provide emergency medical services.
    (c) Compensation.--The members shall serve without compensation.
    (d) Administrative Support.--The Department of Health and Human 
Services shall provide appropriate administrative support and technical 
assistance to the working group. The working group may use the 
facilities of the Department of Health and Human Services, with or 
without reimbursement (as determined by the Secretary).
    (e) Duties.--
            (1) Study.--The working group shall identify and examine--
                    (A) barriers contributing to delays in timely 
                processing of patients requiring admission as an 
                inpatient of a hospital who initially sought care 
                through the emergency department of such hospital;
                    (B) factors in the health care delivery, financing, 
                and legal systems that impede or prevent effective 
                delivery of screening and stabilization services 
                furnished in hospitals that have emergency departments 
                pursuant to the requirements under section 1867 of the 
                Social Security Act (42 U.S.C. 1395dd) (commonly 
                referred to as the ``Emergency Medical Treatment and 
                Labor Act'' or ``EMTALA''); and
                    (C) best practices to improve patient flow within 
                hospitals.
            (2) Recommendations.--The working group shall develop 
        recommendations for admission, boarding, and diversion 
        standards for hospitals to follow in the delivery of emergency 
        care to patients, as well as relevant guidelines, measures, and 
        incentives to ensure proper implementation, monitoring, and 
        enforcement of such standards.
    (f) Report.--Not later than 18 months after establishment of the 
working group under subsection (a), the working group shall submit to 
Congress and the Secretary a report containing a detailed description 
of the recommended standards, guidelines, measures, and incentives 
developed under subsection (e)(2), any best practices identified under 
subsection (e)(1)(C), and recommendations for such legislative and 
administrative actions as the working group considers appropriate, 
including recommendations regarding--
            (1) Federal programs, policies, and financing needed to 
        assure the availability of screening and stabilization services 
        furnished in hospitals that have emergency departments pursuant 
        to EMTALA (as described under subsection (e)(1)(B)); and
            (2) coordination of Federal, State, and local programs for 
        responding to disasters and emergencies.
    (g) Termination.--The working group shall terminate upon submission 
of the report described under subsection (f).

                       PART II--RURAL PROTECTIONS

SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

    (a) In General.--Section 1833(t)(7)(D)(i) of the Social Security 
Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended--
            (1) in subclause (II)--
                    (A) in the first sentence, by striking ``2010''and 
                inserting ``2012''; and
                    (B) in the second sentence, by striking ``or 2009'' 
                and inserting ``, 2009, 2010, or 2011''; and
            (2) in subclause (III), by striking ``January 1, 2010'' and 
        inserting ``January 1, 2012''.
    (b) Permitting All Sole Community Hospitals To Be Eligible for Hold 
Harmless.--Section 1833(t)(7)(D)(i)(III) of the Social Security Act (42 
U.S.C. 1395l(t)(7)(D)(i)(III)) is amended by adding at the end the 
following new sentence: ``In the case of covered OPD services furnished 
on or after January 1, 2010, and before January 1, 2012, the preceding 
sentence shall be applied without regard to the 100-bed limitation.''.

SEC. 3122. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR CERTAIN 
              CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO 
              HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.

    Section 416(b) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (42 U.S.C. 1395l-4), as amended by section 
105 of division B of the Tax Relief and Health Care Act of 2006 (42 
U.S.C. 1395l note) and section 107 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (42 U.S.C. 1395l note), is amended by inserting 
``or during the 2-year period beginning on July 1, 2010'' before the 
period at the end.

SEC. 3123. EXTENSION OF THE RURAL COMMUNITY HOSPITAL DEMONSTRATION 
              PROGRAM.

    (a) Two-year Extension.--Section 410A of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 
117 Stat. 2272) is amended by adding at the end the following new 
subsection:
    ``(g) Two-Year Extension of Demonstration Program.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, the Secretary shall conduct the demonstration 
        program under this section for an additional 2-year period (in 
        this section referred to as the `2-year extension period') that 
        begins on the date immediately following the last day of the 
        initial 5-year period under subsection (a)(5).
            ``(2) Expansion of demonstration states.--Notwithstanding 
        subsection (a)(2), during the 2-year extension period, the 
        program shall be conducted in rural areas in any State.
            ``(3) Increase in maximum number of hospitals participating 
        in the demonstration program.--Notwithstanding subsection 
        (a)(4), during the 2-year extension period, not more than 30 
        rural community hospitals may participate in the demonstration 
        program under this section.
            ``(4) No affect on hospitals in demonstration program on 
        date of enactment.--In the case of a rural community hospital 
        that is participating in the demonstration program under this 
        section as of the last day of the initial 5-year period, the 
        Secretary shall provide for the continued participation of such 
        rural community hospital in the demonstration program during 
        the 2-year extension period unless the rural community hospital 
        makes an election, in such form and manner as the Secretary may 
        specify, to discontinue such participation.''.
    (b) Conforming Amendments.--Subsection (a)(5) of section 410A of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108-173; 117 Stat. 2272) is amended by inserting ``(in 
this section referred to as the `initial 5-year period') and, as 
provided in subsection (g), for the 2-year extension period'' after 
``5-year period''.
    (c) Technical Amendments.--
            (1) Subsection (b) of section 410A of the Medicare 
        Prescription Drug, Improvement, and Modernization Act of 2003 
        (Public Law 108-173; 117 Stat. 2272) is amended--
                    (A) in paragraph (1)(B)(ii), by striking ``2)'' and 
                inserting ``2))''; and
                    (B) in paragraph (2), by inserting ``cost'' before 
                ``reporting period'' the first place such term appears 
                in each of subparagraphs (A) and (B).
            (2) Subsection (f)(1) of section 410A of the Medicare 
        Prescription Drug, Improvement, and Modernization Act of 2003 
        (Public Law 108-173; 117 Stat. 2272) is amended--
                    (A) in subparagraph (A)(ii), by striking 
                ``paragraph (2)'' and inserting ``subparagraph (B)''; 
                and
                    (B) in subparagraph (B), by striking ``paragraph 
                (1)(B)'' and inserting ``subparagraph (A)(ii)''.

SEC. 3124. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) PROGRAM.

    (a) Extension of Payment Methodology.--Section 1886(d)(5)(G) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended--
            (1) in clause (i), by striking ``October 1, 2011'' and 
        inserting ``October 1, 2013''; and
            (2) in clause (ii)(II), by striking ``October 1, 2011'' and 
        inserting ``October 1, 2013''.
    (b) Conforming Amendments.--
            (1) Extension of target amount.--Section 1886(b)(3)(D) of 
        the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is 
        amended--
                    (A) in the matter preceding clause (i), by striking 
                ``October 1, 2011'' and inserting ``October 1, 2013''; 
                and
                    (B) in clause (iv), by striking ``through fiscal 
                year 2011'' and inserting ``through fiscal year 2013''.
            (2) Permitting hospitals to decline reclassification.--
        Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 
        1993 (42 U.S.C. 1395ww note) is amended by striking ``through 
        fiscal year 2011'' and inserting ``through fiscal year 2013''.

SEC. 3125. TEMPORARY IMPROVEMENTS TO THE MEDICARE INPATIENT HOSPITAL 
              PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended--
            (1) in subparagraph (A), by inserting ``or (D)'' after 
        ``subparagraph (B)'';
            (2) in subparagraph (B), in the matter preceding clause 
        (i), by striking ``The Secretary'' and inserting ``For 
        discharges occurring in fiscal years 2005 through 2010 and for 
        discharges occurring in fiscal year 2013 and subsequent fiscal 
        years, the Secretary'';
            (3) in subparagraph (C)(i)--
                    (A) by inserting ``(or, with respect to fiscal 
                years 2011 and 2012, 15 road miles)'' after ``25 road 
                miles''; and
                    (B) by inserting ``(or, with respect to fiscal 
                years 2011 and 2012, 1,500 discharges of individuals 
                entitled to, or enrolled for, benefits under part A)'' 
                after ``800 discharges''; and
            (4) by adding at the end the following new subparagraph:
                    ``(D) Temporary applicable percentage increase.--
                For discharges occurring in fiscal years 2011 and 2012, 
                the Secretary shall determine an applicable percentage 
                increase for purposes of subparagraph (A) using a 
                continuous linear sliding scale ranging from 25 percent 
                for low-volume hospitals with 200 or fewer discharges 
                of individuals entitled to, or enrolled for, benefits 
                under part A in the fiscal year to 0 percent for low-
                volume hospitals with greater than 1,500 discharges of 
                such individuals in the fiscal year.''.

SEC. 3126. IMPROVEMENTS TO THE DEMONSTRATION PROJECT ON COMMUNITY 
              HEALTH INTEGRATION MODELS IN CERTAIN RURAL COUNTIES.

    (a) Removal of Limitation on Number of Eligible Counties 
Selected.--Subsection (d)(3) of section 123 of the Medicare 
Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395i-4 
note) is amended by striking ``not more than 6''.
    (b) Removal of References to Rural Health Clinic Services and 
Inclusion of Physicians' Services in Scope of Demonstration Project.--
Such section 123 is amended--
            (1) in subsection (d)(4)(B)(i)(3), by striking subclause 
        (III); and
            (2) in subsection (j)--
                    (A) in paragraph (8), by striking subparagraph (B) 
                and inserting the following:
                    ``(B) Physicians' services (as defined in section 
                1861(q) of the Social Security Act (42 U.S.C. 
                1395x(q)).'';
                    (B) by striking paragraph (9); and
                    (C) by redesignating paragraph (10) as paragraph 
                (9).

SEC. 3127. MEDPAC STUDY ON ADEQUACY OF MEDICARE PAYMENTS FOR HEALTH 
              CARE PROVIDERS SERVING IN RURAL AREAS.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study on the adequacy of payments for items and services furnished by 
providers of services and suppliers in rural areas under the Medicare 
program under title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.). Such study shall include an analysis of--
            (1) any adjustments in payments to providers of services 
        and suppliers that furnish items and services in rural areas;
            (2) access by Medicare beneficiaries to items and services 
        in rural areas;
            (3) the adequacy of payments to providers of services and 
        suppliers that furnish items and services in rural areas; and
            (4) the quality of care furnished in rural areas.
    (b) Report.--Not later than January 1, 2011, the Medicare Payment 
Advisory Commission shall submit to Congress a report containing the 
results of the study conducted under subsection (a). Such report shall 
include recommendations on appropriate modifications to any adjustments 
in payments to providers of services and suppliers that furnish items 
and services in rural areas, together with recommendations for such 
legislation and administrative action as the Medicare Payment Advisory 
Commission determines appropriate.

SEC. 3128. TECHNICAL CORRECTION RELATED TO CRITICAL ACCESS HOSPITAL 
              SERVICES.

    (a) In General.--Subsections (g)(2)(A) and (l)(8) of section 1834 
of the Social Security Act (42 U.S.C. 1395m) are each amended by 
inserting ``101 percent of'' before ``the reasonable costs''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of section 405(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2266).

SEC. 3129. EXTENSION OF AND REVISIONS TO MEDICARE RURAL HOSPITAL 
              FLEXIBILITY PROGRAM.

    (a) Authorization.--Section 1820(j) of the Social Security Act (42 
U.S.C. 1395i-4(j)) is amended--
            (1) by striking ``2010, and for'' and inserting ``2010, 
        for''; and
            (2) by inserting ``and for making grants to all States 
        under subsection (g), such sums as may be necessary in each of 
        fiscal years 2011 and 2012, to remain available until 
        expended'' before the period at the end.
    (b) Use of Funds.--Section 1820(g)(3) of the Social Security Act 
(42 U.S.C. 1395i-4(g)(3)) is amended--
            (1) in subparagraph (A), by inserting ``and to assist such 
        hospitals in participating in delivery system reforms under the 
        provisions of and amendments made by the America's Healthy 
        Future Act of 2009, such as value-based purchasing programs, 
        accountable care organizations under section 1899, the National 
        pilot program on payment bundling under section 1866D, and 
        other delivery system reform programs determined appropriate by 
        the Secretary'' before the period at the end; and
            (2) in subparagraph (E)--
                    (A) by striking ``, and to offset'' and inserting 
                ``, to offset''; and
                    (B) by inserting ``and to participate in delivery 
                system reforms under the provisions of and amendments 
                made by the America's Healthy Future Act of 2009, such 
                as value-based purchasing programs, accountable care 
                organizations under section 1899, the National pilot 
                program on payment bundling under section 1866D, and 
                other delivery system reform programs determined 
                appropriate by the Secretary'' before the period at the 
                end.
    (c) Effective Date.--The amendments made by this section shall 
apply to grants made on or after January 1, 2010.

                  PART III--IMPROVING PAYMENT ACCURACY

SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

    (a) Rebasing Home Health Prospective Payment Amount.--
            (1) In general.--Section 1895(b)(3)(A) of the Social 
        Security Act (42 U.S.C. 1395fff(b)(3)(A)) is amended--
                    (A) in clause (i)(III), by striking ``For periods'' 
                and inserting ``Subject to clause (iii), for periods''; 
                and
                    (B) by adding at the end the following new clause:
                            ``(iii) Adjustment for 2013 and subsequent 
                        years.--
                                    ``(I) In general.--Subject to 
                                subclause (II), for 2013 and subsequent 
                                years, the amount (or amounts) that 
                                would otherwise be applicable under 
                                clause (i)(III) shall be adjusted by a 
                                percentage determined appropriate by 
                                the Secretary to reflect such factors 
                                as changes in the number of visits in 
                                an episode, the mix of services in an 
                                episode, the level of intensity of 
                                services in an episode, the average 
                                cost of providing care per episode, and 
                                other factors that the Secretary 
                                considers to be relevant. In conducting 
                                the analysis under the preceding 
                                sentence, the Secretary shall consider 
                                differences between hospital-based and 
                                freestanding agencies, between for-
                                profit and nonprofit agencies, and 
                                between the resource costs of urban and 
                                rural agencies. Such adjustment shall 
                                be made before the update under 
                                subparagraph (B) is applied for the 
                                year.
                                    ``(II) Transition.--The Secretary 
                                shall provide for a 4-year phase-in (in 
                                equal increments) of the adjustment 
                                under subclause (I), with such 
                                adjustment being fully implemented for 
                                2016. During each year of such phase-
                                in, the amount of any adjustment under 
                                subclause (I) for the year may not 
                                exceed 3.5 percent of the amount (or 
                                amounts) applicable under clause 
                                (i)(III) as of the date of enactment of 
                                the America's Healthy Future Act of 
                                2009.''.
            (2) MedPAC study and report.--
                    (A) Study.--The Medicare Payment Advisory 
                Commission shall conduct a study on the implementation 
                of the amendments made by paragraph (1). Such study 
                shall include an analysis of the impact of such 
                amendments on--
                            (i) access to care;
                            (ii) quality outcomes;
                            (iii) the number of home health agencies; 
                        and
                            (iv) rural agencies, urban agencies, for-
                        profit agencies, and nonprofit agencies.
                    (B) Report.--Not later than January 1, 2015, the 
                Medicare Payment Advisory Commission shall submit to 
                Congress a report on the study conducted under 
                subparagraph (A), together with recommendations for 
                such legislation and administrative action as the 
                Commission determines appropriate.
    (b) Program-specific Outlier Cap.--Section 1895(b) of the Social 
Security Act (42 U.S.C. 1395fff(b)) is amended--
            (1) in paragraph (3)(C), by striking ``the aggregate'' and 
        all that follows through the period at the end and inserting 
        ``5 percent of the total payments estimated to be made based on 
        the prospective payment system under this subsection for the 
        period.''; and
            (2) in paragraph (5)--
                    (A) by striking ``Outlier.--The Secretary'' and 
                inserting the following: ``Outlier.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), the Secretary'';
                    (B) in subparagraph (A), as added by subparagraph 
                (A), by striking ``5 percent'' and inserting ``2.5 
                percent''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) Program specific outlier cap.--The estimated 
                total amount of additional payments or payment 
                adjustments made under subparagraph (A) with respect to 
                a home health agency for a year (beginning with 2011) 
                may not exceed an amount equal to 10 percent of the 
                estimated total amount of payments made under this 
                section (without regard to this paragraph) with respect 
                to the home health agency for the year.''.
    (c) Application of the Medicare Rural Home Health Add-on Policy.--
Section 421 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2283), as 
amended by section 5201(b) of the Deficit Reduction Act of 2005 (Public 
Law 109-171; 120 Stat. 46), is amended--
            (1) in the section heading, by striking ``one-year'' and 
        inserting ``temporary''; and
            (2) in subsection (a)--
                    (A) by striking ``, and episodes'' and inserting 
                ``, episodes'';
                    (B) by inserting ``and episodes and visits ending 
                on or after January 1, 2010, and before January 1, 
                2016,'' after ``January 1, 2007,''; and
                    (C) by inserting ``(or, in the case of episodes and 
                visits ending on or after January 1, 2010, and before 
                January 1, 2016, 3 percent)'' before the period at the 
                end.
    (d) Study and Report on the Development of Home Health Payment 
Reforms in Order to Ensure Access to Care and Quality Services.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a study to evaluate the costs and quality of care among 
        efficient home health agencies relative to other such agencies 
        in providing ongoing access to care and in treating Medicare 
        beneficiaries with varying severity levels of illness. Such 
        study shall include an analysis of the following:
                    (A) Methods to revise the home health prospective 
                payment system under section 1895 of the Social 
                Security Act (42 U.S.C. 1395fff) to more accurately 
                account for the costs related to patient severity of 
                illness or to improving beneficiary access to care, 
                including--
                            (i) payment adjustments for services that 
                        may be under- or over-valued;
                            (ii) necessary changes to reflect the 
                        resource use relative to providing home health 
                        services to low-income Medicare beneficiaries 
                        or Medicare beneficiaries living in medically 
                        underserved areas;
                            (iii) ways the outlier payment may be 
                        improved to more accurately reflect the cost of 
                        treating Medicare beneficiaries with high 
                        severity levels of illness;
                            (iv) the role of quality of care incentives 
                        and penalties in driving provider and patient 
                        behavior;
                            (v) improvements in the application of a 
                        wage index; and
                            (vi) other areas determined appropriate by 
                        the Secretary.
                    (B) The validity and reliability of responses on 
                the OASIS instrument with particular emphasis on 
                questions that relate to higher payment under the home 
                health prospective payment system and higher outcome 
                scores under Home Care Compare.
                    (C) Additional research or payment revisions under 
                the home health prospective payment system that may be 
                necessary to set the payment rates for home health 
                services based on costs of high-quality and efficient 
                home health agencies or to improve Medicare beneficiary 
                access to care.
                    (D) A timetable for implementation of any 
                appropriate changes based on the analysis of the 
                matters described in subparagraphs (A), (B), and (C).
                    (E) Other areas determined appropriate by the 
                Secretary.
            (2) Considerations.--In conducting the study under 
        paragraph (1), the Secretary shall consider whether certain 
        factors should be used to measure patient severity of illness 
        and access to care, such as--
                    (A) population density and relative patient access 
                to care;
                    (B) variations in service costs for providing care 
                to individuals who are dually eligible under the 
                Medicare and Medicaid programs;
                    (C) the presence of severe or chronic diseases, as 
                evidenced by multiple, discontinuous home health 
                episodes;
                    (D) poverty status, as evidenced by the receipt of 
                Supplemental Security Income under title XVI of the 
                Social Security Act;
                    (E) the absence of caregivers;
                    (F) language barriers;
                    (G) atypical transportation costs;
                    (H) security costs; and
                    (I) other factors determined appropriate by the 
                Secretary.
            (3) Report.--Not later than March 1, 2011, the Secretary 
        shall submit to Congress a report on the study conducted under 
        paragraph (1), together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.
            (4) Consultations.--In conducting the study under paragraph 
        (1) and preparing the report under paragraph (3), the Secretary 
        shall consult with--
                    (A) stakeholders representing home health agencies;
                    (B) groups representing Medicare beneficiaries;
                    (C) the Medicare Payment Advisory Commission;
                    (D) the Inspector General of the Department of 
                Health and Human Services; and
                    (E) the Comptroller General of the United States.
            (5) Temporary medicare add-on payment based on the results 
        of the study.--
                    (A) In general.--Subject to subparagraph (D), 
                taking into account the results of the study conducted 
                under paragraph (1), the Secretary may, as determined 
                appropriate, provide for a temporary add-on payment for 
                home health services furnished under the Medicare 
                program during the period beginning on January 1, 2012 
                and ending on December 31, 2018. Such add-on payment 
                shall be targeted toward ensuring access to care for 
                Medicare beneficiaries with high severity of levels of 
                illness or improving access to care for low-income or 
                underserved Medicare beneficiaries. Such add-on 
                payment, with respect to a home health service, shall 
                not exceed an amount equal to three percent of the 
                payment amount that would otherwise be made under 
                section 1895 of the Social Security Act (42 U.S.C. 
                1395fff) for the service.
                    (B) Waiving budget neutrality.--The Secretary shall 
                not reduce the standard prospective payment amount (or 
                amounts) under such section 1895 applicable to home 
                health services furnished during a period to offset any 
                increase in payments during such period resulting from 
                the application of subparagraph (A).
                    (C) No effect on subsequent periods.--An payment 
                increase resulting from the application of subparagraph 
                (A) for a period--
                            (i) shall not apply to payments for home 
                        health services under title XVIII after such 
                        period; and
                            (ii) shall not be taken into account in 
                        calculating the payment amounts applicable for 
                        such services after such period.
                    (D) Funding.--The Secretary shall provide for the 
                transfer from the Federal Hospital Insurance Trust Fund 
                under section 1817 of the Social Security Act (42 
                U.S.C. 1395i) and the Federal Supplementary Medical 
                Insurance Trust Fund established under section 1841 of 
                such Act (42 U.S.C. 1395t), in such proportion as the 
                Secretary determines appropriate, of $500,000,000 for 
                the period of fiscal years 2012 through 2019 for the 
                purpose of making add-on payments under subparagraph 
                (A).
                    (E) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the implementation of 
                this paragraph.

SEC. 3132. HOSPICE REFORM.

    (a) Hospice Care Payment Reforms.--
            (1) In general.--Section 1814(i) of the Social Security Act 
        (42 U.S.C. 1395f(i)) is amended by adding at the end the 
        following new paragraph:
            ``(6)(A) The Secretary shall collect additional data and 
        information as the Secretary determines appropriate to revise 
        payments for hospice care under this subsection pursuant to 
        subparagraph (D) and for other purposes as determined 
        appropriate by the Secretary. The Secretary shall begin to 
        collect this data by not later than January 1, 2011.
            ``(B) The additional data and information to be collected 
        under subparagraph (A) may include data and information on--
                    ``(i) charges and payments;
                    ``(ii) the number of days of hospice care which are 
                attributable to individuals who are entitled to, or 
                enrolled for, benefits under part A or enrolled for 
                benefits under part B; and
                    ``(iii) with respect to each type of service 
                included in hospice care--
                            ``(I) the number of days of hospice care 
                        attributable to the type of service;
                            ``(II) the cost of the type of service; and
                            ``(III) the amount of payment for the type 
                        of service;
                    ``(iv) charitable contributions and other revenue 
                of the hospice program;
                    ``(v) the number of hospice visits;
                    ``(vi) the type of practitioner providing the 
                visit; and
                    ``(vii) the length of the visit and other basic 
                information with respect to the visit.
            ``(C) The Secretary may collect the additional data and 
        information under subparagraph (A) on cost reports, claims, or 
        other mechanisms as the Secretary determines to be appropriate.
            ``(D)(i) Notwithstanding the preceding paragraphs of this 
        subsection, not later than October 1, 2013, the Secretary 
        shall, by regulation, implement revisions to the methodology 
        for determining the payment rates for routine home care and 
        other services included in hospice care under this part, as the 
        Secretary determines to be appropriate. Such revisions may be 
        based on an analysis of data and information collected under 
        subparagraph (A). Such revisions may include adjustments to per 
        diem payments that reflect changes in resource intensity in 
        providing such care and services during the course of the 
        entire episode of hospice care.
            ``(ii) Revisions in payment implemented pursuant to 
        subparagraph (D) shall result in the same estimated amount of 
        aggregate expenditures under this title for hospice care 
        furnished in the fiscal year in which such revisions in payment 
        are implemented as would have been made under this title for 
        such care if such revisions had not been implemented.
            ``(E) The Secretary shall consult with hospice programs and 
        the Medicare Payment Advisory Commission regarding the 
        additional data and information to be collected under 
        subparagraph (A) and the payment revisions under subparagraph 
        (D).''.
            (2) Conforming amendments.--Section 1814(i)(1)(C) of the 
        Social Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended--
                    (A) in clause (ii)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``(before 2014)'' after 
                        ``subsequent fiscal year''; and
                            (ii) in subclause (VII), by inserting 
                        ``(before 2014)'' after ``subsequent fiscal 
                        year''; and
                    (B) by adding at the end the following new clause:
                            ``(iii) With respect to routine home care 
                        and other services included in hospice care 
                        furnished on or after October 1, 2013, the 
                        payment rates for such care and services shall 
                        be--
                                    ``(I) for fiscal year 2014, the 
                                payment rates determined under the 
                                methodology implemented under paragraph 
                                (6)(D); and
                                    ``(II) for a subsequent fiscal 
                                year, the payment rates in effect under 
                                this clause during the preceding fiscal 
                                year increased by the market basket 
                                percentage increase for the fiscal 
                                year.''.
    (b) Adoption of MedPAC Hospice Program Eligibility Recertification 
Recommendations.--Section 1814(a)(7) of the Social Security Act (42 
U.S.C. 1395f(a)(7)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end; 
        and
            (2) by adding at the end the following new subparagraph:
                    ``(D) on and after January 1, 2011--
                            ``(i) a hospice physician or advance 
                        practice nurse of the individual has a face-to-
                        face encounter with the individual to determine 
                        continued eligibility of the individual for 
                        hospice care prior to the 180th-day 
                        recertification and each subsequent 
                        recertification under subparagraph (A)(ii) and 
                        attests that such visit took place (in 
                        accordance with procedures established by the 
                        Secretary); and
                            ``(ii) in the case of hospice care provided 
                        an individual for more than 180 days by a 
                        hospice program for which the number of such 
                        cases for such program comprises more than a 
                        percent (specified by the Secretary) of the 
                        total number of such cases for all programs 
                        under this title, the hospice care provided to 
                        such individual is medically reviewed (in 
                        accordance with procedures established by the 
                        Secretary).''.

SEC. 3133. IMPROVEMENT TO MEDICARE DISPROPORTIONATE SHARE HOSPITAL 
              (DSH) PAYMENTS.

    Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as 
amended by sections 3001, 3008, and 3025, is amended--
            (1) in subsection (d)(5)(F)(i), by striking ``For'' and 
        inserting ``Subject to subsection (r), for''; and
            (2) by adding at the end the following new subsection:
    ``(r) Adjustments to Medicare DSH Payments.--
            ``(1) Empirically justified dsh payments.--For fiscal year 
        2015 and each subsequent fiscal year, instead of the amount of 
        disproportionate share hospital payment that would otherwise be 
        made under subsection (d)(5)(F) to a subsection (d) hospital 
        for the fiscal year, the Secretary shall pay to the subsection 
        (d) hospital 25 percent of such amount (which is an amount that 
        represents the empirically justified amount for such payment, 
        as determined by the Medicare Payment Advisory Commission in 
        its March 2007 Report to the Congress).
            ``(2) Additional payment.--In addition to the payment made 
        to a subsection (d) hospital under paragraph (1), for fiscal 
        year 2015 and each subsequent fiscal year, the Secretary shall 
        pay to such subsection (d) hospitals an additional amount equal 
        to the product of the following factors:
                    ``(A) Factor one.--A factor equal to the difference 
                between--
                            ``(i) the aggregate amount of payments that 
                        would be made to the subsection (d) hospital 
                        under subsection (d)(5)(F) if this subsection 
                        did not apply for such fiscal year (as 
                        estimated by the Secretary); and
                            ``(ii) the aggregate amount of payments 
                        that are made to the subsection (d) hospital 
                        under paragraph (1) for such fiscal year (as so 
                        estimated).
                    ``(B) Factor two.--
                            ``(i) Fiscal years 2015, 2016, and 2017.--
                        For each of fiscal years 2015, 2016, and 2017, 
                        a factor equal to 1 minus the percent change 
                        (divided by 100) in the percent of individuals 
                        under the age of 65 who are uninsured, as 
                        determined by comparing the percent of such 
                        individuals--
                                    ``(I) who are uninsured in 2012, 
                                the last year before coverage expansion 
                                under the America's Healthy Future Act 
                                of 2009 (as calculated by the Secretary 
                                based on the most recent estimates 
                                available from the Director of the 
                                Congressional Budget Office prior to 
                                the date of enactment of such Act); and
                                    ``(II) who are uninsured in the 
                                most recent period for which data is 
                                available (as so calculated).
                            ``(ii) 2018 and subsequent years.--For 
                        fiscal year 2018 and each subsequent fiscal 
                        year, a factor equal to 1 minus the percent 
                        change (divided by 100) in the percent of 
                        individuals who are uninsured, as determined by 
                        comparing the percent of individuals--
                                    ``(I) who are uninsured in 2012 (as 
                                estimated by the Secretary, based on 
                                data from the Census Bureau or other 
                                sources the Secretary determines 
                                appropriate, and certified by the Chief 
                                Actuary of the Centers for Medicare & 
                                Medicaid Services); and
                                    ``(II) who are uninsured in the 
                                most recent period for which data is 
                                available (as so estimated and 
                                certified).
                    ``(C) Factor three.--A factor equal to the percent, 
                for each subsection (d) hospital, that represents the 
                quotient of--
                            ``(i) the amount of uncompensated care for 
                        such hospital for a period selected by the 
                        Secretary (as estimated by Secretary, based on 
                        appropriate data (including, in the case where 
                        the Secretary determines that alternative data 
                        is available which is a better proxy for the 
                        costs of subsection (d) hospitals for treating 
                        the uninsured, the use of such alternative 
                        data)); and
                            ``(ii) the aggregate amount of 
                        uncompensated care for all subsection (d) 
                        hospitals that receive a payment under this 
                        subsection for such period (as so estimated, 
                        based on such data).
            ``(3) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) Any estimate of the Secretary for purposes of 
                determining the factors described in paragraph (2).
                    ``(B) Any period selected by the Secretary for such 
                purposes.
                    ``(C) Any determination by the Secretary to use an 
                alternative percent under paragraph (1)(B).''.

SEC. 3134. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.

    (a) In General.--Section 1848(c)(2) of the Social Security Act (42 
U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new 
subparagraphs:
                    ``(K) Potentially misvalued codes.--
                            ``(i) In general.--The Secretary shall--
                                    ``(I) periodically identify 
                                services as being potentially misvalued 
                                using criteria specified in clause 
                                (ii); and
                                    ``(II) review and make appropriate 
                                adjustments to the relative values 
                                established under this paragraph for 
                                services identified as being 
                                potentially misvalued under subclause 
                                (I).
                            ``(ii) Identification of potentially 
                        misvalued codes.--For purposes of identifying 
                        potentially misvalued services pursuant to 
                        clause (i)(I), the Secretary shall examine (as 
                        the Secretary determines to be appropriate) 
                        codes (and families of codes as appropriate) 
                        for which there has been the fastest growth; 
                        codes (and families of codes as appropriate) 
                        that have experienced substantial changes in 
                        practice expenses; codes for new technologies 
                        or services within an appropriate period (such 
                        as 3 years) after the relative values are 
                        initially established for such codes; multiple 
                        codes that are frequently billed in conjunction 
                        with furnishing a single service; codes with 
                        low relative values, particularly those that 
                        are often billed multiple times for a single 
                        treatment; codes which have not been subject to 
                        review since the implementation of the RBRVS 
                        (the so-called `Harvard-valued codes'); and 
                        such other codes determined to be appropriate 
                        by the Secretary.
                            ``(iii) Review and adjustments.--
                                    ``(I) The Secretary may use 
                                existing processes to receive 
                                recommendations on the review and 
                                appropriate adjustment of potentially 
                                misvalued services described in clause 
                                (i)(II).
                                    ``(II) The Secretary may conduct 
                                surveys, other data collection 
                                activities, studies, or other analyses 
                                as the Secretary determines to be 
                                appropriate to facilitate the review 
                                and appropriate adjustment described in 
                                clause (i)(II).
                                    ``(III) The Secretary may use 
                                analytic contractors to identify and 
                                analyze services identified under 
                                clause (i)(I), conduct surveys or 
                                collect data, and make recommendations 
                                on the review and appropriate 
                                adjustment of services described in 
                                clause (i)(II).
                                    ``(IV) The Secretary may coordinate 
                                the review and appropriate adjustment 
                                described in clause (i)(II) with the 
                                periodic review described in 
                                subparagraph (B).
                                    ``(V) As part of the review and 
                                adjustment described in clause (i)(II), 
                                including with respect to codes with 
                                low relative values described in clause 
                                (ii), the Secretary may make 
                                appropriate coding revisions (including 
                                using existing processes for 
                                consideration of coding changes) which 
                                may include consolidation of individual 
                                services into bundled codes for payment 
                                under the fee schedule under subsection 
                                (b).
                                    ``(VI) The provisions of 
                                subparagraph (B)(ii)(II) shall apply to 
                                adjustments to relative value units 
                                made pursuant to this subparagraph in 
                                the same manner as such provisions 
                                apply to adjustments under subparagraph 
                                (B)(ii)(II).
                    ``(L) Validating relative value units.--
                            ``(i) In general.--The Secretary shall 
                        establish a process to validate relative value 
                        units under the fee schedule under subsection 
                        (b).
                            ``(ii) Components and elements of work.--
                        The process described in clause (i) may include 
                        validation of work elements (such as time, 
                        mental effort and professional judgment, 
                        technical skill and physical effort, and stress 
                        due to risk) involved with furnishing a service 
                        and may include validation of the pre-, post-, 
                        and intra-service components of work.
                            ``(iii) Scope of codes.--The validation of 
                        work relative value units shall include a 
                        sampling of codes for services that is the same 
                        as the codes listed under subparagraph (K)(ii).
                            ``(iv) Methods.--The Secretary may conduct 
                        the validation under this subparagraph using 
                        methods described in subclauses (I) through (V) 
                        of subparagraph (K)(iii) as the Secretary 
                        determines to be appropriate.
                            ``(v) Adjustments.--The Secretary shall 
                        make appropriate adjustments to the work 
                        relative value units under the fee schedule 
                        under subsection (b). The provisions of 
                        subparagraph (B)(ii)(II) shall apply to 
                        adjustments to relative value units made 
                        pursuant to this subparagraph in the same 
                        manner as such provisions apply to adjustments 
                        under subparagraph (B)(ii)(II).''.
    (b) Implementation.--
            (1) Administration.--
                    (A) Chapter 35 of title 44, United States Code and 
                the provisions of the Federal Advisory Committee Act (5 
                U.S.C. App.) shall not apply to this section or the 
                amendment made by this section.
                    (B) Notwithstanding any other provision of law, the 
                Secretary may implement subparagraphs (K) and (L) of 
                1848(c)(2) of the Social Security Act, as added by 
                subsection (a), by program instruction or otherwise.
                    (C) Section 4505(d) of the Balanced Budget Act of 
                1997 is repealed.
                    (D) Except for provisions related to 
                confidentiality of information, the provisions of the 
                Federal Acquisition Regulation shall not apply to this 
                section or the amendment made by this section.
            (2) Focusing cms resources on potentially overvalued 
        codes.--Section 1868(a) of the Social Security Act (42 U.S.C. 
        1395ee(a)) is repealed.

SEC. 3135. MODIFICATION OF EQUIPMENT UTILIZATION FACTOR FOR ADVANCED 
              IMAGING SERVICES.

    (a) Adjustment in Practice Expense to Reflect Higher Presumed 
Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w) 
is amended--
            (1) in subsection (b)(4)--
                    (A) in subparagraph (B), by striking ``subparagraph 
                (A)'' and inserting ``this paragraph''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Adjustment in practice expense to reflect 
                higher presumed utilization.--In computing the number 
                of practice expense relative value units under 
                subsection (c)(2)(C)(ii) with respect to advanced 
                diagnostic imaging services (as defined in section 
                1834(e)(1)(B)), the Secretary shall adjust such number 
                of units so it reflects--
                            ``(i) in the case of services furnished on 
                        or after January 1, 2010, and before January 1, 
                        2013, a 65 (rather than 50 percent) presumed 
                        rate of utilization of imaging equipment; and
                            ``(ii) in the case of services furnished on 
                        or after January 1, 2013, a 75 percent (rather 
                        than 50 percent) presumed rate of utilization 
                        of imaging equipment.''; and
            (2) in subsection (c)(2)(B)(v)(II), by inserting ``and 
        other provisions'' after ``OPD payment cap''.
    (b) Adjustment in Technical Component ``discount'' on Single-
session Imaging to Consecutive Body Parts.--Section 1848(b)(4) of such 
Act is further amended by adding at the end the following new 
subparagraph:
                    ``(D) Adjustment in technical component discount on 
                single-session imaging involving consecutive body 
                parts.--In the case of services furnished on or after 
                January 1, 2010, the Secretary shall increase the 
                reduction in payments attributable to the multiple 
                procedure payment reduction applicable to the technical 
                component for imaging under the final rule published by 
                the Secretary in the Federal Register on November 21, 
                2005 (part 405 of title 42, Code of Federal 
                Regulations) from 25 percent to 50 percent.''.
    (c) GAO Study and Report.--
            (1) Study.--The Comptroller General of the United States 
        (in this subsection referred to as the ``Comptroller General'') 
        shall conduct a study on the estimated impact of the adjustment 
        in practice expense to reflect higher presumed utilization 
        under the amendments made by subsection (a) on the following:
                    (A) Medicare beneficiary access to advanced 
                diagnostic imaging services (as defined in section 
                1834(e)(1)(B) of the Social Security Act (42 U.S.C. 
                1395m(e)(1)(B)), including such access in rural areas.
                    (B) Utilization of advanced diagnostic imaging 
                services (as so defined).
                    (C) The estimated savings to the Medicare program 
                under title XVIII of the Social Security Act (42 U.S.C. 
                1395 et seq.) during the period of 2010 through 2019 as 
                a result of such adjustment.
            (2) Report.--Not later than January 1, 2013, the 
        Comptroller General shall submit to Congress a report 
        containing the results of the study conducted under paragraph 
        (1), together with recommendations for such legislation and 
        administrative action as the Comptroller General determines 
        appropriate.

SEC. 3136. REVISION OF PAYMENT FOR POWER-DRIVEN WHEELCHAIRS.

    (a) In General.--Section 1834(a)(7)(A) of the Social Security Act 
(42 U.S.C. 1395m(a)(7)(A)) is amended--
            (1) in clause (i)--
                    (A) in subclause (II), by inserting ``subclause 
                (III) and'' after ``Subject to''; and
                    (B) by adding at the end the following new 
                subclause:
                                    ``(III) Special rule for power-
                                driven wheelchairs.--For purposes of 
                                payment for power-driven wheelchairs, 
                                subclause (II) shall be applied by 
                                substituting `15 percent' and `6 
                                percent' for `10 percent' and `7.5 
                                percent', respectively.''; and
            (2) in clause (iii)--
                    (A) in the heading, by inserting ``complex, 
                rehabilitative'' before ``power-driven''; and
                    (B) by inserting ``complex, rehabilitative'' before 
                ``power-driven''.
    (b) Technical Amendment.--Section 1834(a)(7)(C)(ii)(II) of the 
Social Security Act (42 U.S.C. 1395m(a)(7)(C)(ii)(II)) is amended by 
striking ``(A)(ii) or''.
    (c) Effective Date.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by subsection (a) shall take effect on January 1, 2011, 
        and shall apply to power-driven wheelchairs furnished on or 
        after such date.
            (2) Application to competitive bidding.--The amendments 
        made by subsection (a) shall not apply to payment made for 
        items and services furnished pursuant to contracts entered into 
        under section 1847 of the Social Security Act (42 U.S.C. 1395w-
        3) prior to January 1, 2011, pursuant to the implementation of 
        subsection (a)(1)(B)(i)(I) of such section 1847.

SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT.

    (a) Extension of Section 508 Hospital Reclassifications.--
            (1) In general.--Subsection (a) of section 106 of division 
        B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 
        note), as amended by section 117 of the Medicare, Medicaid, and 
        SCHIP Extension Act of 2007 (Public Law 110-173) and section 
        124 of the Medicare Improvements for Patients and Providers Act 
        of 2008 (Public Law 110-275), is amended by striking 
        ``September 30, 2009'' and inserting ``September 30, 2011''.
            (2) Use of particular wage index.--For purposes of 
        implementation of the amendment made by this subsection, the 
        Secretary shall use the hospital wage index that was 
        promulgated by the Secretary in the Federal Register on August 
        27, 2009 (74 Fed. Reg. 43754), and any subsequent corrections.
    (b) Plan for Reforming the Medicare Hospital Wage Index System.--
            (1) In general.--Not later than December 31, 2011, the 
        Secretary of Health and Human Services (in this section 
        referred to as the ``Secretary'') shall submit to Congress a 
        report that includes a plan to reform the hospital wage index 
        system under section 1886 of the Social Security Act.
            (2) Details.--In developing the plan under paragraph (1), 
        the Secretary shall take into account the goals for reforming 
        such system set forth in the Medicare Payment Advisory 
        Commission June 2007 report entitled ``Report to Congress: 
        Promoting Greater Efficiency in Medicare'', including 
        establishing a new hospital compensation index system that--
                    (A) uses Bureau of Labor Statistics data, or other 
                data or methodologies, to calculate relative wages for 
                each geographic area involved;
                    (B) minimizes wage index adjustments between and 
                within metropolitan statistical areas and statewide 
                rural areas;
                    (C) includes methods to minimize the volatility of 
                wage index adjustments that result from implementation 
                of policy, while maintaining budget neutrality in 
                applying such adjustments;
                    (D) takes into account the effect that 
                implementation of the system would have on health care 
                providers and on each region of the country;
                    (E) addresses issues related to occupational mix, 
                such as staffing practices and ratios, and any evidence 
                on the effect on quality of care or patient safety as a 
                result of the implementation of the system; and
                    (F) provides for a transition.
            (3) Consultation.--In developing the plan under paragraph 
        (1), the Secretary shall consult with relevant affected 
        parties.
    (c) Use of Particular Ratios for Determining Reclassifications.--
Section 1886(d)(10)(C) of the Social Security Act (42 U.S.C. 
1395ww(d)(10)(C)) is amended by adding at the end the following clause:
    ``(vii) Notwithstanding any other provision of law, in making 
decisions on applications for reclassification of a subsection (d) 
hospital for the purposes described in clause (v) for fiscal year 2011 
and each subsequent fiscal year (before the first fiscal year beginning 
on or after the date that is 1 year after the Secretary submits the 
report to Congress under section 3137(b) of the America's Healthy 
Future Act of 2009), the Board shall use the ratios used in making such 
decisions as of September 30, 2008. This clause shall be effected in a 
budget neutral manner.''.

SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS.

    Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is 
amended by adding at the end the following new paragraph:
            ``(18) Authorization of adjustment for cancer hospitals.--
                    ``(A) Study.--The Secretary shall conduct a study 
                to determine if, under the system under this 
                subsection, costs incurred by hospitals described in 
                section 1886(d)(1)(B)(v) with respect to ambulatory 
                payment classification groups exceed those costs 
                incurred by other hospitals furnishing services under 
                this subsection (as determined appropriate by the 
                Secretary).
                    ``(B) Authorization of adjustment.--Insofar as the 
                Secretary determines under subparagraph (A) that costs 
                incurred by hospitals described in section 
                1886(d)(1)(B)(v) exceed those costs incurred by other 
                hospitals furnishing services under this subsection, 
                the Secretary shall provide for an appropriate 
                adjustment under paragraph (2)(E) to reflect those 
                higher costs effective for services furnished on or 
                after January 1, 2011.''.

SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) In General.--Section 1847A of the Social Security Act (42 
U.S.C. 1395w-3a) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by striking ``or'' 
                        at the end;
                            (ii) in subparagraph (B), by striking the 
                        period at the end and inserting ``; or''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(C) in the case of a biosimilar biological 
                product (as defined in subsection (c)(6)(H)), the 
                amount determined under paragraph (8).''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(8) Biosimilar biological product.--The amount specified 
        in this paragraph for a biosimilar biological product described 
        in paragraph (1)(C) is the sum of--
                    ``(A) the average sales price as determined using 
                the methodology described under paragraph (6) applied 
                to a biosimilar biological product for all National 
                Drug Codes assigned to such product in the same manner 
                as such paragraph is applied to drugs described in such 
                paragraph; and
                    ``(B) 6 percent of the amount determined under 
                paragraph (4) for the reference biological product (as 
                defined in subsection (c)(6)(I)).''; and
            (2) in subsection (c)(6), by adding at the end the 
        following new subparagraph:
                    ``(H) Biosimilar biological product.--The term 
                `biosimilar biological product' means a biological 
                product approved under an abbreviated application for a 
                license of a biological product that relies in part on 
                data or information in an application for another 
                biological product licensed under section 351 of the 
                Public Health Service Act.
                    ``(I) Reference biological product.--The term 
                `reference biological product' means the biological 
                product licensed under such section 351 that is 
                referred to in the application described in 
                subparagraph (H) of the biosimilar biological 
                product.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to payments for biosimilar biological products beginning with the 
first day of the second calendar quarter after enactment of legislation 
providing for a biosimilar pathway (as determined by the Secretary).

SEC. 3140. PUBLIC MEETING AND REPORT ON PAYMENT SYSTEMS FOR NEW 
              CLINICAL LABORATORY DIAGNOSTIC TESTS.

    (a) Public Meeting.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall convene a public 
meeting on mechanisms of payment for new clinical laboratory diagnostic 
tests under title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.). Such public meeting shall include a discussion of how to reform 
such mechanisms of payment for such tests under such title.
    (b) Report.--The Secretary shall submit to Congress a report 
containing a summary of the public meeting convened under subsection 
(a), together with recommendations for such legislation and 
administrative action the Secretary determines appropriate.

SEC. 3141. MEDICARE HOSPICE CONCURRENT CARE DEMONSTRATION PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish a Medicare Hospice Concurrent Care demonstration 
        program at participating hospice programs under which Medicare 
        beneficiaries are furnished, during the same period, hospice 
        care and any other items or services covered under title XVIII 
        of the Social Security Act (42 U.S.C. 1395 et seq.) from funds 
        otherwise paid under such title to such hospice programs.
            (2) Duration.--The demonstration program under this section 
        shall be conducted for a 3-year period.
            (3) Sites.--The Secretary shall establish a total of 26 
        sites in the United States at which the demonstration program 
        under this section shall be conducted. Such sites shall be 
        located in urban and rural areas.
    (b) Independent Evaluation and Reports.--
            (1) Independent evaluation.--The Secretary shall provide 
        for the conduct of an independent evaluation of the 
        demonstration program under this section. Such independent 
        evaluation shall determine whether the demonstration program 
        has improved patient care, quality of life, and cost-
        effectiveness for Medicare beneficiaries participating in the 
        demonstration program.
            (2) Reports.--The Secretary shall submit to Congress a 
        report containing the results of the evaluation conducted under 
        paragraph (1), together with such recommendations as the 
        Secretary determines appropriate.
    (c) Budget Neutrality.--With respect to the 3-year period of the 
demonstration program under this section, the Secretary shall ensure 
that the aggregate expenditures under title XVIII for such period shall 
not exceed the aggregate expenditures that would have been expended 
under such title if the demonstration program under this section had 
not been implemented.

SEC. 3142. APPLICATION OF BUDGET NEUTRALITY ON A NATIONAL BASIS IN THE 
              CALCULATION OF THE MEDICARE HOSPITAL WAGE INDEX FLOOR FOR 
              EACH ALL-URBAN AND RURAL STATE.

    In the case of discharges occurring on or after October 1, 2010, 
for purposes of applying section 4410 of the Balanced Budget Act of 
1997 (42 U.S.C. 1395ww note) and paragraph (h)(4) of section 412.64 of 
title 42, Code of Federal Regulations, the Secretary of Health and 
Human Services shall administer subsection (b) of such section 4410 and 
paragraph (e) of such section 412.64 in the same manner as the 
Secretary administered such subsection (b) and paragraph (e) for 
discharges occurring during fiscal year 2008 (through a uniform, 
national adjustment to the area wage index).

SEC. 3143. HHS STUDY ON URBAN MEDICARE-DEPENDENT HOSPITALS.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a study on the need for an additional payment for urban 
        Medicare-dependent hospitals for inpatient hospital services 
        under section 1886 of the Social Security Act (42 U.S.C. 
        1395ww). Such study shall include an analysis of--
                    (A) the Medicare inpatient margins of urban 
                Medicare-dependent hospitals, as compared to other 
                hospitals which receive 1 or more additional payments 
                or adjustments under such section (including those 
                payments or adjustments described in paragraph (2)(A)); 
                and
                    (B) whether payments to medicare-dependent, small 
                rural hospitals under subsection (d)(5)(G) of such 
                section should be applied to urban Medicare-dependent 
                hospitals.
            (2) Urban medicare-dependent hospital defined.--For 
        purposes of this section, the term ``urban Medicare-dependent 
        hospital'' means a subsection (d) hospital (as defined in 
        subsection (d)(1)(B) of such section) that--
                    (A) does not receive any additional payment or 
                adjustment under such section, such as payments for 
                indirect medical education costs under subsection 
                (d)(5)(B) of such section, disproportionate share 
                payments under subsection (d)(5)(A) of such section, 
                payments to a rural referral center under subsection 
                (d)(5)(C) of such section, payments to a critical 
                access hospital under section 1814(l) of such Act (42 
                U.S.C. 1395f(l)), payments to a sole community hospital 
                under subsection (d)(5)(D) of such section 1886, or 
                payments to a medicare-dependent, small rural hospital 
                under subsection (d)(5)(G) of such section 1886; and
                    (B) for which more than 60 percent of its inpatient 
                days or discharges during 2 of the 3 most recently 
                audited cost reporting periods for which the Secretary 
                has a settled cost report were attributable to 
                inpatients entitled to benefits under part A of title 
                XVIII of such Act.
    (b) Report.--Not later than 9 months after the date of enactment of 
this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

               Subtitle C--Provisions Relating to Part C

SEC. 3201. MEDICARE ADVANTAGE PAYMENT.

    (a) MA Benchmark Based on Plan's Competitive Bids.--
            (1) In general.--Section 1853(j) of the Social Security Act 
        (42 U.S.C. 1395w-23(j)) is amended--
                    (A) by striking ``Amounts.--For purposes'' and 
                inserting ``amounts.--
            ``(1) In general.--For purposes'';
                    (B) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively, and indenting 
                the subparagraphs appropriately;
                    (C) in subparagraph (A), as redesignated by 
                subparagraph (B)--
                            (i) by redesignating subparagraphs (A) and 
                        (B) as clauses (i) and (ii), respectively, and 
                        indenting the clauses appropriately; and
                            (ii) in clause (i), as redesignated by 
                        clause (i), by striking ``an amount equal to'' 
                        and all that follows through the end and 
                        inserting ``an amount equal to--
                                    ``(I) for years before 2007, \1/12\ 
                                of the annual MA capitation rate under 
                                section 1853(c)(1) for the area for the 
                                year, adjusted as appropriate for the 
                                purpose of risk adjustment;
                                    ``(II) for 2007 through 2011, \1/
                                12\ of the applicable amount determined 
                                under subsection (k)(1) for the area 
                                for the year;
                                    ``(III) for 2012, the sum of--
                                            ``(aa) \2/3\ of the 
                                        quotient of--

                                                    ``(AA) the 
                                                applicable amount 
                                                determined under 
                                                subsection (k)(1) for 
                                                the area for the year; 
                                                and

                                                    ``(BB) 12; and

                                            ``(bb) \1/3\ of the MA 
                                        competitive benchmark amount 
                                        (determined under paragraph 
                                        (2)) for the area for the 
                                        month;
                                    ``(IV) for 2013, the sum of--
                                            ``(aa) \1/3\ of the 
                                        quotient of--

                                                    ``(AA) the 
                                                applicable amount 
                                                determined under 
                                                subsection (k)(1) for 
                                                the area for the year; 
                                                and

                                                    ``(BB) 12; and

                                            ``(bb) \2/3\ of the MA 
                                        competitive benchmark amount 
                                        (as so determined) for the area 
                                        for the month;
                                    ``(V) for 2014, the MA competitive 
                                benchmark amount for the area for a 
                                month in 2013 (as so determined), 
                                increased by the national per capita MA 
                                growth percentage, described in 
                                subsection (c)(6) for 2014, but not 
                                taking into account any adjustment 
                                under subparagraph (C) of such 
                                subsection for a year before 2004; and
                                    ``(VI) for 2015 and each subsequent 
                                year, the MA competitive benchmark 
                                amount (as so determined) for the area 
                                for the month; or'';
                            (iii) in clause (ii), as redesignated by 
                        clause (i), by striking ``subparagraph (A)'' 
                        and inserting ``clause (i)'';
                    (D) by adding at the end the following new 
                paragraphs:
            ``(2) Computation of ma competitive benchmark amount.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                paragraph (3), for months in each year (beginning with 
                2012) for each MA payment area the Secretary shall 
                compute an MA competitive benchmark amount equal to the 
                weighted average of the unadjusted MA statutory non-
                drug monthly bid amount (as defined in section 
                1854(b)(2)(E)) for each MA plan in the area, with the 
                weight for each plan being equal to the average number 
                of beneficiaries enrolled under such plan in the 
                reference month (as defined in section 1858(f)(4), 
                except that, in applying such definition for purposes 
                of this paragraph, `to compute the MA competitive 
                benchmark amount under section 1853(j)(2)' shall be 
                substituted for `to compute the percentage specified in 
                subparagraph (A) and other relevant percentages under 
                this part').
                    ``(B) Weighting rules.--
                            ``(i) Single plan rule.--In the case of an 
                        MA payment area in which only a single MA plan 
                        is being offered, the weight under subparagraph 
                        (A) shall be equal to 1.
                            ``(ii) Use of simple average among multiple 
                        plans if no plans offered in previous year.--In 
                        the case of an MA payment area in which no MA 
                        plan was offered in the previous year and more 
                        than 1 MA plan is offered in the current year, 
                        the Secretary shall use a simple average of the 
                        unadjusted MA statutory non-drug monthly bid 
                        amount (as so defined) for purposes of 
                        computing the MA competitive benchmark amount 
                        under subparagraph (A).
            ``(3) Cap on ma competitive benchmark amount.--In no case 
        shall the MA competitive benchmark amount for an area for a 
        month in a year be greater than the applicable amount that 
        would (but for the application of this subsection) be 
        determined under subsection (k)(1) for the area for the month 
        in the year.''; and
                    (E) in subsection (k)(2)(B)(ii)(III), by striking 
                ``(j)(1)(A)'' and inserting ``(j)(1)(A)(i)''.
            (2) Conforming amendments.--
                    (A) Section 1853(k)(2) of the Social Security Act 
                (42 U.S.C. 1395w-23(k)(2)) is amended--
                            (i) in subparagraph (A), by striking 
                        ``through 2010'' and inserting ``and subsequent 
                        years''; and
                            (ii) in subparagraph (C)--
                                    (I) in clause (iii), by striking 
                                ``and'' at the end;
                                    (II) in clause (iv), by striking 
                                the period at the end and inserting ``; 
                                and''; and
                                    (III) by adding at the end the 
                                following new clause:
                            ``(v) for 2011 and subsequent years, 
                        0.00.''.
                    (B) Section 1854(b) of the Social Security Act (42 
                U.S.C. 1395w-24(b)) is amended--
                            (i) in paragraph (3)(B)(i), by striking 
                        ``1853(j)(1)'' and inserting ``1853(j)(1)(A)''; 
                        and
                            (ii) in paragraph (4)(B)(i), by striking 
                        ``1853(j)(2)'' and inserting ``1853(j)(1)(B)''.
                    (C) Section 1858(f) of the Social Security Act (42 
                U.S.C. 1395w-27(f)) is amended--
                            (i) in paragraph (1), by striking 
                        ``1853(j)(2)'' and inserting ``1853(j)(1)(B)''; 
                        and
                            (ii) in paragraph (3)(A), by striking 
                        ``1853(j)(1)(A)'' and inserting 
                        ``1853(j)(1)(A)(i)''.
                    (D) Section 1860C-1(d)(1)(A) of the Social Security 
                Act (42 U.S.C. 1395w-29(d)(1)(A)) is amended by 
                striking ``1853(j)(1)(A)'' and inserting 
                ``1853(j)(1)(A)(i)''.
    (b) Reduction of National Per Capita Growth Percentage for 2011.--
Section 1853(c)(6) of the Social Security Act (42 U.S.C. 1395w-
23(c)(6)) is amended--
            (1) in clause (v), by striking ``and'' at the end;
            (2) in clause (vi)--
                    (A) by striking ``for a year after 2002'' and 
                inserting ``for 2003 through 2010''; and
                    (B) by striking the period at the end and inserting 
                a comma; and
                    (C) by adding at the end the following new clauses:
                            ``(vii) for 2011, 3 percentage points; and
                            ``(viii) for a year after 2011, 0 
                        percentage points.''.
    (c) Enhancement of Beneficiary Rebates.--Section 1854(b)(1)(C)(i) 
of the Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)(i)) is amended 
by inserting ``(or 100 percent in the case of plan years beginning on 
or after January 1, 2014)'' after ``75 percent''.
    (d) Bidding Rules.--
            (1) Requirements for information submitted.--Section 
        1854(a)(6)(A) of the Social Security Act (42 U.S.C. 1395w-
        24(a)(6)(A)) is amended, in the flush matter following clause 
        (v), by adding at the end the following sentence: ``Information 
        to be submitted under this paragraph shall be certified by a 
        qualified member of the American Academy of Actuaries and shall 
        meet actuarial guidelines and rules established by the 
        Secretary under subparagraph (B)(v).''.
            (2) Establishment of actuarial guidelines.--Section 
        1854(a)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
        24(a)(6)(B)) is amended--
                    (A) in clause (i), by striking ``(iii) and (iv)'' 
                and inserting ``(iii), (iv), and (v)''; and
                    (B) by adding at the end the following new clause:
                            ``(v) Establishment of actuarial 
                        guidelines.--
                                    ``(I) In general.--In order to 
                                establish fair MA competitive 
                                benchmarks under section 
                                1853(j)(1)(A)(i), the Secretary, acting 
                                through the Chief Actuary of the 
                                Centers for Medicare & Medicaid 
                                Services (in this clause referred to as 
                                the `Chief Actuary'), shall establish--
                                            ``(aa) actuarial guidelines 
                                        for the submission of bid 
                                        information under this 
                                        paragraph; and
                                            ``(bb) bidding rules that 
                                        are appropriate to ensure 
                                        accurate bids and fair 
                                        competition among MA plans.
                                    ``(II) Denial of bid amounts.--The 
                                Secretary shall deny monthly bid 
                                amounts submitted under subparagraph 
                                (A) that do not meet the actuarial 
                                guidelines and rules established under 
                                subclause (I).
                                    ``(III) Refusal to accept certain 
                                bids due to misrepresentations and 
                                failures to adequately meet 
                                requirements.--In the case where the 
                                Secretary determines that information 
                                submitted by an MA organization under 
                                subparagraph (A) contains consistent 
                                misrepresentations and failures to 
                                adequately meet requirements of the 
                                organization, the Secretary may refuse 
                                to accept any additional such bid 
                                amounts from the organization for the 
                                plan year and the Chief Actuary shall, 
                                if the Chief Actuary determines that 
                                the actuaries of the organization were 
                                complicit in those misrepresentations 
                                and failures, report those actuaries to 
                                the Actuarial Board for Counseling and 
                                Discipline.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to bid amounts submitted on or after January 1, 
        2012.
    (e) MA Local Plan Service Areas.--
            (1) In general.--Section 1853(d) of the Social Security Act 
        (42 U.S.C. 1395w-23(d)) is amended--
                    (A) in the subsection heading, by striking ``MA 
                Region'' and inserting ``MA Region; MA Local Plan 
                Service Area'';
                    (B) in paragraph (1), by striking subparagraph (A) 
                and inserting the following:
                    ``(A) with respect to an MA local plan--
                            ``(i) for years before 2012, an MA local 
                        area (as defined in paragraph (2)); and
                            ``(ii) for 2012 and succeeding years, a 
                        service area that is an entire urban or rural 
                        area, as applicable (as described in paragraph 
                        (5)); and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(5) MA local plan service area.--For 2012 and succeeding 
        years, the service area for an MA local plan shall be an entire 
        urban or rural area in each State as follows:
                    ``(A) Urban areas.--
                            ``(i) In general.--Subject to clause (ii) 
                        and subparagraphs (C) and (D), the service area 
                        for an MA local plan in an urban area shall be 
                        the Core Based Statistical Area (in this 
                        paragraph referred to as a `CBSA') or, if 
                        applicable, a conceptually similar alternative 
                        classification, as defined by the Director of 
                        the Office of Management and Budget.
                            ``(ii) CBSA covering more than one state.--
                        In the case of a CBSA (or alternative 
                        classification) that covers more than one 
                        State, the Secretary shall divide the CBSA (or 
                        alternative classification) into separate 
                        service areas with respect to each State 
                        covered by the CBSA (or alternative 
                        classification).
                    ``(B) Rural areas.--Subject to subparagraphs (C) 
                and (D), the service area for an MA local plan in a 
                rural area shall be a county that does not qualify for 
                inclusion in a CBSA (or alternative classification), as 
                defined by the Director of the Office of Management and 
                Budget.
                    ``(C) Refinements to service areas.--For 2015 and 
                succeeding years, in order to reflect actual patterns 
                of health care service utilization, the Secretary may 
                adjust the boundaries of service areas for MA local 
                plans in urban areas and rural areas under 
                subparagraphs (A) and (B), respectively, but may only 
                do so based on recent analyses of actual patterns of 
                care.
                    ``(D) Additional authority to make limited 
                exceptions to service area requirements for ma local 
                plans.--The Secretary may, in addition to any 
                adjustments under subparagraph (C), make limited 
                exceptions to service area requirements otherwise 
                applicable under this part for MA local plans that have 
                in effect (as of the date of enactment of the America's 
                Healthy Future Act of 2009)--
                            ``(i) agreements with another MA 
                        organization or MA plan that preclude the 
                        offering of benefits throughout an entire 
                        service area; or
                            ``(ii) limitations in their structural 
                        capacity to support adequate networks 
                        throughout an entire service area as a result 
                        of the delivery system model of the MA local 
                        plan.''.
            (2) Conforming amendments.--
                    (A) In general.--
                            (i) Section 1851(b)(1) of the Social 
                        Security Act (42 U.S.C. 1395w-21(b)(1)) is 
                        amended by striking subparagraph (C).
                            (ii) Section 1853(b)(1)(B)(i) of such Act 
                        (42 U.S.C. 1395w-23(b)(1)(B)(i))--
                                    (I) in the matter preceding 
                                subclause (I), by striking ``MA payment 
                                area'' and inserting ``MA local area 
                                (as defined in subsection (d)(2))''; 
                                and
                                    (II) in subclause (I), by striking 
                                ``MA payment area'' and inserting ``MA 
                                local area (as so defined)''.
                            (iii) Section 1853(b)(4) of such Act (42 
                        U.S.C. 1395w-23(b)(4)) is amended by striking 
                        ``Medicare Advantage payment area'' and 
                        inserting ``MA local area (as so defined)''.
                            (iv) Section 1853(c)(1) of such Act (42 
                        U.S.C. 1395w-23(c)(1)) is amended--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``a 
                                Medicare Advantage payment area that 
                                is''; and
                                    (II) in subparagraph (D)(i), by 
                                striking ``MA payment area'' and 
                                inserting ``MA local area (as defined 
                                in subsection (d)(2))''.
                            (v) Section 1854 of such Act (42 U.S.C. 
                        1395w-24) is amended by striking subsection 
                        (h).
                    (B) Effective date.--The amendments made by this 
                paragraph shall take effect on January 1, 2012.
    (f) Performance Bonuses.--
            (1) MA plans.--
                    (A) In general.--Section 1853 of the Social 
                Security Act (42 U.S.C. 1395w-23) is amended by adding 
                at the end the following new subsection:
    ``(n) Performance Bonuses.--
            ``(1) Care coordination and management performance bonus.--
                    ``(A) In general.--For years beginning with 2014, 
                subject to subparagraph (B), in the case of an MA plan 
                that conducts 1 or more programs described in 
                subparagraph (C) with respect to the year, the 
                Secretary shall, in addition to any other payment 
                provided under this part, make monthly payments to the 
                MA plan in an amount equal to the product of--
                            ``(i) 0.5 percent of the national monthly 
                        per capita cost for expenditures for 
                        individuals enrolled under the original 
                        medicare fee-for-service program for the year; 
                        and
                            ``(ii) the total number of programs 
                        described in clauses (i) through (ix) of 
                        subparagraph (C) that the Secretary determines 
                        the plan is conducting for the year under such 
                        subparagraph.
                    ``(B) Limitation.--In no case may the total amount 
                of payment with respect to a year under subparagraph 
                (A) be greater than 2 percent of the national monthly 
                per capita cost for expenditures for individuals 
                enrolled under the original medicare fee-for-service 
                program for the year, as determined prior to the 
                application of risk adjustment under paragraph (4).
                    ``(C) Programs described.--The following programs 
                are described in this paragraph:
                            ``(i) Care management programs that--
                                    ``(I) target individuals with 1 or 
                                more chronic conditions;
                                    ``(II) identify gaps in care; and
                                    ``(III) facilitate improved care by 
                                using additional resources like nurses, 
                                nurse practitioners, and physician 
                                assistants.
                            ``(ii) Programs that focus on patient 
                        education and self-management of health 
                        conditions, including interventions that--
                                    ``(I) help manage chronic 
                                conditions;
                                    ``(II) reduce declines in health 
                                status; and
                                    ``(III) foster patient and provider 
                                collaboration.
                            ``(iii) Transitional care interventions 
                        that focus on care provided around a hospital 
                        inpatient episode, including programs that 
                        target post-discharge patient care in order to 
                        reduce unnecessary health complications and 
                        readmissions.
                            ``(iv) Patient safety programs, including 
                        provisions for hospital-based patient safety 
                        programs in contracts that the Medicare 
                        Advantage organization offering the MA plan has 
                        with hospitals.
                            ``(v) Financial policies that promote 
                        systematic coordination of care by primary care 
                        physicians across the full spectrum of 
                        specialties and sites of care, such as medical 
                        homes, capitation arrangements, or pay-for-
                        performance programs.
                            ``(vi) Programs that address, identify, and 
                        ameliorate health care disparities among 
                        principal at-risk subpopulations.
                            ``(vii) Medication therapy management 
                        programs that are more extensive than is 
                        required under section 1860D-4(c) (as 
                        determined by the Secretary).
                            ``(viii) Health information technology 
                        programs, including clinical decision support 
                        and other tools to facilitate data collection 
                        and ensure patient-centered, appropriate care.
                            ``(ix) Such other care management and 
                        coordination programs as the Secretary 
                        determines appropriate.
                    ``(D) Conduct of program in urban and rural 
                areas.--An MA plan may conduct a program described in 
                subparagraph (C) in a manner appropriate for an urban 
                or rural area, as applicable.
                    ``(E) Reporting of data.--Each Medicare Advantage 
                organization shall provide for the reporting to the 
                Secretary of information specified by the Secretary (in 
                order to determine whether an MA plan is eligible for a 
                care coordination and management performance bonus 
                under this paragraph) at such time and in such manner 
                as the Secretary shall specify.
                    ``(F) Periodic auditing.--The Secretary shall 
                provide for the annual auditing of programs described 
                in subparagraph (C) for which an MA plan receives a 
                care coordination and management performance bonus 
                under this paragraph. The Comptroller General shall 
                monitor auditing activities conducted under this 
                subparagraph.
            ``(2) Quality performance bonuses.--
                    ``(A) Quality bonus.--For years beginning with 
                2014, the Secretary shall, in addition to any other 
                payment provided under this part, make monthly payments 
                to an MA plan that achieves at least a 3 star rating 
                (or comparable rating) on a rating system described in 
                subparagraph (C) in an amount equal to--
                            ``(i) in the case of a plan that achieves a 
                        3 star rating (or comparable rating) on such 
                        system 2 percent of the national monthly per 
                        capita cost for expenditures for individuals 
                        enrolled under the original medicare fee-for-
                        service program for the year; and
                            ``(ii) in the case of a plan that achieves 
                        a 4 or 5 star rating (or comparable rating on 
                        such system, 4 percent of such national monthly 
                        per capita cost for the year.
                    ``(B) Improved quality bonus.--For years beginning 
                with 2014, in the case of an MA plan that does not 
                receive a quality bonus under subparagraph (A) and is 
                an improved quality MA plan with respect to the year 
                (as identified by the Secretary), the Secretary shall, 
                in addition to any other payment provided under this 
                part, make monthly payments to the MA plan in an amount 
                equal to 1 percent of such national monthly per capita 
                cost for the year.
                    ``(C) Use of rating system.--For purposes of 
                subparagraph (A), a rating system described in this 
                paragraph is--
                            ``(i) a rating system that uses up to 5 
                        stars to rate clinical quality and enrollee 
                        satisfaction and performance at the Medicare 
                        Advantage contract or MA plan level; or
                            ``(ii) such other system established by the 
                        Secretary that provides for the determination 
                        of a comparable quality performance rating to 
                        the rating system described in clause (i).
                    ``(D) Data used in determining score.--
                            ``(i) In general.--The rating of an MA plan 
                        under the rating system described in 
                        subparagraph (C) with respect to a year shall 
                        be based on based on the most recent data 
                        available.
                            ``(ii) Plans that fail to report data.--An 
                        MA plan which does not report data that enables 
                        the Secretary to rate the plan for purposes of 
                        subparagraph (A) or identify the plan for 
                        purposes of subparagraph (B) shall be counted, 
                        for purposes of such rating or identification, 
                        as having the lowest plan performance rating 
                        and the lowest percentage improvement, 
                        respectively.
            ``(3) Quality bonus for new and low enrollment ma plans.--
                    ``(A) New ma plans.--For years beginning with 2014, 
                in the case of an MA plan that has been in operation 
                for less than 3 years and was not able to receive a 
                bonus under subparagraph (A) or (B) of paragraph (2) 
                for the year, the Secretary shall, in addition to any 
                other payment provided under this part, make monthly 
                payments to the MA plan in an amount equal to 2 percent 
                of national monthly per capita cost for expenditures 
                for individuals enrolled under the original medicare 
                fee-for-service program for the year. In its fourth 
                year of operation, the MA plan shall be paid in the 
                same manner as other MA plans with comparable 
                enrollment.
                    ``(B) Low enrollment plans.--For years beginning 
                with 2014, in the case of an MA plan that has low 
                enrollment (as defined by the Secretary) and would not 
                otherwise be able to receive a bonus under subparagraph 
                (A) or (B) of paragraph (2) or subparagraph (A) of this 
                paragraph for the year (referred to in this 
                subparagraph as a `low enrollment plan'), the Secretary 
                shall use a regional or local mean of the rating of all 
                MA plans in the region or local area, as determined 
                appropriate by the Secretary, on measures used to 
                determine whether MA plans are eligible for a quality 
                or an improved quality bonus, as applicable, to 
                determine whether the low enrollment plan is eligible 
                for a bonus under such a subparagraph.
            ``(4) Risk adjustment.--The Secretary shall risk adjust a 
        performance bonus under this subsection in the same manner as 
        the Secretary risk adjusts beneficiary rebates described in 
        section 1854(b)(1)(C).
            ``(5) Notification.--The Secretary, in the annual 
        announcement required under subsection (b)(1)(B) for 2014 and 
        each succeeding year, shall notify the Medicare Advantage 
        organization of any performance bonus (including a care 
        coordination and management performance bonus under paragraph 
        (1), a quality performance bonus under paragraph (2), and a 
        quality bonus for new and low enrollment plans under paragraph 
        (3)) that the organization will receive under this subsection 
        with respect to the year. The Secretary shall provide for the 
        publication of the information described in the previous 
        sentence on the Internet website of the Centers for Medicare & 
        Medicaid Services.''.
                    (B) Conforming amendment.--Section 1853(a)(1)(B) of 
                the Social Security Act (42 U.S.C. 1395w-23(a)(1)(B)) 
                is amended--
                            (i) in clause (i), by inserting ``and any 
                        performance bonus under subsection (n)'' before 
                        the period at the end; and
                            (ii) in clause (ii), by striking ``(G)'' 
                        and inserting ``(G), plus the amount (if any) 
                        of any performance bonus under subsection 
                        (n)''.
            (2) Application of performance bonuses to ma regional 
        plans.--Section 1858 of the Social Security Act (42 U.S.C. 
        1395w-27a) is amended--
                    (A) in subsection (f)(1), by striking ``subsection 
                (e)'' and inserting ``subsections (e) and (i)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(i) Application of Performance Bonuses to MA Regional Plans.--For 
years beginning with 2014, the Secretary shall apply the performance 
bonuses under section 1853(n) (relating to bonuses for care 
coordination and management, quality performance, and new and low 
enrollment MA plans) to MA regional plans in a similar manner as such 
performance bonuses apply to MA plans under such subsection.''.
    (g) Grandfathering Supplemental Benefits for Current Enrolles After 
Implementation of Competitive Bidding.--Section 1853 of the Social 
Security Act (42 U.S.C. 1395w-23), as amended by subsection (f), is 
amended by adding at the end the following new subsection:
    ``(o) Grandfathering Supplemental Benefits for Current Enrolles 
After Implementation of Competitive Bidding.--
            ``(1) Identification of areas.--The Secretary shall 
        identify MA local areas in which, with respect to 2011, average 
        bids submitted by an MA organization under section 1854(a) for 
        MA local plans in the area are not greater than 75 percent of 
        the adjusted average per capita cost for the year involved, 
        determined under section 1876(a)(4), for the area for 
        individuals who are not enrolled in an MA plan under this part 
        for the year, but adjusted to exclude costs attributable to 
        payments under section 1848(o), 1886(n), and 1886(h).
            ``(2) Election to provide rebates to grandfathered 
        enrollees.--
                    ``(A) In general.--For years beginning with 2012, 
                each Medicare Advantage organization offering an MA 
                local plan in an area identified by the Secretary under 
                paragraph (1) may elect to provide rebates to 
                grandfathered enrollees under section 1854(b)(1)(C). In 
                the case where an MA organization makes such an 
                election, the monthly per capita dollar amount of such 
                rebates shall not exceed the applicable amount for the 
                year.
                    ``(B) Applicable amount.--For purposes of this 
                subsection, the term `applicable amount' means--
                            ``(i) for 2012, the monthly per capita 
                        dollar amount of such rebates provided to 
                        enrollees under the MA local plan with respect 
                        to 2011; and
                            ``(ii) for a subsequent year, 95 percent of 
                        the amount determined under this subparagraph 
                        for the preceding year.
            ``(3) Special rules for plans in identified areas.--
        Notwithstanding any other provision of this part, the following 
        shall apply with respect to each Medicare Advantage 
        organization offering an MA local plan in an area identified by 
        the Secretary under paragraph (1) that makes an election 
        described in paragraph (2):
                    ``(A) Payments.--The amount of the monthly payment 
                under this section to the Medicare Advantage 
                organization, with respect to coverage of a 
                grandfathered enrollee under this part in the area for 
                a month, shall be equal to--
                            ``(i) for 2012 and 2013, the sum of--
                                    ``(I) the bid amount under section 
                                1854(a) for the MA local plan; and
                                    ``(II) the applicable amount (as 
                                defined in paragraph (2)(B)) for the MA 
                                local plan for the year.
                            ``(ii) for 2014 and subsequent years, the 
                        sum of--
                                    ``(I) the MA competitive benchmark 
                                amount under subsection (j)(1)(A)(i) 
                                for the area for the month, adjusted, 
                                only to the extent the Secretary 
                                determines necessary, to account for 
                                induced utilization as a result of 
                                rebates provided to grandfathered 
                                enrollees (except that such adjustment 
                                shall not exceed 0.5 percent of such MA 
                                competitive benchmark amount); and
                                    ``(II) the applicable amount (as so 
                                defined) for the MA local plan for the 
                                year.
                    ``(B) Requirement to submit bids under competitive 
                bidding.--The Medicare Advantage organization shall 
                submit a single bid amount under section 1854(a) for 
                the MA local plan. The Medicare Advantage organization 
                shall remove from such bid amount any effects of 
                induced demand for care that may result from the higher 
                rebates available to grandfathered enrollees under this 
                subsection.
                    ``(C) Nonapplication of bonus payments and any 
                other rebates.--The Medicare Advantage organization 
                offering the MA local plan shall not be eligible for 
                any bonus payment under subsection (n) or any rebate 
                under this part (other than as provided under this 
                subsection) with respect to grandfathered enrollees.
                    ``(D) Nonapplication of service areas.--The service 
                areas established under subsection (d)(5) shall not 
                apply with respect to the MA local plan in the area so 
                identified.
                    ``(E) Nonapplication of limitation on application 
                of plan rebates toward payment of part b premium.--
                Notwithstanding clause (iii) of section 1854(b)(1)(C), 
                in the case of a grandfathered enrollee, a rebate under 
                such section may be used for the purpose described in 
                clause (ii)(III) of such section.
                    ``(F) Risk adjustment.--The Secretary shall risk 
                adjust rebates to grandfathered enrollees under this 
                subsection in the same manner as the Secretary risk 
                adjusts beneficiary rebates described in section 
                1854(b)(1)(C).
            ``(4) Definition of grandfathered enrollee.--In this 
        subsection, the term `grandfathered enrollee' means an 
        individual who is enrolled (as of the date of enactment of this 
        subsection) in an MA local plan in an area that is identified 
        by the Secretary under paragraph (1).''.
    (h) Transitional Extra Benefits.--Section 1853 of the Social 
Security Act (42 U.S.C. 1395w-23), as amended by subsections (f) and 
(g), is amended by adding at the end the following new subsection:
    ``(p) Transitional Extra Benefits.--
            ``(1) In general.--For years beginning with 2012, the 
        Secretary shall provide transitional rebates under section 
        1854(b)(1)(C) for the provision of extra benefits (as specified 
        by the Secretary) to enrollees described in paragraph (2).
            ``(2) Enrollees described.--An enrollee described in this 
        paragraph is an individual who--
                    ``(A) enrolls in an MA local plan in an applicable 
                area; and
                    ``(B) experiences a significant reduction in extra 
                benefits described in clause (ii) of section 
                1854(b)(1)(C) as a result of competitive bidding under 
                this part (as determined by the Secretary).
            ``(3) Applicable areas.--In this subsection, the term 
        `applicable area' means the following:
                    ``(A) The 2 largest metropolitan statistical areas, 
                if the Secretary determines that the total amount of 
                such extra benefits for each enrollee for the month in 
                those areas is greater than $100.
                    ``(B) A county where--
                            ``(i) the MA area-specific non-drug monthly 
                        benchmark amount for a month in 2011 is equal 
                        to the legacy urban floor amount (as described 
                        in subsection (c)(1)(B)(iii)), as determined by 
                        the Secretary for the area for 2011;
                            ``(ii) the percentage of Medicare Advantage 
                        eligible beneficiaries in the county who are 
                        enrolled in an MA plan for 2011 is greater than 
                        30 percent (as determined by the Secretary); 
                        and
                            ``(iii) average bids submitted by an MA 
                        organization under section 1854(a) for MA local 
                        plans in the county for 2011 are not greater 
                        than the adjusted average per capita cost for 
                        the year involved, determined under section 
                        1876(a)(4), for the county for individuals who 
                        are not enrolled in an MA plan under this part 
                        for the year, but adjusted to exclude costs 
                        attributable to payments under section 1848(o), 
                        1886(n), and 1886(h).
                    ``(C) If the Secretary determines appropriate, a 
                county contiguous to an area or county described in 
                subparagraph (A) or (B), respectively.
            ``(4) Review of plan bids.--In the case of a bid submitted 
        by an MA organization under section 1854(a) for an MA local 
        plan in an applicable area, the Secretary shall review such bid 
        in order to ensure that extra benefits (as specified by the 
        Secretary) are provided to enrollees described in paragraph 
        (2).
            ``(5) Funding.--The Secretary shall provide for the 
        transfer from the Federal Hospital Insurance Trust Fund under 
        section 1817 and the Federal Supplementary Medical Insurance 
        Trust Fund established under section 1841, in such proportion 
        as the Secretary determines appropriate, of $5,000,000,000 for 
        the period of fiscal years 2012 through 2019 for the purpose of 
        providing transitional rebates under section 1854(b)(1)(C) for 
        the provision of extra benefits under this subsection.''.
    (i) Nonapplication of Competitive Bidding and Related Provisions 
and Clarification of MA Payment Area for PACE Programs.--
            (1) Nonapplication of competitive bidding and related 
        provisions for pace programs.--Section 1894 of the Social 
        Security Act (42 U.S.C. 1395eee) is amended--
                    (A) by redesignating subsections (h) and (i) as 
                subsections (i) and (j), respectively;
                    (B) by inserting after subsection (g) the following 
                new subsection:
    ``(h) Nonapplication of Competitive Bidding and Related Provisions 
Under Part C.--With respect to a PACE program under this section, the 
following provisions (and regulations relating to such provisions) 
shall not apply:
            ``(1) Section 1853(j)(1)(A)(i), relating to MA area-
        specific non-drug monthly benchmark amount being based on 
        competitive bids.
            ``(2) Section 1853(d)(5), relating to the establishment of 
        MA local plan service areas.
            ``(3) Section 1853(n), relating to the payment of 
        performance bonuses.
            ``(4) Section 1853(o), relating to grandfathering 
        supplemental benefits for current enrollees after 
        implementation of competitive bidding.
            ``(5) Section 1853(p), relating to transitional extra 
        benefits.''.
            (2) Special rule for ma payment area for pace programs.--
        Section 1853(d) of the Social Security Act (42 U.S.C. 1395w-
        23(d)), as amended by subsection (e), is amended by adding at 
        the end the following new paragraph:
            ``(6) Special rule for ma payment area for pace programs.--
        For years beginning with 2012, in the case of a PACE program 
        under section 1894, the MA payment area shall be the MA local 
        area (as defined in paragraph (2)).''.
    (j) Limitation on Effective Date.--Notwithstanding any other 
provision of this section or the amendments made by this section, such 
provisions or amendments shall not take effect if the Chief Actuary of 
the Centers for Medicare & Medicaid Services certifies, not later than 
3 months after the date of enactment of this Act, that Medicare 
beneficiaries currently enrolled in Medicare Advantage plans will, as a 
result of the implementation of those provisions or amendments, lose 
basic benefits which are available under parts A and B of title XVIII 
of the Social Security Act to individuals entitled to benefits under 
such part A and enrolled under such part B.

SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION.

    (a) Limitation on Variation of Cost Sharing for Certain Benefits.--
            (1) In general.--Section 1852(a)(1)(B) of the Social 
        Security Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended--
                    (A) in clause (i), by inserting ``, subject to 
                clause (iii),'' after ``and B or''; and
                    (B) by adding at the end the following new clauses:
                            ``(iii) Limitation on variation of cost 
                        sharing for certain benefits.--Subject to 
                        clause (v), cost-sharing for services described 
                        in clause (iv) shall not exceed the cost-
                        sharing required for those services under parts 
                        A and B.
                            ``(iv) Services described.--The following 
                        services are described in this clause:
                                    ``(I) Chemotherapy administration 
                                services.
                                    ``(II) Renal dialysis services (as 
                                defined in section 1881(b)(14)(B)).
                                    ``(III) Skilled nursing care.
                                    ``(IV) Such other services that the 
                                Secretary determines appropriate 
                                (including services that the Secretary 
                                determines require a high level of 
                                predictability and transparency for 
                                beneficiaries).
                            ``(v) Exception.--In the case of services 
                        described in clause (iv) for which there is no 
                        cost-sharing required under parts A and B, 
                        cost-sharing may be required for those services 
                        in accordance with clause (i).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning on or after January 1, 
        2011.
    (b) Application of Rebates, Performance Bonuses, and Premiums.--
            (1) Application of rebates.--Section 1854(b)(1)(C) of the 
        Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)) is amended--
                    (A) in clause (ii), by striking ``rebate.--A 
                rebate'' and inserting ``rebate for plan years before 
                2012.--For plan years before 2012, a rebate'';
                    (B) by redesignating clauses (iii) and (iv) as 
                clauses (iv) and (v); and
                    (C) by inserting after clause (ii) the following 
                new clause:
                            ``(iii) Form of rebate for plan year 2012 
                        and subsequent plan years.--For plan years 
                        beginning on or after January 1, 2012, a rebate 
                        required under this subparagraph may not be 
                        used for the purpose described in clause 
                        (ii)(III) and shall be provided through the 
                        application of the amount of the rebate in the 
                        following priority order:
                                    ``(I) First, to use the most 
                                significant share to meaningfully 
                                reduce cost-sharing otherwise 
                                applicable for benefits under the 
                                original medicare fee-for-service 
                                program under parts A and B and for 
                                qualified prescription drug coverage 
                                under part D, including the reduction 
                                of any deductibles, copayments, and 
                                maximum limitations on out-of-pocket 
                                expenses otherwise applicable. Any 
                                reduction of maximum limitations on 
                                out-of-pocket expenses under the 
                                preceding sentence shall apply to all 
                                benefits under the original medicare 
                                fee-for-service program option. The 
                                Secretary may provide guidance on 
                                meaningfully reducing cost-sharing 
                                under this subclause, except that such 
                                guidance may not require a particular 
                                amount of cost-sharing or reduction in 
                                cost-sharing.
                                    ``(II) Second, to use the next most 
                                significant share to meaningfully 
                                provide coverage of preventive and 
                                wellness health care benefits (as 
                                defined by the Secretary) which are not 
                                benefits under the original medicare 
                                fee-for-service program, such as 
                                smoking cessation, a free flu shot, and 
                                an annual physical examination.
                                    ``(III) Third, to use the remaining 
                                share to meaningfully provide coverage 
                                of other health care benefits which are 
                                not benefits under the original 
                                medicare fee-for-service program, such 
                                as eye examinations and dental 
                                coverage, and are not benefits 
                                described in subclause (II).''.
            (2) Application of performance bonuses.--Section 1853(n) of 
        the Social Security Act, as added by section 3201(f), is 
        amended by adding at the end the following new paragraph:
            ``(6) Application of performance bonuses.--For plan years 
        beginning on or after January 1, 2014, any performance bonus 
        paid to an MA plan under this subsection shall be used for the 
        purposes, and in the priority order, described in subclauses 
        (I) through (III) of section 1854(b)(1)(C)(iii).''.
            (3) Application of ma monthly supplementary beneficiary 
        premium.--Section 1854(b)(2)(C) of the Social Security Act (42 
        U.S.C. 1395w-24(b)(2)(C)) is amended--
                    (A) by striking ``Premium.--The term'' and 
                inserting ``premium.--
                            ``(i) In general.--The term''; and
                            (i) by adding at the end the following new 
                        clause:
                            ``(ii) Application of ma monthly 
                        supplementary beneficiary premium.--For plan 
                        years beginning on or after January 1, 2012, 
                        any MA monthly supplementary beneficiary 
                        premium charged to an individual enrolled in an 
                        MA plan shall be used for the purposes, and in 
                        the priority order, described in subclauses (I) 
                        through (III) of paragraph (1)(C)(iii).''.
    (c) Categorization of Medicare Advantage Plans.--
            (1) In general.--Section 1851 of the Social Security Act 
        (42 U.S.C. 1395w-21) is amended by adding at the end the 
        following new subsection:
    ``(k) Categorization of Plans.--
            ``(1) In general.--Not later than January 1, 2011, the 
        Secretary shall establish 2 or more categories of MA plans 
        offered by Medicare Advantage organizations based on the ratio 
        of the amount described in paragraph (2) to the aggregate 
        monthly bid amount submitted under clause (i) of section 
        1854(a)(6)(A) for the year, expressed as a percentage.
            ``(2) Amount described.--The amount described in this 
        paragraph is the sum of--
                    ``(A) the amount of such aggregate monthly bid 
                amount that is attributable under clause (ii)(III) of 
                such section to the provision of supplemental health 
                care benefits; and
                    ``(B) the amount (if any) of any rebate under 
                section 1853(a)(1)(E).
            ``(3) Required inclusion of category in plan name and 
        marketing materials.--For plan years beginning on or after 
        January 1, 2011, a Medicare Advantage organization shall ensure 
        that the name of each MA plan offered by the Medicare Advantage 
        organization and any marketing materials with respect to such 
        plan include the category of the plan, as determined under 
        paragraph (1).''.
            (2) Required inclusion of category in information provided 
        to promote informed choice.--Section 1851(d)(4) of the Social 
        Security Act (42 U.S.C. 1395w-21(d)(4)) is amended by adding at 
        the end the following new subparagraph:
                    ``(F) Information regarding plan category.--For 
                plan years beginning on or after January 1, 2011, the 
                category of the plan (as determined under subsection 
                (k)(1)).''.

SEC. 3203. APPLICATION OF CODING INTENSITY ADJUSTMENT DURING MA PAYMENT 
              TRANSITION.

    Section 1853(a)(1)(C) of the Social Security Act (42 U.S.C. 1395w-
23(a)(1)(C)) is amended by adding at the end the following new clause:
                            ``(iii) Application of coding intensity 
                        adjustment for 2011 and subsequent years.--
                                    ``(I) Requirement to apply in 2011 
                                through 2013.--In order to ensure 
                                payment accuracy, the Secretary shall 
                                conduct an analysis of the differences 
                                described in clause (ii)(I). The 
                                Secretary shall ensure that the results 
                                of such analysis are incorporated into 
                                the risk scores for 2011, 2012, and 
                                2013.
                                    ``(II) Authority to apply in 2014 
                                and subsequent years.--The Secretary 
                                may, as appropriate, incorporate the 
                                results of such analysis into the risk 
                                scores for 2014 and subsequent 
                                years.''.

SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

    (a) Annual 45-day Period for Disenrollment From MA Plans to Elect 
to Receive Benefits Under the Original Medicare Fee-for-service 
Program.--
            (1) In general.--Section 1851(e)(2)(C) of the Social 
        Security Act (42 U.S.C. 1395w-1(e)(2)(C)) is amended to read as 
        follows:
                    ``(C) Annual 45-day period for disenrollment from 
                ma plans to elect to receive benefits under the 
                original medicare fee-for-service program.--Subject to 
                subparagraph (D), at any time during the first 45 days 
                of a year (beginning with 2011), an individual who is 
                enrolled in a Medicare Advantage plan may change the 
                election under subsection (a)(1), but only with respect 
                to coverage under the original medicare fee-for-service 
                program under parts A and B.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to 2011 and succeeding years.
    (b) Timing of the Annual, Coordinated Election Period Under Parts C 
and D.--Section 1851(e)(3)(B) of the Social Security Act (42 U.S.C. 
1395w-1(e)(3)(B)) is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) in clause (iv)--
                    (A) by striking ``and succeeding years'' and 
                inserting ``, 2008, 2009, and 2010''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(v) with respect to 2012 and succeeding 
                        years, the period beginning on October 15 and 
                        ending on December 7 of the year before such 
                        year.''.

SEC. 3205. EXTENSION FOR SPECIALIZED MA PLANS FOR SPECIAL NEEDS 
              INDIVIDUALS.

    (a) Extension of SNP Authority.--Section 1859(f)(1) of the Social 
Security Act (42 U.S.C. 1395w-28(f)(1)), as amended by section 164(a) 
of the Medicare Improvements for Patients and Providers Act of 2008 
(Public Law 110-275), is amended by striking ``2011'' and inserting 
``2014''.
    (b) Authority To Apply Frailty Adjustment Under PACE Payment 
Rules.--Section 1853(a)(1)(B) of the Social Security Act (42 U.S.C. 
1395w-23(a)(1)(B)) is amended by adding at the end the following new 
clause:
                            ``(iv) Authority to apply frailty 
                        adjustment under pace payment rules for certain 
                        specialized ma plans for special needs 
                        individuals.--
                                    ``(I) In general.--Notwithstanding 
                                the preceding provisions of this 
                                paragraph, for plan year 2011 and 
                                subsequent plan years, in the case of a 
                                plan described in subclause (II), the 
                                Secretary may apply the payment rules 
                                under section 1894(d) (other than 
                                paragraph (3) of such section) rather 
                                than the payment rules that would 
                                otherwise apply under this part, but 
                                only to the extent necessary to reflect 
                                the costs of treating high 
                                concentrations of frail individuals.
                                    ``(II) Plan described.--A plan 
                                described in this subclause is a 
                                specialized MA plan for special needs 
                                individuals described in section 
                                1859(b)(6)(B)(ii) that is fully 
                                integrated with capitated contracts 
                                with States for Medicaid benefits, 
                                including long-term care, and that have 
                                similar average levels of frailty (as 
                                determined by the Secretary) as the 
                                PACE program.''.
    (c) Transition and Exception Regarding Restriction on Enrollment.--
Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)) is 
amended by adding at the end the following new paragraph:
            ``(6) Transition and exception regarding restriction on 
        enrollment.--
                    ``(A) In general.--Subject to subparagraph (C), the 
                Secretary shall establish procedures for the transition 
                of applicable individuals to--
                            ``(i) a Medicare Advantage plan that is not 
                        a specialized MA plan for special needs 
                        individuals (as defined in subsection (b)(6)); 
                        or
                            ``(ii) the original medicare fee-for-
                        service program under parts A and B.
                    ``(B) Applicable individuals.--For purposes of 
                clause (i), the term `applicable individual' means an 
                individual who--
                            ``(i) is enrolled under a specialized MA 
                        plan for special needs individuals (as defined 
                        in subsection (b)(6)); and
                            ``(ii) is not within the 1 or more of the 
                        classes of special needs individuals to which 
                        enrollment under the plan is restricted to.
                    ``(C) Exception.--The Secretary shall provide for 
                an exception to the transition described in 
                subparagraph (A) for a limited period of time for 
                individuals enrolled under a specialized MA plan for 
                special needs individuals described in subsection 
                (b)(6)(B)(ii) who are no longer eligible for medical 
                assistance under title XIX.
                    ``(D) Timeline for initial transition.--The 
                Secretary shall ensure that applicable individuals 
                enrolled in a specialized MA plan for special needs 
                individuals (as defined in subsection (b)(6)) prior to 
                January 1, 2010, are transitioned to a plan or the 
                program described in subparagraph (A) by not later than 
                January 1, 2013.''.
    (d) Temporary Extension of Authority To Operate but No Service Area 
Expansion for Dual SNPS That Do Not Meet Certain Requirements.--Section 
164(c)(2) of the Medicare Improvements for Patients and Providers Act 
of 2008 (Public Law 110-275) is amended by striking ``December 31, 
2010'' and inserting ``December 31, 2012''.
    (e) Authority To Require Special Needs Plans Be NCQA Approved.--
Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)), as 
amended by subsections (a) and (c), is amended--
            (1) in paragraph (2), by adding at the end the following 
        new subparagraph:
                    ``(C) If applicable, the plan meets the requirement 
                described in paragraph (7).'';
            (2) in paragraph (3), by adding at the end the following 
        new subparagraph:
                    ``(E) If applicable, the plan meets the requirement 
                described in paragraph (7).'';
            (3) in paragraph (4), by adding at the end the following 
        new subparagraph:
                    ``(C) If applicable, the plan meets the requirement 
                described in paragraph (7).''; and
            (4) by adding at the end the following new paragraph:
            ``(7) Authority to require special needs plans be ncqa 
        approved.--For 2012 and subsequent years, the Secretary shall 
        require that a Medicare Advantage organization offering a 
        specialized MA plan for special needs individuals be approved 
        by the National Committee for Quality Assurance (based on 
        standards established by the Secretary).''.
    (f) Risk Adjustment.--Section 1853(a)(1)(C) of the Social Security 
Act (42 U.S.C. 1395i-23(a)(1)(C)) is amended by adding at the end the 
following new clause:
                            ``(iii) Improvements to risk adjustment for 
                        special needs individuals with chronic health 
                        conditions.--
                                    ``(I) In general.--For 2011 and 
                                subsequent years, for purposes of the 
                                adjustment under clause (i) with 
                                respect to individuals described in 
                                subclause (II), the Secretary shall use 
                                a risk score that reflects the known 
                                underlying risk profile and chronic 
                                health status of similar individuals. 
                                Such risk score shall be used instead 
                                of the default risk score for new 
                                enrollees in Medicare Advantage plans 
                                that are not specialized MA plans for 
                                special needs individuals (as defined 
                                in section 1859(b)(6)).
                                    ``(II) Individuals described.--An 
                                individual described in this subclause 
                                is a special needs individual described 
                                in subsection (b)(6)(B)(iii) who 
                                enrolls in a specialized MA plan for 
                                special needs individuals on or after 
                                January 1, 2011.
                                    ``(III) Evaluation.--For 2011 and 
                                periodically thereafter, the Secretary 
                                shall evaluate and revise the risk 
                                adjustment system under this 
                                subparagraph in order to, as accurately 
                                as possible, account for higher medical 
                                and care coordination costs associated 
                                with frailty, individuals with 
                                multiple, comorbid chronic conditions, 
                                and individuals with a diagnosis of 
                                mental illness, and also to account for 
                                costs that may be associated with 
                                higher concentrations of beneficiaries 
                                with those conditions.
                                    ``(IV) Publication of evaluation 
                                and revisions.--The Secretary shall 
                                publish, as part of an announcement 
                                under subsection (b), a description of 
                                any evaluation conducted under 
                                subclause (III) during the preceding 
                                year and any revisions made under such 
                                subclause as a result of such 
                                evaluation.''.
    (g) Technical Correction.--Section 1859(f)(5) of the Social 
Security Act (42 U.S.C. 1395w-28(f)(5)) is amended, in the matter 
preceding subparagraph (A), by striking ``described in subsection 
(b)(6)(B)(i)''.

SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I), 
by striking ``January 1, 2010'' and inserting ``January 1, 2013''.

SEC. 3207. TECHNICAL CORRECTION TO MA PRIVATE FEE-FOR-SERVICE PLANS.

    (a) Clarification Regarding Definition of Network Area.--
            (1) In general.--Section 1852(d)(5)(B) of the Social 
        Security Act (42 U.S.C. 1395w-22(d)(5)(B)) is amended by 
        striking ``network-based plans'' and inserting ``Medicare 
        Advantage organizations offering a network-based plan''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect as if included in the enactment of section 
        162 of the Medicare Improvements for Patients and Providers Act 
        of 2008 (Public Law 110-275; 122 Stat. 2569).
    (b) Application of Service Area Waiver to Certain Employer Plans.--
For plan year 2011 and subsequent plan years, to the extent that the 
Secretary of Health and Human Services is applying the 2008 service 
area extension waiver policy (as modified in the April 11, 2008, 
Centers for Medicare & Medicaid Services' memorandum with the subject 
``2009 Employer Group Waiver-Modification of the 2008 Service Area 
Extension Waiver Granted to Certain MA Local Coordinated Care Plans'') 
to Medicare Advantage coordinated care plans, the Secretary shall 
extend the application of such waiver policy to employers who contract 
directly with the Secretary as a Medicare Advantage private fee-for-
service plan under section 1857(i)(2) of the Social Security Act (42 
U.S.C. 1395w-27(i)(2)) and that had enrollment as of October 1, 2009.

SEC. 3208. MAKING SENIOR HOUSING FACILITY DEMONSTRATION PERMANENT.

    (a) In General.--Section 1859 of the Social Security Act (42 U.S.C. 
1395w-28) is amended by adding at the end the following new subsection:
    ``(g) Special Rules for Senior Housing Facility Plans.--
            ``(1) In general.--In the case of a Medicare Advantage 
        senior housing facility plan described in paragraph (2), 
        notwithstanding any other provision of this part to the 
        contrary and in accordance with regulations of the Secretary, 
        the service area of such plan may be limited to a senior 
        housing facility in a geographic area.
            ``(2) Medicare advantage senior housing facility plan 
        described.--For purposes of this subsection, a Medicare 
        Advantage senior housing facility plan is a Medicare Advantage 
        plan that--
                    ``(A) restricts enrollment of individuals under 
                this part to individuals who reside in a continuing 
                care retirement community (as defined in section 
                1852(l)(4)(B));
                    ``(B) provides primary care services onsite and has 
                a ratio of accessible physicians to beneficiaries that 
                the Secretary determines is adequate;
                    ``(C) provides transportation services for 
                beneficiaries to specialty providers outside of the 
                facility; and
                    ``(D) has participated (as of December 31, 2009) in 
                a demonstration project established by the Secretary 
                under which such a plan was offered for not less than 1 
                year.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on January 1, 2010, and shall apply to plan years beginning on 
or after such date.

SEC. 3209. DEVELOPMENT OF NEW STANDARDS FOR CERTAIN MEDIGAP PLANS.

    (a) In General.--Section 1882 of the Social Security Act (42 U.S.C. 
1395ss) is amended by adding at the end the following new subsection:
    ``(y) Development of New Standards for Certain Medicare 
Supplemental Policies.--
            ``(1) In general.--The Secretary shall request the National 
        Association of Insurance Commissioners to review and revise the 
        standards for benefit packages described in paragraph (2) under 
        subsection (p)(1), to otherwise update standards to include 
        requirements for nominal cost sharing to encourage the use of 
        appropriate physicians' services under part B. Such revisions 
        shall be based on evidence published in peer-reviewed journals 
        or current examples used by integrated delivery systems and 
        made consistent with the rules applicable under subsection 
        (p)(1)(E) with the reference to the `1991 NAIC Model 
        Regulation' deemed a reference to the NAIC Model Regulation as 
        published in the Federal Register on December 4, 1998, and as 
        subsequently updated by the National Association of Insurance 
        Commissioners to reflect previous changes in law and the 
        reference to `date of enactment of this subsection' deemed a 
        reference to the date of enactment of the America's Healthy 
        Future Act of 2009. To the extent practicable, such revision 
        shall provide for the implementation of revised standards for 
        benefit packages as of January 1, 2015.
            ``(2) Benefit packages described.--The benefit packages 
        described in this paragraph are benefit packages classified as 
        `C' and `F'.''.
    (b) Conforming Amendment.--Section 1882(o)(1) of the Social 
Security Act (42 U.S.C. 1395ss(o)(1)) is amended by striking ``, and 
(w)'' and inserting ``(w), and (y)''.

 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.

    (a) Condition for Coverage of Drugs Under Part D.--Part D of Title 
XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.), is 
amended by adding at the end the following new section:

           ``condition for coverage of drugs under this part

    ``Sec. 1860D-43.  (a) In General.--In order for coverage to be 
available under this part for covered part D drugs (as defined in 
section 1860D-2(e)) of a manufacturer, the manufacturer must--
            ``(1) participate in the Medicare prescription drug 
        discount program under section 1860D-14A;
            ``(2) have entered into and have in effect an agreement 
        described in subsection (b) of such section with the Secretary; 
        and
            ``(3) have entered into and have in effect, under terms and 
        conditions specified by the Secretary, a contract with a third 
        party that the Secretary has entered into a contract with under 
        subsection (d)(3) of such section.
    ``(b) Effective Date.--Subsection (a) shall apply to covered part D 
drugs dispensed under this part on or after July 1, 2010.
    ``(c) Authorizing Coverage for Drugs Not Covered Under 
Agreements.--Subsection (a) shall not apply to the dispensing of a 
covered part D drug if--
            ``(1) the Secretary has made a determination that the 
        availability of the drug is essential to the health of 
        beneficiaries under this part; or
            ``(2) the Secretary determines that in the period beginning 
        on July 1, 2010, and ending on December 31, 2010, there were 
        extenuating circumstances.
    ``(d) Definition of Manufacturer.--In this section, the term 
`manufacturer' has the meaning given such term in section 1860D-
14(g)(5).''.
    (b) Medicare Prescription Drug Discount Program for Brand-name 
Drugs.--Part D of title XVIII of the Social Security Act (42 U.S.C. 
1395w-101) is amended by inserting after section 1860D-14 the following 
new section:

   ``medicare prescription drug discount program for brand-name drugs

    ``Sec. 1860D-14A.  (a) Establishment.--The Secretary shall 
establish a Medicare prescription drug discount program (in this 
section referred to as the `program') by not later than July 1, 2010. 
Under the program, the Secretary shall enter into agreements described 
in subsection (b) with manufacturers and provide for the performance of 
the duties described in subsection (c)(1).
    ``(b) Terms of Agreement.--
            ``(1) In general.--
                    ``(A) Agreement.--An agreement under this section 
                shall require the manufacturer to provide applicable 
                beneficiaries access to discounted prices for 
                applicable drugs of the manufacturer.
                    ``(B) Provision of discounted prices at the point-
                of-sale.--Except as provided in subsection 
                (c)(1)(A)(iii), such discounted prices shall be 
                provided to the applicable beneficiary at the pharmacy 
                or by the mail order service at the point-of-sale of an 
                applicable drug.
                    ``(C) Timing of agreement.--
                            ``(i) Special rule for 2010 and 2011.--In 
                        order for an agreement with a manufacturer to 
                        be in effect under this section with respect to 
                        the period beginning on July 1, 2010, and 
                        ending on December 31, 2011, the manufacturer 
                        shall enter into such agreement not later than 
                        March 1, 2010.
                            ``(ii) 2012 and subsequent years.--In order 
                        for an agreement with a manufacturer to be in 
                        effect under this section with respect to plan 
                        year 2012 or a subsequent plan year, the 
                        manufacturer shall enter into such agreement 
                        (or such agreement shall be renewed under 
                        paragraph (4)(A)) not later than January 30 of 
                        the preceding year.
            ``(2) Provision of appropriate data.--Each manufacturer 
        with an agreement in effect under this section shall collect 
        and have available appropriate data, as determined by the 
        Secretary, to ensure that it can demonstrate compliance with 
        the requirements of paragraph (1).
            ``(3) Compliance with requirements for administration of 
        program.--Each manufacturer with an agreement in effect under 
        this section shall comply with requirements imposed by the 
        Secretary or a third party with a contract under subsection 
        (d)(3), as applicable, for purposes of administering the 
        program, including any determination under clause (i) of 
        subsection (c)(1)(A) or procedures established under such 
        subsection (c)(1)(A).
            ``(4) Length of agreement.--
                    ``(A) In general.--An agreement under this section 
                shall be effective for an initial period of not less 
                than 18 months and shall be automatically renewed for a 
                period of not less than 1 year unless terminated under 
                subparagraph (B).
                    ``(B) Termination.--
                            ``(i) By the secretary.--The Secretary may 
                        provide for termination of an agreement under 
                        this section for violation of the requirements 
                        of the agreement or other good cause shown. 
                        Such termination shall not be effective earlier 
                        than 30 days after the date of notice of such 
                        termination. The Secretary shall provide, upon 
                        request, a manufacturer with a hearing 
                        concerning such a termination, but such hearing 
                        shall not delay the effective date of the 
                        termination.
                            ``(ii) By a manufacturer.--A manufacturer 
                        may terminate an agreement under this section 
                        for any reason. Any such termination shall not 
                        be effective, with respect to a plan year--
                                    ``(I) if the termination occurs 
                                before January 30 of a plan year, the 
                                end of the plan year; and
                                    ``(II) if the termination occurs on 
                                or after January 30 of a plan year, the 
                                end of the succeeding plan year.
                            ``(iii) Effectiveness of termination.--Any 
                        termination under this subparagraph shall not 
                        affect discounts for applicable drugs of the 
                        manufacturer that are due under the agreement 
                        before the effective date of its termination.
                            ``(iv) Notice to third party.--The 
                        Secretary shall provide notice of such 
                        termination to a third party with a contract 
                        under subsection (d)(3) within not less than 30 
                        days before the effective date of such 
                        termination.
    ``(c) Duties Described and Special Rule for Supplemental 
Benefits.--
            ``(1) Duties described.--The duties described in this 
        subsection are the following:
                    ``(A) Administration of program.--Administering the 
                program, including--
                            ``(i) the determination of the amount of 
                        the discounted price of an applicable drug of a 
                        manufacturer;
                            ``(ii) except as provided in clause (iii), 
                        the establishment of procedures under which 
                        discounted prices are provided to applicable 
                        beneficiaries at pharmacies or by mail order 
                        service at the point-of-sale of an applicable 
                        drug;
                            ``(iii) in the case where, during the 
                        period beginning on July 1, 2010, and ending on 
                        December 31, 2011, it is not practicable to 
                        provide such discounted prices at the point-of-
                        sale (as described in clause (ii)), the 
                        establishment of procedures to provide such 
                        discounted prices as soon as practicable after 
                        the point-of-sale;
                            ``(iv) the establishment of procedures to 
                        ensure that, not later than the applicable 
                        number of calendar days after the dispensing of 
                        an applicable drug by a pharmacy or mail order 
                        service, the pharmacy or mail order service is 
                        reimbursed for an amount equal to the 
                        difference between--
                                    ``(I) the negotiated price of the 
                                applicable drug; and
                                    ``(II) the discounted price of the 
                                applicable drug;
                            ``(v) the establishment of procedures to 
                        ensure that the discounted price for an 
                        applicable drug under this section is applied 
                        before any coverage or financial assistance 
                        under other health benefit plans or programs 
                        that provide coverage or financial assistance 
                        for the purchase or provision of prescription 
                        drug coverage on behalf of applicable 
                        beneficiaries as the Secretary may specify; and
                            ``(vi) the establishment of procedures to 
                        implement the special rule for supplemental 
                        benefits under paragraph (2).
                    ``(B) Monitoring compliance.--
                            ``(i) In general.--Monitoring compliance by 
                        a manufacturer with the terms of an agreement 
                        under this section.
                            ``(ii) Notification.--If a third party with 
                        a contract under subsection (d)(3) determines 
                        that the manufacturer is not in compliance with 
                        such agreement, the third party shall notify 
                        the Secretary of such noncompliance for 
                        appropriate enforcement under subsection (e).
            ``(2) Special rule for supplemental benefits.--For plan 
        year 2010 and each subsequent plan year, in the case where an 
        applicable beneficiary has supplemental benefits with respect 
        to applicable drugs under the prescription drug plan or MA-PD 
        plan that the applicable beneficiary is enrolled in, the 
        applicable beneficiary shall not be provided a discounted price 
        for an applicable drug under this section until after such 
        supplemental benefits have been applied with respect to the 
        applicable drug.
    ``(d) Administration.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall provide for the implementation of this section, including 
        the performance of the duties described in subsection (c)(1).
            ``(2) Limitation.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                providing for such implementation, the Secretary shall 
                not receive or distribute any funds of a manufacturer 
                under the program.
                    ``(B) Exception.--The limitation under subparagraph 
                (A) shall not apply to the Secretary with respect to 
                drugs dispensed during the period beginning on July 1, 
                2010, and ending on December 31, 2010, but only if the 
                Secretary determines that the exception to such 
                limitation under this subparagraph is necessary in 
                order for the Secretary to begin implementation of this 
                section and provide applicable beneficiaries timely 
                access to discounted prices during such period.
            ``(3) Contract with third parties.--The Secretary shall 
        enter into a contract with 1 or more third parties to 
        administer the requirements established by the Secretary in 
        order to carry out this section. At a minimum, the contract 
        with a third party under the preceding sentence shall require 
        that the third party--
                    ``(A) receive and transmit information between the 
                Secretary, manufacturers, and other individuals or 
                entities the Secretary determines appropriate; and
                    ``(B) receive, distribute, or facilitate the 
                distribution of funds of manufacturers to appropriate 
                individuals or entities in order to meet the 
                obligations of manufacturers under agreements under 
                this section.
            ``(4) Performance requirements.--The Secretary shall 
        establish performance requirements for a third party with a 
        contract under paragraph (3).
            ``(5) Implementation.--The Secretary may implement the 
        program under this section by program instruction or otherwise.
            ``(6) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the program under this section.
    ``(e) Enforcement.--
            ``(1) Audits.--Each manufacturer with an agreement in 
        effect under this section shall be subject to periodic audit by 
        the Secretary.
            ``(2) Civil money penalty.--
                    ``(A) In general.--The Secretary shall impose a 
                civil money penalty on a manufacturer that fails to 
                provide applicable beneficiaries discounts for 
                applicable drugs of the manufacturer in accordance with 
                such agreement for each such failure in an amount the 
                Secretary determines is commensurate with the sum of--
                            ``(i) the amount that the manufacturer 
                        would have paid with respect to such discounts 
                        under the agreement; and
                            ``(ii) 25 percent of such amount.
                    ``(B) Application.--The provisions of section 1128A 
                (other than subsections (a) and (b)) shall apply to a 
                civil money penalty under this paragraph in the same 
                manner as such provisions apply to a penalty or 
                proceeding under section 1128A(a).
    ``(f) Clarification Regarding Availability of Other Covered Part D 
Drugs.--Nothing in this section shall prevent an applicable beneficiary 
from purchasing a covered part D drug that is not an applicable drug 
(including a generic drug or a drug that is not on the formulary of the 
prescription drug plan or MA-PD plan that the applicable beneficiary is 
enrolled in).
    ``(g) Definitions.--In this section:
            ``(1) Applicable beneficiary.--The term `applicable 
        beneficiary' means an individual who--
                    ``(A) is enrolled in a prescription drug plan or an 
                MA-PD plan;
                    ``(B) is not enrolled in a qualified retiree 
                prescription drug plan;
                    ``(C) is not entitled to an income-related subsidy 
                under section 1860D-14(a);
                    ``(D) is not subject to a reduction in premium 
                subsidy under section 1839(i) or an increase in the 
                base beneficiary premium under section 1860D-13(a)(7); 
                and
                    ``(E) who--
                            ``(i) has reached or exceeded the initial 
                        coverage limit under section 1860D-2(b)(3) 
                        during the year; and
                            ``(ii) has not incurred costs for covered 
                        part D drugs in the year equal to the annual 
                        out-of-pocket threshold specified in section 
                        1860D-2(b)(4)(B).
            ``(2) Applicable drug.--The term `applicable drug' means, 
        with respect to an applicable beneficiary, a covered part D 
        drug--
                    ``(A) approved under a new drug application under 
                section 505(b) of the Federal Food, Drug, and Cosmetic 
                Act; and
                    ``(B)(i) if the PDP sponsor of the prescription 
                drug plan or the MA organization offering the MA-PD 
                plan uses a formulary, which is on the formulary of the 
                prescription drug plan or MA-PD plan that the 
                applicable beneficiary is enrolled in;
                    ``(ii) if the PDP sponsor of the prescription drug 
                plan or the MA organization offering the MA-PD plan 
                does not use a formulary, for which benefits are 
                available under the prescription drug plan or MA-PD 
                plan that the applicable beneficiary is enrolled in; or
                    ``(iii) is provided through an exception or appeal.
            ``(3) Applicable number of calendar days.--The term 
        `applicable number of calendar days' means--
                    ``(A) with respect to claims for reimbursement 
                submitted electronically, 14 days; and
                    ``(B) with respect to claims for reimbursement 
                submitted otherwise, 30 days.
            ``(4) Discounted price.--
                    ``(A) In general.--The term `discounted price' 
                means 50 percent of the negotiated price of the 
                applicable drug of a manufacturer.
                    ``(B) Clarification.--Nothing in this section shall 
                be construed as affecting the responsibility of an 
                applicable beneficiary for payment of a dispensing fee 
                for an applicable drug.
            ``(5) Manufacturer.--The term `manufacturer' means any 
        entity which is engaged in the production, preparation, 
        propagation, compounding, conversion, or processing of 
        prescription drug products, either directly or indirectly by 
        extraction from substances of natural origin, or independently 
        by means of chemical synthesis, or by a combination of 
        extraction and chemical synthesis. Such term does not include a 
        wholesale distributor of drugs or a retail pharmacy licensed 
        under State law.
            ``(6) Negotiated price.--The term `negotiated price' has 
        the meaning given such term in section 423.100 of title 42, 
        Code of Federal Regulations (as in effect on the date of 
        enactment of this section), except that such negotiated price 
        shall not include any dispensing fee for the applicable drug.
            ``(7) Qualified retiree prescription drug plan.--The term 
        `qualified retiree prescription drug plan' has the meaning 
        given such term in section 1860D-22(a)(2).''.
    (c) Inclusion in Incurred Costs.--
            (1) In general.--Section 1860D-2(b)(4) of the Social 
        Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
                    (A) in subparagraph (C), in the matter preceding 
                clause (i), by striking ``In applying'' and inserting 
                ``Except as provided in subparagraph (E), in 
                applying''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(E) Inclusion of costs of applicable drugs under 
                medicare prescription drug discount program.--In 
                applying subparagraph (A), incurred costs shall include 
                the negotiated price (as defined in paragraph (6) of 
                section 1860D-14A(g)) of an applicable drug (as defined 
                in paragraph (2) of such section) of a manufacturer) 
                that is furnished to an applicable beneficiary (as 
                defined in paragraph (1) of such section) under the 
                Medicare prescription drug discount program under 
                section 1860D-14A, regardless of whether part of such 
                costs were paid by a manufacturer under such 
                program.''.
            (2) Effective date.--The amendments made by this section 
        shall apply to costs incurred on or after July 1, 2010.
    (d) Conforming Amendment Permitting Prescription Drug Discounts.--
            (1) In general.--Section 1128B(b)(3) of the Social Security 
        Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (G);
                    (B) by striking ``1853(a)(4).'' at the end of the 
                first subparagraph (H) and inserting ``1853(a)(4);'';
                    (C) by redesignating the second subparagraph (H) as 
                subparagraph (I) and by striking the period at the end 
                and inserting ``; and''; and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(J) a discount in the price of an applicable drug 
                (as defined in paragraph (2) of section 1860D-14A(g)) 
                of a manufacturer) that is furnished to an applicable 
                beneficiary (as defined in paragraph (1) of such 
                section) under the Medicare prescription drug discount 
                program under section 1860D-14A.''.
            (2) Effective date.--The amendments made by this section 
        shall apply to drugs dispensed on or after July 1, 2010.

SEC. 3302. IMPROVEMENT IN DETERMINATION OF MEDICARE PART D LOW-INCOME 
              BENCHMARK PREMIUM.

    (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by 
inserting ``, determined without regard to any reduction in such 
premium as a result of any beneficiary rebate under section 
1854(b)(1)(C) or bonus payment under section 1853(n)'' before the 
period at the end.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to premiums for months beginning on or after January 1, 2011.

SEC. 3303. VOLUNTARY DE MINIMUS POLICY FOR SUBSIDY ELIGIBLE INDIVIDUALS 
              UNDER PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-14(a) of the Social Security Act (42 
U.S.C. 1395w-114(a)) is amended by adding at the end the following new 
paragraph:
            ``(5) Waiver of de minimus premiums.--The Secretary shall, 
        under procedures established by the Secretary, permit a 
        prescription drug plan or an MA-PD plan to waive the monthly 
        beneficiary premium for a subsidy eligible individual if the 
        amount of such premium is de minimus. If such premium is waived 
        under the plan, the Secretary shall not reassign subsidy 
        eligible individuals enrolled in the plan to other plans based 
        on the fact that the monthly beneficiary premium under the plan 
        was greater than the low-income benchmark premium amount.''.
    (b) Authorizing the Secretary to Auto-enroll Subsidy Eligible 
Individuals in Plans That Waive De Minimus Premiums.--Section 1860D-
1(b)(1) of the Social Security Act (42 U.S.C. 1395w-101(b)(1)) is 
amended--
            (1) in subparagraph (C), by inserting ``except as provided 
        in subparagraph (D),'' after ``shall include,''
            (2) by adding at the end the following new subparagraph:
                    ``(D) Special rule for plans that waive de minimus 
                premiums.--The process established under subparagraph 
                (A) may include, in the case of a part D eligible 
                individual who is a subsidy eligible individual (as 
                defined in section 1860D-14(a)(3)) who has failed to 
                enroll in a prescription drug plan or an MA-PD plan, 
                for the enrollment in a prescription drug plan or MA-PD 
                plan that has waived the monthly beneficiary premium 
                for such subsidy eligible individual under section 
                1860D-14(a)(5). If there is more than one such plan 
                available, the Secretary shall enroll such an 
                individual under the preceding sentence on a random 
                basis among all such plans in the PDP region. Nothing 
                in the previous sentence shall prevent such an 
                individual from declining or changing such 
                enrollment.''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to premiums for months, and enrollments for plan years, beginning 
on or after January 1, 2011.

SEC. 3304. SPECIAL RULE FOR WIDOWS AND WIDOWERS REGARDING ELIGIBILITY 
              FOR LOW-INCOME ASSISTANCE.

    (a) In General.--Section 1860D-14(a)(3)(B) of the Social Security 
Act (42 U.S.C. 1395w-114(a)(3)(B)) is amended by adding at the end the 
following new clause:
                            ``(vi) Special rule for widows and 
                        widowers.--Notwithstanding the preceding 
                        provisions of this subparagraph, in the case of 
                        an individual whose spouse dies during the 
                        effective period for a determination or 
                        redetermination that has been made under this 
                        subparagraph, such effective period shall be 
                        extended through the date that is 1 year after 
                        the date on which the determination or 
                        redetermination would (but for the application 
                        of this clause) otherwise cease to be 
                        effective.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2011.

SEC. 3305. IMPROVED INFORMATION FOR SUBSIDY ELIGIBLE INDIVIDUALS 
              REASSIGNED TO PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    Section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-114) 
is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Facilitation of Reassignments.--Beginning not later than 
January 1, 2011, the Secretary shall, in the case of a subsidy eligible 
individual who is enrolled in one prescription drug plan and is 
subsequently reassigned by the Secretary to a new prescription drug 
plan, provide the individual, within 30 days of such reassignment, 
with--
            ``(1) information on formulary differences between the 
        individual's former plan and the plan to which the individual 
        is reassigned with respect to the individual's drug regimens; 
        and
            ``(2) a description of the individual's right to request a 
        coverage determination, exception, or reconsideration under 
        section 1860D-4(g), bring an appeal under section 1860D-4(h), 
        or resolve a grievance under section 1860D-4(f).''.

SEC. 3306. FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME PROGRAMS.

    (a) Additional Funding for State Health Insurance Programs.--
Subsection (a)(1)(B) of section 119 of the Medicare Improvements for 
Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note) is amended 
by striking ``(42 U.S.C. 1395w-23(f))'' and all that follows through 
the period at the end and inserting ``(42 U.S.C. 1395w-23(f)), to the 
Centers for Medicare & Medicaid Services Program Management Account--
                            ``(i) for fiscal year 2009, of $7,500,000; 
                        and
                            ``(ii) for the period of fiscal years 2010 
                        through 2012, of $15,000,000.
                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.
    (b) Additional Funding for Area Agencies on Aging.--Subsection 
(b)(1)(B) of such section 119 is amended by striking ``(42 U.S.C. 
1395w-23(f))'' and all that follows through the period at the end and 
inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on Aging--
                            ``(i) for fiscal year 2009, of $7,500,000; 
                        and
                            ``(ii) for the period of fiscal years 2010 
                        through 2012, of $15,000,000.
                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.
    (c) Additional Funding for Aging and Disability Resource Centers.--
Subsection (c)(1)(B) of such section 119 is amended by striking ``(42 
U.S.C. 1395w-23(f))'' and all that follows through the period at the 
end and inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on 
Aging--
                            ``(i) for fiscal year 2009, of $5,000,000; 
                        and
                            ``(ii) for the period of fiscal years 2010 
                        through 2012, of $10,000,000.
                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.
    (d) Additional Funding for Contract With the National Center for 
Benefits and Outreach Enrollment.--Subsection (d)(2) of such section 
119 is amended by striking ``(42 U.S.C. 1395w-23(f))'' and all that 
follows through the period at the end and inserting ``(42 U.S.C. 1395w-
23(f)), to the Administration on Aging--
                            ``(i) for fiscal year 2009, of $5,000,000; 
                        and
                            ``(ii) for the period of fiscal years 2010 
                        through 2012, of $5,000,000.
                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.
    (e) Secretarial Authority to Enlist Support in Conducting Certain 
Outreach Activities.--Such section 119 is amended by adding at the end 
the following new subsection:
    ``(g) Secretarial Authority to Enlist Support in Conducting Certain 
Outreach Activities.--The Secretary may request that an entity awarded 
a grant under this section support the conduct of outreach activities 
aimed at preventing disease and promoting wellness. Notwithstanding any 
other provision of this section, an entity may use a grant awarded 
under this subsection to support the conduct of activities described in 
the preceding sentence.''.

SEC. 3307. IMPROVING FORMULARY REQUIREMENTS FOR PRESCRIPTION DRUG PLANS 
              AND MA-PD PLANS WITH RESPECT TO CERTAIN CATEGORIES OR 
              CLASSES OF DRUGS.

    (a) Improving Formulary Requirements.--Section 1860D-4(b)(3)(G) of 
the Social Security Act is amended to read as follows:
                    ``(G) Required inclusion of drugs in certain 
                categories and classes.--
                            ``(i) Formulary requirements.--
                                    ``(I) In general.--Subject to 
                                subclause (II), a PDP sponsor offering 
                                a prescription drug plan shall be 
                                required to include all covered part D 
                                drugs in the categories and classes 
                                identified by the Secretary under 
                                clause (ii)(I)
                                    ``(II) Exceptions.--The Secretary 
                                may establish exceptions that permit a 
                                PDP sponsor offering a prescription 
                                drug plan to exclude from its formulary 
                                a particular covered part D drug in a 
                                category or class that is otherwise 
                                required to be included in the 
                                formulary under subclause (I) (or to 
                                otherwise limit access to such a drug, 
                                including through prior authorization 
                                or utilization management).
                            ``(ii) Identification of drugs in certain 
                        categories and classes.--
                                    ``(I) In general.--Subject to 
                                clause (iv), the Secretary shall 
                                identify, as appropriate, categories 
                                and classes of drugs for which the 
                                Secretary determines are of clinical 
                                concern.
                                    ``(II) Criteria.--The Secretary 
                                shall use criteria established by the 
                                Secretary in making any determination 
                                under subclause (I).
                            ``(iii) Implementation.--The Secretary 
                        shall establish the criteria under clause 
                        (ii)(II) and any exceptions under clause 
                        (i)(II) through the promulgation of a 
                        regulation which includes a public notice and 
                        comment period.
                            ``(iv) Requirement for certain categories 
                        and classes until criteria established.--Until 
                        such time as the Secretary establishes the 
                        criteria under clause (ii)(II) the following 
                        categories and classes of drugs shall be 
                        identified under clause (ii)(I):
                                    ``(I) Anticonvulsants.
                                    ``(II) Antidepressants.
                                    ``(III) Antineoplastics.
                                    ``(IV) Antipsychotics.
                                    ``(V) Antiretrovirals.
                                    ``(VI) Immunosuppressants for the 
                                treatment of transplant rejection.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan year 2011 and subsequent plan years.

SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR HIGH-INCOME 
              BENEFICIARIES.

    (a) Income-related Increase in Part D Premium.--
            (1) In general.--Section 1860D-13(a) of the Social Security 
        Act (42 U.S.C. 1395w-113(a)) is amended by adding at the end 
        the following new paragraph:
            ``(7) Increase in base beneficiary premium based on 
        income.--
                    ``(A) In general.--In the case of an individual 
                whose modified adjusted gross income exceeds the 
                threshold amount applicable under paragraph (2) of 
                section 1839(i) (including application of paragraph (5) 
                of such section) for the calendar year, the monthly 
                amount of the beneficiary premium applicable under this 
                section for a month after December 2010 shall be 
                increased by the monthly adjustment amount specified in 
                subparagraph (B).
                    ``(B) Monthly adjustment amount.--The monthly 
                adjustment amount specified in this subparagraph for an 
                individual for a month in a year is equal to the 
                product of--
                            ``(i) the quotient obtained by dividing--
                                    ``(I) the applicable percentage 
                                determined under paragraph (3)(C) of 
                                section 1839(i) (including application 
                                of paragraph (5) of such section) for 
                                the individual for the calendar year 
                                reduced by 25.5 percent; by
                                    ``(II) 25.5 percent; and
                            ``(ii) the base beneficiary premium (as 
                        computed under paragraph (2)).
                    ``(C) Modified adjusted gross income.--For purposes 
                of this paragraph, the term `modified adjusted gross 
                income' has the meaning given such term in subparagraph 
                (A) of section 1839(i)(4), determined for the taxable 
                year applicable under subparagraphs (B) and (C) of such 
                section.
                    ``(D) Determination by commissioner of social 
                security.--The Commissioner of Social Security shall 
                make any determination necessary to carry out the 
                income-related increase in the base beneficiary premium 
                under this paragraph.
                    ``(E) Procedures to assure correct income-related 
                increase in base beneficiary premium.--
                            ``(i) Disclosure of base beneficiary 
                        premium.--Not later than September 15 of each 
                        year beginning with 2010, the Secretary shall 
                        disclose to the Commissioner of Social Security 
                        the amount of the base beneficiary premium (as 
                        computed under paragraph (2)) for the purpose 
                        of carrying out the income-related increase in 
                        the base beneficiary premium under this 
                        paragraph with respect to the following year.
                            ``(ii) Additional disclosure.--Not later 
                        than October 15 of each year beginning with 
                        2010, the Secretary shall disclose to the 
                        Commissioner of Social Security the following 
                        information for the purpose of carrying out the 
                        income-related increase in the base beneficiary 
                        premium under this paragraph with respect to 
                        the following year:
                                    ``(I) The modified adjusted gross 
                                income threshold applicable under 
                                paragraph (2) of section 1839(i) 
                                (including application of paragraph (5) 
                                of such section).
                                    ``(II) The applicable percentage 
                                determined under paragraph (3)(C) of 
                                section 1839(i) (including application 
                                of paragraph (5) of such section).
                                    ``(III) The monthly adjustment 
                                amount specified in subparagraph (B).
                                    ``(IV) Any other information the 
                                Commissioner of Social Security 
                                determines necessary to carry out the 
                                income-related increase in the base 
                                beneficiary premium under this 
                                paragraph.
                    ``(F) Rule of construction.--The formula used to 
                determine the monthly adjustment amount specified under 
                subparagraph (B) shall only be used for the purpose of 
                determining such monthly adjustment amount under such 
                subparagraph.''.
            (2) Collection of monthly adjustment amount.--Section 
        1860D-13(c) of the Social Security Act (42 U.S.C. 1395w-113(c)) 
        is amended--
                    (A) in paragraph (1), by striking ``(2) and (3)'' 
                and inserting ``(2), (3), and (4)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Collection of monthly adjustment amount.--
                    ``(A) In general.--Notwithstanding any provision of 
                this subsection or section 1854(d)(2), subject to 
                subparagraph (B), the amount of the income-related 
                increase in the base beneficiary premium for an 
                individual for a month (as determined under subsection 
                (a)(7)) shall be paid through withholding from benefit 
                payments in the manner provided under section 1840.
                    ``(B) Agreements.--In the case where the monthly 
                benefit payments of an individual that are withheld 
                under subparagraph (A) are insufficient to pay the 
                amount described in such subparagraph, the Commissioner 
                of Social Security shall enter into agreements with the 
                Secretary, the Director of the Office of Personnel 
                Management, and the Railroad Retirement Board as 
                necessary in order to allow other agencies to collect 
                the amount described in subparagraph (A) that was not 
                withheld under such subparagraph.''.
    (b) Conforming Amendments.--
            (1) Medicare.--Section 1860D-13(a)(1) of the Social 
        Security Act (42 U.S.C. 1395w-113(a)(1)) is amended--
                    (A) by redesignating subparagraph (F) as 
                subparagraph (G);
                    (B) in subparagraph (G), as redesignated by 
                subparagraph (A), by striking ``(D) and (E)'' and 
                inserting ``(D), (E), and (F)''; and
                    (C) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) Increase based on income.--The monthly 
                beneficiary premium shall be increased pursuant to 
                paragraph (7).''.
            (2) Internal revenue code.--Section 6103(l)(20) of the 
        Internal Revenue Code of 1986 (relating to disclosure of return 
        information to carry out Medicare part B premium subsidy 
        adjustment) is amended--
                    (A) in the heading, by inserting ``and part d base 
                beneficiary premium increase'' and inserting ``part b 
                premium subsidy adjustment'';
                    (B) in subparagraph (A)--
                            (i) in the matter preceding clause (i), by 
                        inserting ``or increase under section 1860D-
                        13(a)(7)'' after ``1839(i)''; and
                            (ii) in clause (vii), by inserting after 
                        ``subsection (i) of such section'' the 
                        following: ``or increase under section 1860D-
                        13(a)(7) of such Act''; and
                    (C) in subparagraph (B)--
                            (i) by striking ``Return information'' and 
                        inserting the following:
                            ``(i) In general.--Return information'';
                            (ii) by inserting ``or increase under such 
                        section 1860D-13(a)(7)'' before the period at 
                        the end;
                            (iii) as amended by clause (i), by 
                        inserting ``or for the purpose of resolving 
                        taxpayer appeals with respect to any such 
                        premium adjustment or increase'' before the 
                        period at the end; and
                            (iv) by adding at the end the following new 
                        clause:
                            ``(ii) Disclosure to other agencies.--
                        Officers, employees, and contractors of the 
                        Social Security Administration may disclose--
                                    ``(I) the taxpayer identity 
                                information and the amount of the 
                                premium subsidy adjustment or premium 
                                increase with respect to a taxpayer 
                                described in subparagraph (A) to 
                                officers, employees, and contractors of 
                                the Centers for Medicare and Medicaid 
                                Services, to the extent that such 
                                disclosure is necessary for the 
                                collection of the premium subsidy 
                                amount or the increased premium amount,
                                    ``(II) the taxpayer identity 
                                information and the amount of the 
                                premium subsidy adjustment or the 
                                increased premium amount with respect 
                                to a taxpayer described in subparagraph 
                                (A) to officers and employees of the 
                                Office of Personnel Management and the 
                                Railroad Retirement Board, to the 
                                extent that such disclosure is 
                                necessary for the collection of the 
                                premium subsidy amount or the increased 
                                premium amount,
                                    ``(III) return information with 
                                respect to a taxpayer described in 
                                subparagraph (A) to officers and 
                                employees of the Department of Health 
                                and Human Services to the extent 
                                necessary to resolve administrative 
                                appeals of such premium subsidy 
                                adjustment or increased premium, and
                                    ``(IV) return information with 
                                respect to a taxpayer described in 
                                subparagraph (A) to officers and 
                                employees of the Department of Justice 
                                for use in judicial proceedings to the 
                                extent necessary to carry out the 
                                purposes described in clause (i).''.

SEC. 3309. SIMPLIFICATION OF PLAN INFORMATION.

    (a) Prescription Drug Plans.--Section 1860D-1(c) of the Social 
Security Act (42 U.S.C. 1395w-101(c)) is amended by adding at the end 
the following new paragraph:
            ``(5) Categorization of plans.--
                    ``(A) In general.--The Secretary shall do the 
                following:
                            ``(i) Establish 2 or more categories of 
                        prescription drug plans offered by PDP sponsors 
                        and MA-PD plans offered by Medicare Advantage 
                        organizations based on the actuarial value or 
                        range of values of the prescription drug 
                        benefits, including supplemental prescription 
                        drug coverage, provided under the plans as of 
                        the date of enactment of this subsection.
                            ``(ii) Develop standardized nomenclature, 
                        definitions, and language to describe the 
                        prescription drug benefits provided under the 
                        plans in each such category.
                            ``(iii) Ensure that the Medicare 
                        Prescription Drug Plan Finder on the Internet 
                        website of the Department of Health and Human 
                        Services includes the plan name under 
                        subparagraph (B).
                            ``(iv) In establishing categories of 
                        prescription drug plans and MA-PD plans under 
                        clause (i), the Secretary shall ensure that 
                        there is a meaningful difference between the 
                        actuarial value of prescription drug benefits 
                        provided under the plans in different 
                        categories.
                    ``(B) Required inclusion of category in plan name 
                and marketing materials.--For plan years beginning on 
                or after January 1, 2011, a PDP sponsor shall ensure 
                that the name of each prescription drug plan offered by 
                the PDP sponsor and any marketing materials with 
                respect to such plan include the category of the plan, 
                as determined under subparagraph (A) (using 
                standardized nomenclature, definitions, and language 
                developed by the Secretary under such subparagraph).''.
    (b) MA-PD Plans.--Section 1856(f)(3) of the Social Security Act (42 
U.S.C. 1395w-26(f)(3)) is amended by adding at the end the following 
new subparagraph:
                    ``(D) Required inclusion of category in plan name 
                and marketing materials.--Section 1860D-1(c)(5)(B).''.

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.

    (a) Limitation on Removal or Change.--Section 1860D-4(b)(3)(E) of 
the Social Security Act (42 U.S.C. 1395w-104(b)(3)(E)) is amended to 
read as follows:
                    ``(E) Removing or changing a drug on a formulary.--
                            ``(i) Limitation.--Subject to clause (ii), 
                        with respect to plan years beginning on or 
                        after January 1, 2011, the PDP sponsor of a 
                        prescription drug plan may not remove a covered 
                        part D drug from the plan formulary, apply a 
                        cost or utilization management tool that 
                        imposes a restriction or limitation on the 
                        coverage of such a drug (such as through the 
                        application of a preferred status, usage 
                        restriction, step therapy, prior authorization, 
                        or quantity limitation), or increase the cost-
                        sharing of such a drug (such as through 
                        placement of a drug on a tier that would result 
                        in higher cost-sharing for a beneficiary) other 
                        than on a date specified by the Secretary (but 
                        not later than the date on which PDP sponsors 
                        begin marketing their plans with respect to the 
                        immediately succeeding plan year).
                            ``(ii) Exceptions to limitation on 
                        removal.--Subject to clause (iii), clause (i) 
                        shall not apply with respect to a covered part 
                        D drug that--
                                    ``(I) is a brand name drug for 
                                which there is a generic drug approved 
                                under section 505(j) of the Food and 
                                Drug Cosmetic Act that is placed on the 
                                market during the period in which there 
                                are limitations on removal or change in 
                                the formulary under clause (i);
                                    ``(II) is a drug for which the 
                                Commissioner of Food and Drugs issues a 
                                safety warning that would impose a 
                                restriction on the drug or require a 
                                drug label warning during the plan 
                                year;
                                    ``(III) is a drug that the Pharmacy 
                                and Therapeutic Committee of the plan 
                                determines, based directly on evidence 
                                from peer-reviewed research, has a 
                                lower safety profile than is 
                                appropriate or is ineffective; or
                                    ``(IV) for which the Secretary 
                                establishes a specific exception 
                                through the promulgation of regulations 
                                relating to plan formularies.
                            ``(iii) Limited application of exceptions 
                        to drugs in certain categories and classes.--
                        Subclauses (I), (III), and (IV) of clause (ii) 
                        shall not apply to a drug in a category or 
                        class identified under subparagraph (G)(i).
                            ``(iv) Notice of removal under application 
                        of exception to limitation.--The PDP sponsor of 
                        a prescription drug plan shall provide 
                        appropriate notice (such as under subsection 
                        (a)(3) and including the annual notice under 
                        subsection (a)(5)) of any removal or change 
                        under clause (ii) to the Secretary, affected 
                        enrollees, physicians, pharmacies, and 
                        pharmacists.''.
    (b) Notice for Change in Formulary and Other Restrictions or 
Limitations on Coverage.--
            (1) In general.--Section 1860D-4(a) of the Social Security 
        Act (42 U.S.C. 1395w-104(a)) is amended by adding at the end 
        the following new paragraph:
            ``(5) Annual notice of changes in formulary and other 
        restrictions or limitations on coverage.--Each PDP sponsor of a 
        prescription drug plan shall furnish to each enrollee at the 
        time of each annual coordinated election period (referred to in 
        section 1860D-1(b)(1)(B)(iii)) for a plan year a notice of any 
        changes in the formulary or other restrictions or limitations 
        on coverage of any covered part D drug under the plan that will 
        take effect for the plan year.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to annual coordinated election periods beginning on 
        or after January 1, 2010.

SEC. 3311. ELIMINATION OF COST SHARING FOR CERTAIN DUAL ELIGIBLE 
              INDIVIDUALS.

    Section 1860D-14(a)(1)(D)(i) of the Social Security Act (42 U.S.C. 
1395w-114(a)(1)(D)(i)) is amended by inserting ``or, effective on a 
date specified by the Secretary (but in no case earlier than January 1, 
2012), who would be such an institutionalized individual or couple, if 
the full-benefit dual eligible individual were not receiving services 
under a home and community-based waiver authorized for a State under 
section 1115 or subsection (c) or (d) of section 1915 or under a State 
plan amendment under subsection (i) of such section or services 
provided through enrollment in a medicaid managed care organization'' 
after ``1902(q)(1)(B))''.

SEC. 3312. REDUCING WASTEFUL DISPENSING OF OUTPATIENT PRESCRIPTION 
              DRUGS IN LONG-TERM CARE FACILITIES UNDER PRESCRIPTION 
              DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(c) of the Social Security Act (42 
U.S.C. 1395w-104(c)) is amended by adding at the end the following new 
paragraph:
            ``(3) Reducing wasteful dispensing of outpatient 
        prescription drugs in long-term care facilities.--The Secretary 
        shall require PDP sponsors of prescription drug plans to 
        utilize specific drug dispensing techniques, as determined by 
        the Secretary, such as weekly, daily, or automated dose 
        dispensing, when dispensing medications to enrollees who reside 
        in a long-term care facility in order to reduce waste 
        associated with 30-day fills.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning on or after January 1, 2012.

SEC. 3313. IMPROVED MEDICARE PRESCRIPTION DRUG PLAN AND MA-PD PLAN 
              COMPLAINT SYSTEM.

    (a) Plan Complaint System.--
            (1) In general.--The Secretary shall develop and maintain a 
        compliant system to collect and maintain information on MA-PD 
        plan and prescription drug plan complaints that are received 
        (including by telephone, letter, e-mail, or any other means) by 
        the Secretary (including by a regional office of the Department 
        of Health and Human Services, the Medicare Beneficiary 
        Ombudsman, a sub-contractor, a carrier, a fiscal intermediary, 
        and a Medicare administrative contractor under section 1874A of 
        the Social Security Act (42 U.S.C. 1395kk)) through the date on 
        which the compliant is resolved.
            (2) Model electronic complaint form.--The Secretary shall 
        develop a model electronic complaint form to be used for 
        reporting plan complaints under the system. Such form shall be 
        prominently displayed on the front page of the Medicare.gov 
        Internet website and on the Internet website of the Medicare 
        Beneficiary Ombudsman.
            (3) Annual reports by the secretary.--The Secretary shall 
        submit to Congress an annual report on the system. Such study 
        shall include an analysis of the number and types of complaints 
        reported in the system, geographic variations in such 
        complaints, the timeliness of agency or plan responses to such 
        complaints, and the resolution of such complaints.
            (4) Definitions.--In this section:
                    (A) MA-PD plan.--The term ``MA-PD plan'' has the 
                meaning given such term in section 1860D-41(a)(9) of 
                such Act (42 U.S.C. 1395w-151(a)(9)).
                    (B) Prescription drug plan.--The term 
                ``prescription drug plan'' has the meaning given such 
                term in section 1860D-41(a)(14) of such Act (42 U.S.C. 
                1395w-151(a)(14)).
                    (C) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (D) System.--The term ``system'' means the plan 
                complaint system developed and maintained under 
                paragraph (1).
    (b) Funding.--There are authorized to be appropriated such sums as 
may be necessary for the costs of carrying out this section.

SEC. 3314. UNIFORM EXCEPTIONS AND APPEALS PROCESS FOR PRESCRIPTION DRUG 
              PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(b)(3) of the Social Security Act 
(42 U.S.C. 1395w-104(b)(3)) is amended by adding at the end the 
following new subparagraph:
                    ``(H) Use of single, uniform exceptions and appeals 
                process.--Notwithstanding any other provision of this 
                part, each PDP sponsor of a prescription drug plan 
                shall, to the extent the Secretary determines 
                feasible--
                            ``(i) use a single, uniform exceptions and 
                        appeals process (including a single, uniform 
                        model form for use under such process) with 
                        respect to the determination of prescription 
                        drug coverage for an enrollee under the plan; 
                        and
                            ``(ii) provide instant access to such 
                        process by enrollees through a toll-free 
                        telephone number and an Internet website.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to exceptions and appeals on or after January 1, 2012.

SEC. 3315. OFFICE OF THE INSPECTOR GENERAL STUDIES AND REPORTS.

    (a) Study and Annual Report on Part D Formularies' Inclusion of 
Drugs Commonly Used by Dual Eligibles.--
            (1) Study.--The Inspector General of the Department of 
        Health and Human Services shall conduct a study of the extent 
        to which formularies used by prescription drug plans and MA-PD 
        plans under part D include drugs commonly used by full-benefit 
        dual eligible individuals (as defined in section 1935(c)(6) of 
        the Social Security Act (42 U.S.C. 1396u-5(c)(6))).
            (2) Annual reports.--Not later than July 1 of each year 
        (beginning with 2011), the Inspector General shall submit to 
        Congress a report on the study conducted under paragraph (1), 
        together with such recommendations as the Inspector General 
        determines appropriate.
    (b) Study and Report on Prescription Drug Prices Under Medicare 
Part D and Medicaid.--
            (1) Study.--
                    (A) In general.--The Inspector General of the 
                Department of Health and Human Services shall conduct a 
                study on prices for covered part D drugs under the 
                Medicare prescription drug program under part D of 
                title XVIII of the Social Security Act and for covered 
                outpatient drugs under title XIX. Such study shall 
                include the following:
                            (i) A comparison, with respect to the 200 
                        most frequently dispensed covered part D drugs 
                        under such program and covered outpatient drugs 
                        under such title (as determined by the 
                        Inspector General based on volume and 
                        expenditures), of--
                                    (I) the prices paid for covered 
                                part D drugs by PDP sponsors of 
                                prescription drug plans and Medicare 
                                Advantage organizations offering MA-PD 
                                plans; and
                                    (II) the prices paid for covered 
                                outpatient drugs by a State plan under 
                                title XIX.
                            (ii) An assessment of--
                                    (I) the financial impact of any 
                                discrepancies in such prices on the 
                                Federal government; and
                                    (II) the financial impact of any 
                                such discrepancies on enrollees under 
                                part D or individuals eligible for 
                                medical assistance under a State plan 
                                under title XIX.
                    (B) Price.--For purposes of subparagraph (A), the 
                price of a covered part D drug or a covered outpatient 
                drug shall include any rebate or discount under such 
                program or such title, respectively, including any 
                negotiated price concession described in section 1860D-
                2(d)(1)(B) of the Social Security Act (42 U.S.C. 1395w-
                102(d)(1)(B)) or rebate under an agreement under 
                section 1927 of the Social Security Act (42 U.S.C. 
                1396r-8).
                    (C) Authority to collect any necessary 
                information.--Notwithstanding any other provision of 
                law, the Inspector General of the Department of Health 
                and Human Services shall be able to collect any 
                information related to the prices of covered part D 
                drugs under such program and covered outpatient drugs 
                under such title XIX necessary to carry out the 
                comparison under subparagraph (A).
            (2) Report.--
                    (A) In general.--Not later than October 1, 2011, 
                subject to subparagraph (B), the Inspector General 
                shall submit to Congress a report containing the 
                results of the study conducted under paragraph (1), 
                together with recommendations for such legislation and 
                administrative action as the Inspector General 
                determines appropriate.
                    (B) Limitation on information contained in 
                report.--The report submitted under subparagraph (A) 
                shall not include any information that the Inspector 
                General determines is proprietary or is likely to 
                negatively impact the ability of a PDP sponsor or a 
                State plan under title XIX to negotiate prices for 
                covered part D drugs or covered outpatient drugs, 
                respectively.
            (3) Definitions.--In this section:
                    (A) Covered part d drug.--The term ``covered part D 
                drug'' has the meaning given such term in section 
                1860D-2(e) of the Social Security Act (42 U.S.C. 1395w-
                102(e)).
                    (B) Covered outpatient drug.--The term ``covered 
                outpatient drug'' has the meaning given such term in 
                section 1927(k) of such Act (42 U.S.C. 1396r(k)).
                    (C) MA-PD plan.--The term ``MA-PD plan'' has the 
                meaning given such term in section 1860D-41(a)(9) of 
                such Act (42 U.S.C. 1395w-151(a)(9)).
                    (D) Medicare advantage organization.--The term 
                ``Medicare Advantage organization'' has the meaning 
                given such term in section 1859(a)(1) of such Act (42 
                U.S.C. 1395w-28)(a)(1)).
                    (E) PDP sponsor.--The term ``PDP sponsor'' has the 
                meaning given such term in section 1860D-41(a)(13) of 
                such Act (42 U.S.C. 1395w-151(a)(13)).
                    (F) Prescription drug plan.--The term 
                ``prescription drug plan'' has the meaning given such 
                term in section 1860D-41(a)(14) of such Act (42 U.S.C. 
                1395w-151(a)(14)).

SEC. 3316. HHS STUDY AND ANNUAL REPORTS ON COVERAGE FOR DUAL ELIGIBLES.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a study to track--
                    (A) how many of the new full benefit dual eligible 
                individuals (as defined in section 1935(c)(6) of the 
                Social Security Act (42 U.S.C. 1395u-5(c)(6))) enroll 
                in a plan under part D of title XVIII of such Act and 
                receive retroactive prescription drug coverage under 
                the plan; and
                    (B) if such retroactive coverage is provided to 
                such individuals--
                            (i) the number of months of coverage 
                        provided; and
                            (ii) the amount of reimbursements to 
                        individuals and to individuals that made 
                        payments for prescription drugs on their behalf 
                        for costs incurred during retroactive coverage 
                        periods.
            (2) Data to use.--In conducting the study with respect to 
        the requirements under paragraph (1)(B), the Secretary shall 
        examine prescription drug utilization data reported by 
        prescription drug plans under part D of title XVIII of the 
        Social Security Act (42 U.S.C. 1395w-101 et seq.).
    (b) Annual Reports on Ongoing Study.--Not later than January 1 of 
each year (beginning with 2012), the Secretary shall submit a report to 
Congress containing the results of the study conducted under subsection 
(a), together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate.
    (c) Annual Reports on Spending and Outcomes.--Not later than 
January 1 of each year (beginning with 2013), the Secretary shall 
collect data and submit a report to Congress that includes the 
following information:
            (1) Annual total expenditures (disaggregated by Federal and 
        State expenditures) for dually eligible beneficiaries under 
        title XVIII and under State plans and waivers under title XIX.
            (2) An analysis of health outcomes for dually eligible 
        beneficiaries, disaggregated by subtypes of beneficiaries (as 
        determined by the Secretary).
            (3) An analysis of the extent to which dually eligible 
        beneficiaries are able to access benefits under title XVIII and 
        under State plans and waivers under title XIX.

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.

    (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security 
Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by striking ``such costs shall be treated as 
                incurred only if'' and inserting ``subject to clause 
                (iii), such costs shall be treated as incurred only 
                if'';
                    (B) by striking ``, under section 1860D-14, or 
                under a State Pharmaceutical Assistance Program''; and
                    (C) by striking the period at the end and inserting 
                ``; and''; and
            (3) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) such costs shall be treated as 
                        incurred and shall not be considered to be 
                        reimbursed under clause (ii) if such costs are 
                        borne or paid--
                                    ``(I) under section 1860D-14;
                                    ``(II) under a State Pharmaceutical 
                                Assistance Program;
                                    ``(III) by the Indian Health 
                                Service, an Indian tribe or tribal 
                                organization, or an urban Indian 
                                organization (as defined in section 4 
                                of the Indian Health Care Improvement 
                                Act); or
                                    ``(IV) under an AIDS Drug 
                                Assistance Program under part B of 
                                title XXVI of the Public Health Service 
                                Act.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to costs incurred on or after January 1, 2011.

              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.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
            (1) in clause (i)--
                    (A) in subclause (XIX), by striking ``and'' at the 
                end;
                    (B) in subclause (XX)--
                            (i) by striking ``for each subsequent 
                        fiscal year'' and inserting ``for each of 
                        fiscal years 2007 through 2009''; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon; and
                            (iii) by adding at the end the following 
                        new subclauses:
                                    ``(XXI) for each of fiscal years 
                                2010 through 2019, subject to clause 
                                (viii), the market basket percentage 
                                increase for hospitals in all areas 
                                minus the additional adjustment factor 
                                described in clause (x); and
                                    ``(XXII) for each subsequent fiscal 
                                year, subject to clause (viii), the 
                                market basket percentage increase for 
                                hospitals in all areas.'';
            (2) in clause (iii)--
                    (A) by striking ``(iii) For purposes of this 
                subparagraph,'' and inserting ``(iii)(I) For purposes 
                of this subparagraph,'';
                    (B) in subclause (I), as added by subparagraph (A), 
                by adding at the end the following new sentences: ``For 
                2012 and each subsequent fiscal year, such increase 
                shall be reduced by the productivity adjustment 
                described in subclause (II). Except as otherwise 
                provided, any reference to the increase described in 
                this clause shall be a reference to the percentage 
                increase described in this subclause minus the 
                percentage change described subclause (II).''
                    (C) by adding at the end the following new 
                subclause:
    ``(II) The productivity adjustment described in this subclause, 
with respect to an increase or change for a fiscal year or year or cost 
reporting period, or other annual period, is a productivity adjustment 
equal to the 10-year moving average of changes in annual economy-wide 
private nonfarm business multi-factor productivity (as projected by the 
Secretary for the applicable fiscal year, year, cost reporting period, 
or other annual period).''; and
                    (D) by adding at the end the following new clauses:
    ``(x) For purposes of clause (i)(XXI), the additional adjustment 
factor described in this clause is--
            ``(I) for each of fiscal years 2010 and 2011, 0.25 percent; 
        and
            ``(II) subject to clause (xi), for each of fiscal years 
        2012 through 2019, 0.2 percent.
    ``(xi) If, for each of fiscal years 2014 through 2019, the total 
percentage of the non-elderly insured population for the preceding 
fiscal year is greater than 5 percentage points below the projection of 
the total percentage of the non-elderly insured population for such 
preceding fiscal year (as of the date of enactment of the America's 
Healthy Future Act of 2009), as estimated by the Secretary, the 
additional adjustment factor described in clause (x) for the fiscal 
year shall be 0.0 percent.''.
    (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of the 
Social Security Act (42 U.S.C. 1395yy(e)(4)) is amended by adding at 
the end the following new sentence: ``For fiscal year 2012 and each 
subsequent fiscal year, the percentage described in the preceding 
sentence shall be reduced by the productivity adjustment described in 
section 1886(b)(3)(B)(iii)(II).''.
    (c) Long-term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the 
following new paragraphs:
            ``(3) Implementation for rate year 2010 and subsequent 
        years.--In implementing the system described in paragraph (1) 
        for rate year 2010 and each subsequent rate year, to the extent 
        that an annual percentage increase factor applies to a standard 
        Federal rate for discharges for the hospital during the rate 
        year, the following shall apply:
                    ``(A) Update for rate years 2010 through 2019.--For 
                discharges occurring during each of rate years 2010 
                through 2019, the standard Federal rate for such 
                discharges for the hospital shall be increased by the 
                annual percentage increase factor minus the additional 
                adjustment factor described in paragraph (4).
                    ``(B) Productivity adjustment.--For discharges 
                occurring during rate year 2012 and each subsequent 
                rate year, such annual percentage increase factor shall 
                be reduced by the productivity adjustment described in 
                section 1886(b)(3)(B)(iii)(II).
            ``(4) Additional adjustment factor described.--
                    ``(A) In general.--For purposes of paragraph 
                (3)(A), the additional adjustment factor described in 
                this paragraph is--
                            ``(i) for each of rate years 2010 and 2011, 
                        0.25 percent; and
                            ``(ii) subject to subparagraph (B), for 
                        each of rate years 2012 through 2019, 0.2 
                        percent.
                    ``(B) Reduction of adjustment factor for certain 
                hospitals.--If, for each of rate years 2014 through 
                2019, the total percentage of the non-elderly insured 
                population for the preceding rate year is greater than 
                5 percentage points below the projection of the total 
                percentage of the non-elderly insured population for 
                such preceding rate year (as of the date of enactment 
                of the America's Healthy Future Act of 2009), as 
                estimated by the Secretary, the additional adjustment 
                factor described in subparagraph (A) for the rate year 
                shall be 0.0 percent.''.
    (d) Inpatient Rehabilitation Facilities.--Section 1886(j)(3) of the 
Social Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended--
            (1) in subparagraph (A)(i), by inserting ``(for fiscal 
        years before 2010 and for fiscal year 2020 and subsequent 
        fiscal years)'' after ``2000 and'';
            (2) in subparagraph (C), by adding at the end the following 
        new sentence: ``For fiscal year 2012 and each subsequent fiscal 
        year, the appropriate percentage increase described in the 
        preceding sentence shall be reduced by the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II)).''; and
            (3) by adding at the end the following new subparagraph:
                    ``(D) Update for fiscal years 2010 through 2019.--
                            ``(i) In general.--For purposes of this 
                        subsection for payment units in each of fiscal 
                        years 2010 through 2019, the payment rate 
                        determined under this paragraph shall be 
                        increased by the increase factor described in 
                        subparagraph (C) minus the additional 
                        adjustment factor described in clause (ii).
                            ``(ii) Additional adjustment factor 
                        described.--For purposes of clause (i), the 
                        additional adjustment factor described in this 
                        clause is--
                                    ``(I) for each of fiscal years 2010 
                                and 2011, 0.25 percent; and
                                    ``(II) subject to clause (iii), for 
                                each of fiscal years 2012 through 2019, 
                                0.2 percent.
                            ``(iii) Reduction of adjustment factor for 
                        certain rehabilitation facilities.--If, for 
                        each of fiscal years 2014 through 2019, the 
                        total percentage of the non-elderly insured 
                        population for the preceding fiscal year is 
                        greater than 5 percentage points below the 
                        projection of the total percentage of the non-
                        elderly insured population for such preceding 
                        fiscal year (as of the date of enactment of the 
                        America's Healthy Future Act of 2009), as 
                        estimated by the Secretary, the additional 
                        adjustment factor described in clause (ii) for 
                        the fiscal year shall be 0.0 percent.''.
    (e) Home Health Agencies.--Section 1895(b)(3) of the Social 
Security Act (42 U.S.C. 1395fff(b)(3)) is amended--
            (1) in subparagraph (B)--
                    (A) in clause (ii)--
                            (i) in subclause (IV), by striking ``and'';
                            (ii) in subclause (V)--
                                    (I) by striking ``any subsequent 
                                year'' and inserting ``each of 2007, 
                                2008, 2009, and 2010''; and
                                    (II) by striking the period at the 
                                end and inserting a semicolon; and
                            (iii) by adding at the end the following 
                        subclauses:
                                    ``(VI) each of 2011 and 2012, 
                                subject to clause (v), the home health 
                                market basket percentage increase minus 
                                the additional adjustment factor 
                                described in subparagraph (D); and
                                    ``(VII) any subsequent year, 
                                subject to clause (v), the home health 
                                market basket percentage increase.''; 
                                and
                    (B) in clause (iii), by inserting ``(including, for 
                2015 and each subsequent year, being reduced by the 
                productivity adjustment described in section 
                1886(b)(3)(B)(iii)(II))'' after ``in the same manner''; 
                and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Additional adjustment factor described.--For 
                purposes of subparagraph (B)(ii)(VI), the additional 
                adjustment factor described in this subparagraph is 1.0 
                percent.''.
    (f) Psychiatric Hospitals.--Section 1886 of the Social Security 
Act, as amended by sections 3001, 3008, 3025, 3133, is amended by 
adding at the end the following new subsection:
    ``(s) Prospective Payment for Psychiatric Hospitals.--
            ``(1) Reference to establishment and implementation of 
        system.--For provisions related to the establishment and 
        implementation of a prospective payment system for payments 
        under this title for inpatient hospital services furnished by 
        psychiatric hospitals (as described in clause (i) of subsection 
        (d)(1)(B) and psychiatric units (as described in the matter 
        following clause (v) of such subsection), see section 124 of 
        the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
        Act of 1999.
            ``(2) Implementation for rate year beginning in 2010 and 
        subsequent rate years.--In implementing the system described in 
        paragraph (1) for the rate year beginning in 2010 and any 
        subsequent rate year, to the extent that an annual percentage 
        increase factor applies to a base rate for days during the rate 
        year for a psychiatric hospital or unit, respectively, the 
        following shall apply:
                    ``(A) Update for rate years beginning in 2010 
                through 2019.--For days occurring during each of the 
                rate years beginning in 2010 through 2019, the base 
                rate for such days for the hospital or unit shall be 
                increased by the annual percentage increase factor 
                minus the additional adjustment factor described in 
                paragraph (3).
                    ``(B) Productivity adjustment.--For days occurring 
                during the rate year beginning in 2012 and any 
                subsequent rate year, such factor shall be reduced by 
                the productivity adjustment described in section 
                1886(b)(3)(B)(iii)(II).
            ``(3) Additional adjustment factor described.--
                    ``(A) In general.--For purposes of paragraph 
                (2)(A), the additional adjustment factor described in 
                this paragraph is--
                            ``(i) for each of the rate years beginning 
                        in 2010 and 2011, 0.25 percent; and
                            ``(ii) subject to subparagraph (B), for 
                        each of the rate years beginning in 2012 
                        through 2019, 0.2 percent.
                    ``(B) Reduction of adjustment factor for certain 
                psychiatric hospitals and units.--If, for each of the 
                rate years beginning in 2014 through 2019, the total 
                percentage of the non-elderly insured population for 
                the rate year beginning in the preceding year is 
                greater than 5 percentage points below the projection 
                of the total percentage of the non-elderly insured 
                population for the rate year beginning in such 
                preceding year (as of the date of enactment of the 
                America's Healthy Future Act of 2009), as estimated by 
                the Secretary, the additional adjustment factor 
                described in subparagraph (A) for the rate year shall 
                be 0.0 percent.''.
    (g) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act 
(42 U.S.C. 1395f(i)(1)(C)), as amended by section 3132, is amended--
            (1) in clause (ii)--
                    (A) in subclause (VI), by striking ``and'' at the 
                end; and
                    (B) in subclause (VII)--
                            (i) by striking ``for a subsequent fiscal 
                        year (before fiscal year 2014)'' and inserting 
                        ``for each of fiscal years 2003 through 2012'';
                            (ii) by striking the period at the end and 
                        inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subclause:
            ``(VIII) for fiscal year 2013, the market basket percentage 
        increase for the fiscal year (which is reduced by the 
        productivity adjustment described in section 
        1886(b)(3)(B)(iii)(II)) minus the additional adjustment factor 
        described in clause (iv).'';
            (2) in clause (iii)--
                    (A) in subclause (I)--
                            (i) by inserting ``(which is reduced by the 
                        productivity adjustment described in section 
                        1886(b)(3)(B)(iii)(II)) minus the additional 
                        adjustment factor described in clause (iv)'' 
                        before the semicolon at the end; and
                            (ii) by striking ``and'' at the end;
                    (B) in subclause (II)--
                            (i) by striking ``for a subsequent fiscal 
                        year'' and inserting ``for each of fiscal years 
                        2015 through 2019, subject to clause (v),'';
                            (ii) by inserting ``(which is reduced by 
                        the productivity adjustment described in 
                        section 1886(b)(3)(B)(iii)(II)) minus the 
                        additional adjustment factor described in 
                        clause (iv)'' after ``for the fiscal year''; 
                        and
                            (iii) by striking the period at the end and 
                        inserting ``; and''; and
                    (C) by adding at the end the following new 
                subclause:
            ``(III) for a subsequent fiscal year, the payment rates in 
        effect under this clause during the previous fiscal year 
        increased by the market basket percentage increase for the 
        fiscal year (which is reduced by the productivity adjustment 
        described in section 1886(b)(3)(B)(iii)(II)).''; and
            (3) by adding at the end the following new clauses:
    ``(iv) For purposes of clause (ii)(VIII) and clause (iii)(II), the 
additional adjustment factor described in this clause is 0.5 percent.
    ``(v) If, for each of fiscal years 2014 through 2019, the total 
percentage of the non-elderly insured population for the preceding 
fiscal year is greater than 5 percentage points below the projection of 
the total percentage of the non-elderly insured population for such 
preceding fiscal year (as of the date of enactment of the America's 
Healthy Future Act of 2009), as estimated by the Secretary, the 
additional adjustment factor described in clause (iv) for the fiscal 
year shall be 0.0 percent''.
    (h) Dialysis.--Section 1881(b)(14)(F) of the Social Security Act 
(42 U.S.C. 1395rr(b)(14)(F)) is amended by striking ``minus 1.0 
percentage points'' and inserting ``reduced by the productivity 
adjustment described in section 1886(b)(3)(B)(iii)(II)'' each place it 
appears in clauses (i) and (ii)(II).
    (i) Outpatient Hospitals.--Section 1833(t)(3) of the Social 
Security Act (42 U.S.C. 1395l(t)(3)) is amended--
            (1) in subparagraph (C)(iv)--
                    (A) in the first sentence, by inserting (which, for 
                fiscal year 2012 and each subsequent fiscal year, is 
                reduced by the productivity adjustment described in 
                section 1886(b)(3)(B)(iii)(II)) after 
                ``1886(b)(3)(B)(iii)''; and
                    (B) in the second sentence, by inserting ``, and 
                which, for 2012 and each subsequent year, is reduced by 
                the productivity adjustment described in section 
                1886(b)(3)(iii)(II)'' before the period at the end; and
            (2) by adding at the end the following new subparagraph:
                    ``(F) Update for 2010 through 2019.--
                            ``(i) In general.--With respect to covered 
                        OPD services furnished in each of 2010 through 
                        2019, the amount of payment under the 
                        prospective payment system established under 
                        this subsection shall be increased by the 
                        increase factor described in subparagraph (C) 
                        minus the additional adjustment factor 
                        described in clause (ii).
                            ``(ii) Additional adjustment factor 
                        described.--For purposes of clause (i), the 
                        additional adjustment factor described in this 
                        clause is--
                                    ``(I) for each of 2010 and 2011, 
                                0.25 percent; and
                                    ``(II) subject to clause (iii), for 
                                each of 2012 through 2019, 0.2 percent.
                            ``(iii) Reduction of adjustment factor for 
                        certain hospitals.--If, for each of 2014 
                        through 2019, the total percentage of the non-
                        elderly insured population for the preceding 
                        year is greater than 5 percentage points below 
                        the projection of the total percentage of the 
                        non-elderly insured population for such 
                        preceding year (as of the date of enactment of 
                        the America's Healthy Future Act of 2009), as 
                        estimated by the Secretary, the additional 
                        adjustment factor described in clause (ii) for 
                        the year shall be 0.0 percent.''.
    (j) Ambulance Services.--Section 1834(l)(3)(B) of the Social 
Security Act (42 U.S.C. 1395m(l)(3)(B)) is amended by inserting before 
the period at the end the following: ``and, in the case of 2011 and 
each subsequent year, reduced by the productivity adjustment described 
in section 1886(b)(3)(B)(iii)(II)''.
    (k) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of 
the Social Security Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
            (1) by redesignating clause (v) as clause (vi); and
            (2) by inserting after clause (iv) the following new 
        clause:
                            ``(v) In implementing the system described 
                        in clause (i), for services furnished during 
                        2011 and each subsequent year, to the extent 
                        that an annual percentage change factor 
                        applies, such factor shall be reduced by the 
                        productivity adjustment described in section 
                        1886(b)(3)(B)(iii)(II).''.
    (l) Laboratory Services.--Section 1833(h)(2)(A) of the Social 
Security Act (42 U.S.C. 1395l(h)(2)(A)) is amended--
            (1) in clause (i), by striking ``minus, for each of the 
        years 2009 through 2013, 0.5 percentage points'' and inserting 
        ``reduced, for 2011 and each subsequent year, by the 
        productivity adjustment described in section 
        1886(b)(3)(B)(iii)(II), except that the application of such 
        productivity adjustment shall not result in the annual 
        adjustment under this clause being less than 0.0''; and
            (2) in clause (ii)--
                    (A) by striking ``and'' at the end of subclause 
                (III);
                    (B) by striking the period at the end of subclause 
                (IV) and inserting a comma; and
                    (C) by adding at the end the following new 
                subclauses:
                                    ``(V) the annual adjustment in the 
                                fee schedules, as determined under 
                                clause (i), for each of 2009 and 2010 
                                shall be reduced by 0.5 percentage 
                                points,
                                    ``(VI) the annual adjustment in the 
                                fee schedules, as determined under 
                                clause (i), for each of the years 2011 
                                through 2014 shall be reduced by 1.75 
                                percentage points (which may include a 
                                reduction below zero), and
                                    ``(VII) the annual adjustment in 
                                the fee schedules, as determined under 
                                clause (i), for 2015 shall be reduced 
                                by 1.95 percentage points (which may 
                                include a reduction below zero).''.
    (m) Certain Durable Medical Equipment.--Section 1834(a)(14) of the 
Social Security Act (42 U.S.C. 1395m(a)(14)) is amended--
            (1) by redesignating subparagraphs (L) and (M) as 
        subparagraphs (M) and (N), respectively;
            (2) in subparagraph (K), by striking ``2011, 2012, and 
        2013,'';
            (3) by inserting after subparagraph (K), the following new 
        subparagraph:
                    ``(L) for 2011, 2012, and 2013, the percentage 
                increase in the consumer price index for all urban 
                consumers (U.S. urban average) for the 12-month period 
                ending with June of the previous year, reduced by the 
                productivity adjustment described in section 
                1886(b)(3)(B)(iii)(II);''.
            (4) in subparagraph (M), as redesignated by paragraph (1)--
                    (A) in clause (i), by striking ``, plus 2.0 
                percentage points''; and
                    (B) in each of clauses (i) and (ii), by inserting 
                ``reduced by the productivity adjustment described in 
                section 1886(b)(3)(B)(iii)(II),'' after ``June 2013,''; 
                and
            (5) in subparagraph (N), as redesignated by paragraph (1), 
        by inserting ``, reduced by the productivity adjustment 
        described in section 1886(b)(3)(B)(iii)(II)'' before the period 
        at the end.
    (n) Prosthetic Devices, Orthotics, and Prosthetics.--Section 
1834(h)(4)(A)(x) of the Social Security Act (42 U.S.C. 
1395m(h)(4)(A)(x)) is amended by inserting ``and, in the case of 2011 
and each subsequent year, reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(iii)(II)'' before the semicolon at 
the end.
    (o) Other Items.--The second sentence of section 1842(s)(1) of the 
Social Security Act (42 U.S.C. 1395u(s)(1)), in the matter preceding 
subparagraph (A), is amended by inserting ``and, in the case of 2011 
and each subsequent year, reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(iii)(II)'' after ``preceding year''.
    (p) No Application Prior to January 1, 2010.--Notwithstanding the 
preceding provisions of this section--
            (1) the amendments made by subsections (a), (c), and (d) 
        shall not apply to discharges occurring before January 1, 2010; 
        and
            (2) the amendments made by subsection (f) shall not apply 
        to days occurring before January 1, 2010.

SEC. 3402. TEMPORARY ADJUSTMENT TO THE CALCULATION OF PART B PREMIUMS.

    Section 1839(i) of the Social Security Act (42 U.S.C. 1395r(i)) is 
amended--
            (1) in paragraph (2), in the matter preceding subparagraph 
        (A), by inserting ``subject to paragraph (6),'' after 
        ``subsection,'';
            (2) in paragraph (3)(A)(i), by striking ``The applicable'' 
        and inserting ``Subject to paragraph (6), the applicable'';
            (3) by redesignating paragraph (6) as paragraph (7); and
            (4) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) Temporary adjustment to income thresholds.--
        Notwithstanding any other provision of this subsection, during 
        the period beginning on January 1, 2011, and ending on December 
        31, 2019--
                    ``(A) the threshold amount otherwise applicable 
                under paragraph (2) shall be equal to such amount for 
                2010; and
                    ``(B) the dollar amounts otherwise applicable under 
                paragraph (3)(C)(i) shall be equal to such dollar 
                amounts for 2010.''.

SEC. 3403. MEDICARE COMMISSION.

    (a) Commission.--
            (1) In general.--Title XVIII of the Social Security Act (42 
        U.S.C. 1395 et seq.), as amended by section 3022, is amended by 
        adding at the end the following new section:

                         ``medicare commission

    ``Sec. 1899A.  (a) Establishment.--There is established an 
independent commission to be known as the `Medicare Commission'
    ``(b) Purpose.--It is the purpose of this section to, in accordance 
with the following provisions of this section, reduce the per capita 
rate of growth in Medicare spending--
            ``(1) by requiring the Chief Actuary of the Centers for 
        Medicare & Medicaid Services to determine in each year to which 
        this section applies (in this section referred to as `a 
        determination year ') the projected per capita growth rate 
        under Medicare for the second year following the determination 
        year (in this section referred to as `an implementation year');
            ``(2) if the projection for the implementation year exceeds 
        the target growth rate for that year, by requiring the 
        Commission to develop and submit during the first year 
        following the determination year (in this section referred to 
        as `a proposal year ') a proposal to reduce the Medicare per 
        capita growth rate to the extent required by this section; and
            ``(3) by requiring the Secretary to implement such 
        proposals unless Congress enacts legislation pursuant to this 
        section.
    ``(c) Commission Proposals.--
            ``(1) Development and submission.--
                    ``(A) In general.--The Commission shall develop and 
                submit detailed and specific proposals to Congress in 
                accordance with the succeeding provisions of this 
                section.
                    ``(B) Advisory reports.--Beginning January 1, 2014, 
                the Commission may submit to Congress advisory reports 
                on matters related to the Medicare program, regardless 
                of whether or not the Commission submitted a proposal 
                for such year. Such a report may, for years prior to 
                2020, include recommendations regarding improvements to 
                payment systems for providers of services and suppliers 
                who are not otherwise subject to the scope of the 
                Commission's recommendations in a proposal under this 
                section. Any advisory report submitted under this 
                subparagraph shall not be subject to the rules for 
                congressional consideration under subsection (d).
            ``(2) Scope of proposals.--
                    ``(A) Requirements.--Each proposal submitted under 
                this section in a proposal year shall meet each of the 
                following requirements:
                            ``(i) If the Chief Actuary of the Centers 
                        for Medicare & Medicaid Services has made a 
                        determination under paragraph (5)(A) in the 
                        determination year, the proposal shall include 
                        recommendations so that the proposal as a whole 
                        (after taking into account recommendations 
                        under clause (v)) will result in a net 
                        reduction in total Medicare program spending in 
                        the implementation year equal to the applicable 
                        savings target established under paragraph 
                        (5)(B) for such implementation year. In 
                        determining whether a proposal meets the 
                        requirement of the preceding sentence, 
                        reductions in Medicare program spending during 
                        the 3-month period immediately preceding the 
                        implementation year shall be counted to the 
                        extent that such reductions are a result of the 
                        implementation of recommendations contained in 
                        the proposal for a change in the payment rate 
                        for an item or service that was effective 
                        during such period pursuant to subsection 
                        (e)(2)(A).
                            ``(ii) The proposal shall not include any 
                        recommendation to ration health care, raise 
                        revenues or Medicare beneficiary premiums under 
                        section 1818, 1818A, or 1839, increase Medicare 
                        beneficiary cost-sharing (including 
                        deductibles, coinsurance, and copayments), or 
                        otherwise restrict benefits or modify 
                        eligibility criteria.
                            ``(iii) In the case of proposals submitted 
                        prior to December 31, 2018, the proposal shall 
                        not include any recommendation that would 
                        impact, prior to December 31, 2019, providers 
                        of services (as defined in section 1861(u)) and 
                        suppliers (as defined in section 1861(d)) 
                        scheduled to receive a reduction to the 
                        inflationary payment updates of such providers 
                        of services and suppliers in excess of a 
                        reduction due to productivity in a year in 
                        which such recommendations would take effect.
                            ``(iv) As appropriate, the proposal shall 
                        include recommendations to reduce Medicare 
                        payments under parts C and D, such as 
                        reductions under such parts in the Federal 
                        premium subsidies to Medicare Advantage and 
                        prescription drug plans and the performance 
                        bonuses.
                            ``(v) The proposal shall include 
                        recommendations with respect to administrative 
                        funding for the Secretary to carry out the 
                        recommendations contained in the proposal.
                    ``(B) Additional considerations.--In developing and 
                submitting each proposal under this section in a 
                proposal year, the Commission shall, to the extent 
                feasible--
                            ``(i) include recommendations that target 
                        reductions in Medicare program spending to 
                        sources of excess cost growth;
                            ``(ii) include recommendations that--
                                    ``(I) improve the health care 
                                delivery system and health outcomes, 
                                including by promoting integrated care, 
                                care coordination, prevention and 
                                wellness, and quality and efficiency 
                                improvement; and
                                    ``(II) protect and improve Medicare 
                                beneficiaries' access to necessary and 
                                evidence-based items and services, 
                                including in rural and frontier areas;
                            ``(iii) give priority to recommendations 
                        that extend Medicare solvency;
                            ``(iv) consider the effects on Medicare 
                        beneficiaries of changes in payments to 
                        providers of services (as defined in section 
                        1861(u)) and suppliers (as defined in section 
                        1861(d));
                            ``(v) consider the effects of the 
                        recommendations on providers of services and 
                        suppliers with actual or projected negative 
                        cost margins or payment updates; and
                            ``(vi) consider the unique needs of 
                        Medicare beneficiaries who are dually eligible 
                        for Medicare and the Medicaid program under 
                        title XIX.
                    ``(C) No increase in total medicare program 
                spending.--Each proposal submitted under this section 
                shall be designed in such a manner that implementation 
                of the recommendations contained in the proposal would 
                not be expected to result, over the 10-year period 
                starting with the implementation year, in any increase 
                in the total amount of net Medicare program spending 
                relative to the total amount of net Medicare program 
                spending that would have occurred absent such 
                implementation.
                    ``(D) Consultation with medpac.--The Commission 
                shall submit a draft copy of each proposal to be 
                submitted to Congress under this section to the 
                Medicare Payment Advisory Commission established under 
                section 1805 for its review. The commission shall 
                submit such draft copy by not later than September 1 of 
                the year preceding the year for which the proposal is 
                to be submitted. Not later than February 1 of the 
                succeeding year, the Medicare Payment Advisory 
                Commission shall submit a report to Congress on the 
                results of such review.
                    ``(E) Review and comment by the secretary.--The 
                Commission shall submit a draft copy of each proposal 
                to be submitted to Congress under this section to the 
                Secretary for the Secretary's review and comment. The 
                Commission shall submit such draft copy by not later 
                than September 1 of the year preceding the year for 
                which the proposal is to be submitted. Not later than 
                February 1 of the succeeding year, the Secretary shall 
                submit a report to Congress on the results of such 
                review, unless the Secretary submits a proposal under 
                paragraph (3)(C) in that year.
                    ``(F) Consultations.--In carrying out its duties 
                under this section, the Commission shall engage in 
                regular consultations with the Medicaid and CHIP 
                Payment and Access Commission under section 1900.
            ``(3) Submission.--
                    ``(A) Required information.--Each proposal 
                submitted by the Commission to Congress under this 
                section shall include--
                            ``(i) an explanation of each recommendation 
                        contained in the proposal and the reasons for 
                        including such recommendation; and
                            ``(ii) an actuarial opinion by the Chief 
                        Actuary of the Centers for Medicare & Medicaid 
                        Services certifying that the proposal meets the 
                        requirements of subparagraphs (A)(i) and (C) of 
                        paragraph (2).
                    ``(B) Dates for submission.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) and subsection (f)(3)(B), the 
                        Commission shall submit a proposal to Congress 
                        on January 1, 2014, and annually thereafter.
                            ``(ii) Exception.--The Commission shall not 
                        submit a proposal to Congress under this 
                        section in a proposal year if the year is--
                                    ``(I) a year for which the Chief 
                                Actuary of the Centers for Medicare & 
                                Medicaid Services make a determination 
                                in the determination year under 
                                paragraph (4)(A) that the growth rate 
                                described in clause (i) of such 
                                paragraph does not exceed the growth 
                                rate described in clause (ii) of such 
                                paragraph; or
                                    ``(II) a year in which the 
                                percentage increase (if any) for the 
                                medical care expenditure category of 
                                the Consumer Price Index for All Urban 
                                Consumers (United States city average) 
                                for the implementation year is less 
                                than the percentage increase (if any) 
                                in the Consumer Price Index for All 
                                Urban Consumers (all items; United 
                                States city average) for such 
                                implementation year;
                                    ``(III) the year referred to in 
                                subsection (f)(1)(A).
                            ``(iii) Start-up period.--The Commission 
                        may not submit a proposal to Congress prior to 
                        January 1, 2014.
                    ``(C) Contingent secretarial submission.--If, with 
                respect to a proposal year, the Commission is required 
                to but fails to submit a proposal by the deadline 
                applicable under subparagraph (B)(i), the Secretary 
                shall submit a detailed and specific proposal to 
                Congress that satisfies the requirements of 
                subparagraph (A) and subparagraphs (A), (B), and (C) of 
                paragraph (2) not later than January 5 of the year. The 
                Secretary shall transmit a copy of the proposal to the 
                Medicare Payment Advisory Commission for its review. 
                The Medicare Payment Advisory Commission shall submit a 
                report to Congress on the results of such review by 
                February 1 of the year.
            ``(4) Per capita growth rate projections by chief 
        actuary.--
                    ``(A) In general.--Subject to subsection (f)(3)(A), 
                not later than April 30, 2013, and annually thereafter, 
                the Chief Actuary of the Centers for Medicare & 
                Medicaid Services shall determine in each such year 
                whether--
                            ``(i) the projected Medicare per capita 
                        growth rate for the implementation year (as 
                        determined under subparagraph (B)); exceeds
                            ``(ii) the projected Medicare per capita 
                        target growth rate for the implementation year 
                        (as determined under subparagraph (C)).
                    ``(B) Medicare per capita growth rate.--
                            ``(i) In general.--For purposes of this 
                        section, the Medicare per capita growth rate 
                        for an implementation year shall be calculated 
                        as the projected 5-year average (ending with 
                        such year) of the growth in Medicare program 
                        spending per unduplicated enrollee.
                            ``(ii) Requirement.--The projection under 
                        clause (i) shall--
                                    ``(I) to the extent that there is 
                                projected to be a negative update to 
                                the single conversion factor applicable 
                                to payments for physicians' services 
                                under section 1848(d) furnished in the 
                                proposal year or the implementation 
                                year, assume that such update for such 
                                services is 0 percent rather than the 
                                negative percent that would otherwise 
                                apply; and
                                    ``(II) take into account any 
                                delivery system reforms or other 
                                payment changes that have been enacted 
                                or published in final rules but not yet 
                                implemented as of the making of such 
                                calculation.
                    ``(C) Medicare per capita target growth rate.--For 
                purposes of this section, the Medicare per capita 
                target growth rate for an implementation year shall be 
                calculated as the projected 5-year average (ending with 
                such year) percentage increase in--
                            ``(i) in the case of a determination year 
                        that is prior to 2018, the average of the 
                        projected percentage increase (if any) in--
                                    ``(I) the Consumer Price Index for 
                                All Urban Consumers (all items; United 
                                States city average); and
                                    ``(II) the medical care expenditure 
                                category of the Consumer Price Index 
                                for All Urban Consumers (United States 
                                city average); and
                            ``(ii) in the case of a determination year 
                        that is after 2017, the nominal gross domestic 
                        product per capita plus 1.0 percentage point.
            ``(5) Savings requirement.--
                    ``(A) In general.--If, with respect to a 
                determination year, the Chief Actuary of the Centers 
                for Medicare & Medicaid Services makes a determination 
                under paragraph (4)(A) that the growth rate described 
                in clause (i) of such paragraph exceeds the growth rate 
                described in clause (ii) of such paragraph, the Chief 
                Actuary shall establish an applicable savings target 
                for the implementation year.
                    ``(B) Applicable savings target.--For purposes of 
                this section, the applicable savings target for an 
                implementation year shall be an amount equal to the 
                product of--
                            ``(i) the total amount of projected 
                        Medicare program spending for the proposal 
                        year; and
                            ``(ii) the applicable percent for the 
                        implementation year.
                    ``(C) Applicable percent.--For purposes of 
                subparagraph (B), the applicable percent for a 
                projection is the lesser of--
                            ``(i) in the case of--
                                    ``(I) implementation year 2015, 0.5 
                                percent;
                                    ``(II) implementation year 2016, 
                                1.0 percent;
                                    ``(III) implementation year 2017, 
                                1.25 percent; and
                                    ``(IV) implementation year 2018 or 
                                any subsequent implementation year, 1.5 
                                percent; and
                            ``(ii) the projected excess for the 
                        implementation year (expressed as a percent) 
                        determined under subparagraph (A).
    ``(d) Congressional Consideration.--
            ``(1) Committee consideration of proposal; discharge; 
        contingency for introduction.--Not later than April 1 of any 
        proposal year in which a Commission proposal or Secretarial 
        proposal is submitted to Congress under this section, the 
        appropriate committees of Congress shall report legislation 
        implementing the recommendations contained in the proposal or 
        legislation that satisfies the requirements of subparagraphs 
        (A), (B), and (C) of subsection (c)(2). If, with respect to the 
        House involved, any such committee has not reported such 
        legislation by such date, such committees shall be deemed to be 
        discharged from further consideration of the proposal and any 
        member of the House of Representatives or the Senate, 
        respectively, may introduce legislation implementing the 
        recommendations contained in the proposal and such legislation 
        shall be placed on the appropriate calendar of the House 
        involved.
            ``(2) Expedited procedure.--
                    ``(A) Consideration.--If legislation is reported 
                out of committee or legislation is introduced under 
                paragraph (1), not later than 15 calendar days after 
                the date on which a committee has been or could have 
                been discharged from consideration of such legislation 
                or such legislation is introduced, the Speaker of the 
                House of Representatives, or the Speaker's designee, or 
                the majority leader of the Senate, or the leader's 
                designee, shall move to proceed to the consideration of 
                the legislation. It shall also be in order for any 
                member of the Senate or the House of Representatives, 
                respectively, to move to proceed to the consideration 
                of the legislation at any time after the conclusion of 
                such 15-day period. All points of order against the 
                legislation (and against consideration of the 
                legislation) with the exception of points of order 
                under the Congressional Budget Act of 1974 and points 
                of order to strike any matters extraneous to Medicare 
                are waived. A motion to proceed to the consideration of 
                the legislation is privileged in the Senate and highly 
                privileged in the House of Representatives and is not 
                debatable. The motion is not subject to amendment, to a 
                motion to postpone consideration of the legislation, or 
                to a motion to proceed to the consideration of other 
                business. A motion to reconsider the vote by which the 
                motion to proceed is agreed to or not agreed to shall 
                not be in order. If the motion to proceed is agreed to, 
                the Senate or the House of Representatives, as the case 
                may be, shall immediately proceed to consideration of 
                the legislation in accordance with the Standing Rules 
                of the Senate or the House of Representatives, as the 
                case may be, without intervening motion, order, or 
                other business, and the resolution shall remain the 
                unfinished business of the Senate or the House of 
                Representatives, as the case may be, until disposed of.
                    ``(B) Consideration by other house.--If, before the 
                passage by one House of the legislation that was 
                introduced in such House, such House receives from the 
                other House legislation as passed by such other House--
                            ``(i) the legislation of the other House 
                        shall not be referred to a committee and shall 
                        immediately displace the legislation that was 
                        reported or introduced in the House in receipt 
                        of the legislation of the other House; and
                            ``(ii) the legislation of the other House 
                        shall immediately be considered by the 
                        receiving House under the same procedures 
                        applicable to legislation reported by or 
                        discharged from a committee or introduced under 
                        paragraph (1).
                Upon disposition of legislation that is received by one 
                House from the other House, it shall no longer be in 
                order to consider the legislation that was reported or 
                introduced in the receiving House.
                    ``(C) Senate limits on debate.--In the Senate, 
                consideration of the legislation and on all debatable 
                motions and appeals in connection therewith shall not 
                exceed a total of 30 hours, which shall be divided 
                equally between those favoring and those opposing the 
                legislation. A motion further to limit debate on the 
                legislation is in order and is not debatable. Any 
                debatable motion or appeal is debatable for not to 
                exceed 1 hour, to be divided equally between those 
                favoring and those opposing the motion or appeal. All 
                time used for consideration of the legislation, 
                including time used for quorum calls and voting, shall 
                be counted against the total 30 hours of consideration.
                    ``(D) Consideration in conference.--Immediately 
                upon a final passage of the legislation that results in 
                a disagreement between the two Houses of Congress with 
                respect to the legislation, conferees shall be 
                appointed and a conference convened. Not later than 15 
                days after the date on which conferees are appointed 
                (excluding periods in which one or both Houses are in 
                recess), the conferees shall file a report with the 
                Senate and the House of Representatives resolving the 
                differences between the Houses on the legislation. 
                Notwithstanding any other rule of the Senate or the 
                House of Representatives, it shall be in order to 
                immediately consider a report of a committee of 
                conference on the legislation filed in accordance with 
                this subsection. Debate in the Senate and the House of 
                Representatives on the conference report shall be 
                limited to 10 hours, equally divided and controlled by 
                the majority and minority leaders of the Senate or 
                their designees and the Speaker of the House of 
                Representatives and the minority leader of the House of 
                Representatives or their designees. A vote on final 
                passage of the conference report shall occur 
                immediately at the conclusion or yielding back of all 
                time for debate on the conference report.
            ``(3) Rules of the senate and house of representatives.--
        This subsection and subsection (f)(2) are enacted by Congress--
                    ``(A) as an exercise of the rulemaking power of the 
                Senate and House of Representatives, respectively, and 
                is deemed to be part of the rules of each House, 
                respectively, but applicable only with respect to the 
                procedure to be followed in that House in the case of 
                legislation under this section, and it supersedes other 
                rules only to the extent that it is inconsistent with 
                such rules; and
                    ``(B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                they relate to the procedure of that House) at any 
                time, in the same manner, and to the same extent as in 
                the case of any other rule of that House.
    ``(e) Implementation of Proposal.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Secretary shall, except as provided in paragraph (3), 
        implement the recommendations contained in a proposal submitted 
        by the Commission or the Secretary to Congress under this 
        section on August 15 of the year in which the proposal is so 
        submitted.
            ``(2) Application.--
                    ``(A) In general.--A recommendation described in 
                paragraph (1) shall apply as follows:
                            ``(i) In the case of a recommendation that 
                        is a change in the payment rate for an item or 
                        service under Medicare in which payment rates 
                        change on a fiscal year basis (or a cost 
                        reporting period basis that relates to a fiscal 
                        year), on a calendar year basis (or a cost 
                        reporting period basis that relates to a 
                        calendar year), or on a rate year basis (or a 
                        cost reporting period basis that relates to a 
                        rate year), such recommendation shall apply to 
                        items and services furnished on the first day 
                        of the first fiscal year, calendar year, or 
                        rate year (as the case may be) that begins 
                        after such August 15.
                            ``(ii) In the case of a recommendation 
                        relating to payments to plans under parts C and 
                        D, such recommendation shall apply to plan 
                        years beginning on the first day of the first 
                        calendar year that begins after such August 15.
                            ``(iii) In the case of any other 
                        recommendation, such recommendation shall be 
                        addressed in the regular regulatory process 
                        timeframe and shall apply as soon as 
                        practicable.
                    ``(B) Interim final rulemaking.--The Secretary may 
                use interim final rulemaking to implement any 
                recommendation described in paragraph (1).
            ``(3) Exception.--The Secretary shall not be required to 
        implement the recommendations contained in a proposal submitted 
        in a proposal year by the Commission or the Secretary to 
        Congress under this section if--
                    ``(A) prior to August 15 of the proposal year, 
                Federal legislation is enacted that satisfies the 
                requirements of subparagraphs (A), (B), and (C) of 
                subsection (c)(2), and which may implement all, some, 
                or none of the recommendations contained in the 
                proposal; or
                    ``(B) in the case of implementation year 2020 and 
                subsequent implementation years, a joint resolution 
                described in subsection (f)(1) is enacted not later 
                than August 15, 2017.
            ``(4) No affect on authority to implement certain 
        provisions.--Nothing in paragraph (3) shall be construed to 
        affect the authority of the Secretary to implement any 
        recommendation contained in a proposal or advisory report under 
        this section to the extent that the Secretary otherwise has the 
        authority to implement such recommendation administratively.
            ``(5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the implementation by the Secretary under 
        this subsection of the recommendations contained in a proposal.
    ``(f) Joint Resolution Required To Discontinue Automatic 
Implementation of Recommendations in Proposals.--
            ``(1) In general.--For purposes of subsection (e)(3)(B), a 
        joint resolution described in this paragraph means only a joint 
        resolution--
                    ``(A) that is introduced in 2017 by not later than 
                February 1 of such year;
                    ``(B) which does not have a preamble;
                    ``(C) the title of which is as follows: `Joint 
                resolution approving the discontinuation of the process 
                for consideration and automatic implementation of the 
                biennial proposal of the Medicare Commission under 
                section 1899A of the Social Security Act'; and
                    ``(D) the matter after the resolving clause of 
                which is as follows: `That Congress approves the 
                discontinuation of the process for consideration and 
                automatic implementation of the biennial proposal of 
                the Medicare Commission under section 1899A of the 
                Social Security Act.'.
            ``(2) Procedure.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                procedures described in subsections (b)(1), (c), (d), 
                and (f) of section 802 of title 5, United States Code, 
                shall apply to the consideration of a joint resolution 
                described in paragraph (1).
                    ``(B) Terms and exceptions.--For purposes of this 
                subsection--
                            ``(i) the references to `subsection (a)' in 
                        subsections (b)(1)(A), (c), (d), and (f) of 
                        section 802 of that title shall be considered 
                        to refer to paragraph (1) of this subsection; 
                        and
                            ``(ii) the 20 calendar day period described 
                        in section 802(c) shall be considered to refer 
                        to the period ending on the 20th calendar day 
                        occurring after the date on which a resolution 
                        described in paragraph (1) is introduced.
                    ``(C) Excluded days.--For purposes of determining 
                the period specified in subparagraph (B), there shall 
                be excluded any days either House of Congress is 
                adjourned for more than 3 days during a session of 
                Congress.
            ``(3) Termination.--If a joint resolution described in 
        paragraph (1) is enacted not later than August 15, 2017--
                    ``(A) the Chief Actuary of the Medicare & Medicaid 
                Services shall not make any determinations under 
                paragraph (4) after the date of the enactment of such 
                joint resolution;
                    ``(B) the Commission shall not submit any proposals 
                or advisory reports to Congress under this section 
                after the date of the enactment of such joint 
                resolution; and
                    ``(C) the Commission and the consumer advisory 
                council under subsection (k) shall terminate 60 days 
                after the date of the enactment of such joint 
                resolution.
    ``(g) Commission Membership; Terms of Office; Chairperson; 
Removal.--
            ``(1) Membership.--
                    ``(A) In general.--The Commission shall be composed 
                of--
                            ``(i) 15 members appointed by the 
                        President, by and with the advice and consent 
                        of the Senate; and
                            ``(ii) the Secretary, the Administrator of 
                        the Center for Medicare & Medicaid Services, 
                        and the Administrator of the Health Resources 
                        and Services Administration, all of whom shall 
                        serve ex officio as nonvoting members of the 
                        Commission.
                    ``(B) Qualifications.--
                            ``(i) In general.--The appointed membership 
                        of the Commission shall include individuals 
                        with national recognition for their expertise 
                        in health finance and economics, actuarial 
                        science, health facility management, health 
                        plans and integrated delivery systems, 
                        reimbursement of health facilities, allopathic 
                        and osteopathic physicians, and other providers 
                        of health services, and other related fields, 
                        who provide a mix of different professionals, 
                        broad geographic representation, and a balance 
                        between urban and rural representatives.
                            ``(ii) Inclusion.--The appointed membership 
                        of the Commission shall include (but not be 
                        limited to) physicians and other health 
                        professionals, experts in the area of pharmaco-
                        economics or prescription drug benefit 
                        programs, employers, third-party payers, 
                        individuals skilled in the conduct and 
                        interpretation of biomedical, health services, 
                        and health economics research and expertise in 
                        outcomes and effectiveness research and 
                        technology assessment. Such membership shall 
                        also include representatives of consumers and 
                        the elderly.
                            ``(iii) Majority nonproviders.--Individuals 
                        who are directly involved in the provision or 
                        management of the delivery of items and 
                        services covered under this title shall not 
                        constitute a majority of the appointed 
                        membership of the Commission.
                    ``(C) Ethical disclosure.--The President shall 
                establish a system for public disclosure by appointed 
                members of the Commission of financial and other 
                potential conflicts of interest relating to such 
                members. Appointed members of the Commission shall be 
                treated as officers in the executive branch for 
                purposes of applying title I of the Ethics in 
                Government Act of 1978 (Public Law 95-521).
                    ``(D) Conflicts of interest.--No individual may 
                serve as an appointed member if that individual engages 
                in any other business, vocation, or employment.
                    ``(E) Consultation with congress.--In selecting 
                individuals for nominations for appointments to the 
                Commission, the President shall consult with--
                            ``(i) the majority leader of the Senate 
                        concerning the appointment of 3 members;
                            ``(ii) the Speaker of the House of 
                        Representatives concerning the appointment of 3 
                        members;
                            ``(iii) the minority leader of the Senate 
                        concerning the appointment of 3 members; and
                            ``(iv) the minority leader of the House of 
                        Representatives concerning the appointment of 3 
                        members.
            ``(2) Term of office.--Each appointed member shall hold 
        office for a term of 6 years except that--
                    ``(A) a member appointed to fill a vacancy 
                occurring prior to the expiration of the term for which 
                that member's predecessor was appointed shall be 
                appointed for the remainder of such term;
                    ``(B) a member may continue to serve after the 
                expiration of the member's term until a successor has 
                taken office; and
                    ``(C) of the members first appointed under this 
                section, 5 shall be appointed for a term of 1 year, 5 
                shall be appointed for a term of 3 years, and 5 shall 
                be appointed for a term of 6 years, the term of each to 
                be designated by the President at the time of 
                nomination.
            ``(3) Chairperson.--
                    ``(A) In general.--The Chairperson shall be 
                appointed by the President, by and with the advice and 
                consent of the Senate, from among the members of the 
                Commission.
                    ``(B) Duties.--The Chairperson shall be the 
                principal executive officer of the Commission, and 
                shall exercise all of the executive and administrative 
                functions of the Commission, including functions of the 
                Commission with respect to--
                            ``(i) the appointment and supervision of 
                        personnel employed by the Commission;
                            ``(ii) the distribution of business among 
                        personnel appointed and supervised by the 
                        Chairperson and among administrative units of 
                        the Commission; and
                            ``(iii) the use and expenditure of funds.
                    ``(C) Governance.--In carrying out any of the 
                functions under subparagraph (B), the Chairperson shall 
                be governed by the general policies established by the 
                Commission and by the decisions, findings, and 
                determinations the Commission shall by law be 
                authorized to make.
                    ``(D) Requests for appropriations.--Requests or 
                estimates for regular, supplemental, or deficiency 
                appropriations on behalf of the Commission may not be 
                submitted by the Chairperson without the prior approval 
                of a majority vote of the Commission.
            ``(4) Removal.--Any appointed member may be removed by the 
        President for neglect of duty or malfeasance in office, but for 
        no other cause.
    ``(h) Vacancies; Quorum; Seal; Vice Chairperson; Voting on 
Reports.--
            ``(1) Vacancies.--No vacancy on the Commission shall impair 
        the right of the remaining members to exercise all the powers 
        of the Commission.
            ``(2) Quorum.--A majority of the appointed members of the 
        Commission shall constitute a quorum for the transaction of 
        business, but a lesser number of members may hold hearings.
            ``(3) Seal.--The Commission shall have an official seal, of 
        which judicial notice shall be taken.
            ``(4) Vice chairperson.--The Commission shall annually 
        elect a Vice Chairperson to act in the absence or disability of 
        the Chairperson or in case of a vacancy in the office of the 
        Chairperson.
            ``(5) Voting on proposals.--Any proposal of the Commission 
        must be approved by the majority of appointed members present.
    ``(i) Powers of the Commission.--
            ``(1) Hearings.--The Commission may hold such hearings, sit 
        and act at such times and places, take such testimony, and 
        receive such evidence as the Commission considers advisable to 
        carry out this section.
            ``(2) Authority to inform research priorities for data 
        collection.--The Commission may advise the Secretary on 
        priorities for health services research, particularly as such 
        priorities pertain to necessary changes and issues regarding 
        payment reforms under Medicare.
            ``(3) Obtaining official data.--The Commission may secure 
        directly from any department or agency of the United States 
        information necessary to enable it to carry out this section. 
        Upon request of the Chairperson, the head of that department or 
        agency shall furnish that information to the Commission on an 
        agreed upon schedule.
            ``(4) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as other departments and agencies of the Federal Government.
            ``(5) Gifts.--The Commission may accept, use, and dispose 
        of gifts or donations of services or property.
            ``(6) Offices.--The Commission shall maintain a principal 
        office and such field offices as it determines necessary, and 
        may meet and exercise any of its powers at any other place.
    ``(j) Personnel Matters.--
            ``(1) Compensation of members and chairperson.--Each 
        appointed member, other than the Chairperson, shall be 
        compensated at a rate equal to the annual rate of basic pay 
        prescribed for level III of the Executive Schedule under 
        section 5315 of title 5, United States Code. The Chairperson 
        shall be compensated at a rate equal to the daily equivalent of 
        the annual rate of basic pay prescribed for level II of the 
        Executive Schedule under section 5315 of title 5, United States 
        Code.
            ``(2) Travel expenses.--The appointed members shall be 
        allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Commission.
            ``(3) Staff.--
                    ``(A) In general.--The Chairperson may, without 
                regard to the civil service laws and regulations, 
                appoint and terminate an executive director and such 
                other additional personnel as may be necessary to 
                enable the Commission to perform its duties. The 
                employment of an executive director shall be subject to 
                confirmation by the Commission.
                    ``(B) Compensation.--The Chairperson may fix the 
                compensation of the executive director and other 
                personnel without regard to chapter 51 and subchapter 
                III of chapter 53 of title 5, United States Code, 
                relating to classification of positions and General 
                Schedule pay rates, except that the rate of pay for the 
                executive director and other personnel may not exceed 
                the rate payable for level V of the Executive Schedule 
                under section 5316 of such title.
            ``(4) Detail of government employees.--Any Federal 
        Government employee may be detailed to the Commission without 
        reimbursement, and such detail shall be without interruption or 
        loss of civil service status or privilege.
            ``(5) Procurement of temporary and intermittent services.--
        The Chairperson may procure temporary and intermittent services 
        under section 3109(b) of title 5, United States Code, at rates 
        for individuals which do not exceed the daily equivalent of the 
        annual rate of basic pay prescribed for level V of the 
        Executive Schedule under section 5316 of such title.
    ``(k) Consumer Advisory Council.--
            ``(1) In general.--There is established a consumer advisory 
        council to advise the Commission on the impact of payment 
        policies under this title on consumers.
            ``(2) Membership.--
                    ``(A) Number and appointment.--The consumer 
                advisory council shall be composed of 10 consumer 
                representatives appointed by the Comptroller General of 
                the United States, 1 from among each of the 10 regions 
                established by the Secretary as of the date of 
                enactment of this section.
                    ``(B) Qualifications.--The membership of the 
                council shall represent the interests of consumers and 
                particular communities.
            ``(3) Duties.--The consumer advisory council shall, subject 
        to the call of the Commission, meet not less frequently than 2 
        times each year in the District of Columbia.
            ``(4) Open meetings.--Meetings of the consumer advisory 
        council shall be open to the public.
            ``(5) Election of officers.--Members of the consumer 
        advisory council shall elect their own officers.
            ``(6) Application of faca.--The Federal Advisory Committee 
        Act (5 U.S.C. App.) shall apply to the consumer advisory 
        council except that section 14 of such Act shall not apply.
    ``(l) Definitions.--In this section:
            ``(1) Appropriate committees of congress.--The term 
        `appropriate committees of Congress' means the Committee on 
        Ways and Means and the Committee on Energy and Commerce of the 
        House of Representatives and the Committee on Finance of the 
        Senate.
            ``(2) Commission; chairperson; member.--The terms 
        `Commission', `Chairperson', and `Member' mean the Medicare 
        Commission established under subsection (a) and the Chairperson 
        and any Member thereof, respectively.
            ``(3) Medicare.--The term `Medicare' means the program 
        established under this title, including parts A, B, C, and D.
            ``(4) Medicare beneficiary.--The term `Medicare 
        beneficiary' means an individual who is entitled to, or 
        enrolled for, benefits under part A or enrolled for benefits 
        under part B.
            ``(5) Medicare program spending.--The term `Medicare 
        program spending' means program spending under parts A, B, and 
        D net of premiums.
    ``(m) Funding.--
            ``(1) In general.--There are appropriated to the Commission 
        to carry out its duties and functions--
                    ``(A) for fiscal year 2012, $15,000,000; and
                    ``(B) for each subsequent fiscal year, the amount 
                appropriated under this paragraph for the previous 
                fiscal year increased by the annual percentage increase 
                in the Consumer Price Index for All Urban Consumers 
                (all items; United States city average) as of June of 
                the previous fiscal year.
            ``(2) From trust funds.--Sixty percent of amounts 
        appropriated under paragraph (1) shall be derived by transfer 
        from the Federal Hospital Insurance Trust Fund under section 
        1817 and 40 percent of amounts appropriated under such 
        paragraph shall be derived by transfer from the Federal 
        Supplementary Medical Insurance Trust Fund under section 
        1841.''.
            (2) Lobbying cooling-off period for members of the medicare 
        commission.--Section 207(c) of title 18, United States Code, is 
        amended by inserting at the end the following:
            ``(3) Members of the medicare commission.--
                    ``(A) In general.--Paragraph (1) shall apply to a 
                member of the Medicare Commission under section 1899A.
                    ``(B) Agencies and congress.--For purposes of 
                paragraph (1), the agency in which the individual 
                described in subparagraph (A) served shall be 
                considered to be the Medicare Commission, the 
                Department of Health and Human Services, and the 
                relevant committees of jurisdiction of Congress, 
                including the Committee on Ways and Means and the 
                Committee on Energy and Commerce of the House of 
                Representatives and the Committee on Finance of the 
                Senate.''.
    (b) GAO Study and Report on Determination and Implementation of 
Payment and Coverage Policies Under the Medicare Program.--
            (1) Initial study and report.--
                    (A) Study.--The Comptroller General of the United 
                States (in this section referred to as the 
                ``Comptroller General'') shall conduct a study on 
                changes to payment policies, methodologies, and rates 
                and coverage policies and methodologies under the 
                Medicare program under title XVIII of the Social 
                Security Act as a result of the recommendations 
                contained in the proposals made by the Medicare 
                Commission under section 1899A of such Act (as added by 
                subsection (a)), including an analysis of the effect of 
                such recommendations on--
                            (i) Medicare beneficiary access to 
                        providers and items and services;
                            (ii) the affordability of Medicare premiums 
                        and cost-sharing (including deductibles, 
                        coinsurance, and copayments);
                            (iii) the potential impact of changes on 
                        other government or private-sector purchasers 
                        and payers of care; and
                            (iv) quality of patient care, including 
                        patient experience, outcomes, and other 
                        measures of care.
                    (B) Report.--Not later than July 1, 2015, the 
                Comptroller General shall submit to Congress a report 
                containing the results of the study conducted under 
                subparagraph (A), together with recommendations for 
                such legislation and administrative action as the 
                Comptroller General determines appropriate.
            (2) Subsequent studies and reports.--The Comptroller 
        General shall periodically conduct such additional studies and 
        submit reports to Congress on changes to Medicare payments 
        policies, methodologies, and rates and coverage policies and 
        methodologies as the Comptroller General determines 
        appropriate, in consultation with the appropriate committees of 
        jurisdiction of Congress.
    (c) Conforming Amendments.--Section 1805(b) of the Social Security 
Act (42 U.S.C. 1395b-6(b)) is amended--
            (1) by redesignating paragraphs (4) through (8) as 
        paragraphs (5) through (9), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Review and comment on medicare commission or 
        secretarial proposal.--If the Medicare Commission (as 
        established under subsection (a) of section 1899A) or the 
        Secretary submits a proposal to the Commission under such 
        section in a year, the Commission shall review the proposal 
        and, not later than February 1 of that year, submit to the 
        appropriate committees of Congress written comments on such 
        proposal. Such comments may include such recommendations as the 
        Commission deems appropriate.''.

SEC. 3404. ENSURING MEDICARE SAVINGS ARE KEPT IN THE MEDICARE PROGRAM.

    No reduction in outlays under the Medicare program under title 
XVIII of the Social Security Act under the provisions of and amendments 
made by this Act may be utilized to offset any outlays under any other 
program or activity of the Federal government.

             Subtitle F--Comparative Effectiveness Research

SEC. 3501. COMPARATIVE EFFECTIVENESS RESEARCH.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by adding at the end the following new part:

              ``Part D--Comparative Effectiveness Research

                  ``comparative effectiveness research

    ``Sec. 1181.  (a) Definitions.--In this section:
            ``(1) Board.--The term `Board' means the Board of Governors 
        established under subsection (f).
            ``(2) Comparative clinical effectiveness research.--
                    ``(A) In general.--The term `comparative clinical 
                effectiveness research' means research evaluating and 
                comparing the clinical effectiveness, risks, and 
                benefits of 2 or more medical treatments, services, and 
                items described in subparagraph (B).
                    ``(B) Medical treatments, services, and items 
                described.--The medical treatments, services, and items 
                described in this subparagraph are health care 
                interventions, protocols for treatment, care 
                management, and delivery, procedures, medical devices, 
                diagnostic tools, pharmaceuticals (including drugs and 
                biologicals), and any other strategies or items being 
                used in the treatment, management, and diagnosis of, or 
                prevention of illness or injury in, patients.
            ``(3) Comparative effectiveness research.--The term 
        `comparative effectiveness research' means research evaluating 
        and comparing the implications and outcomes of 2 or more health 
        care strategies to address a particular medical condition for 
        specific patient populations.
            ``(4) Conflicts of interest.--The term `conflicts of 
        interest' means associations, including financial and personal, 
        that may be reasonably assumed to have the potential to bias an 
        individual's decisions in matters related to the Institute or 
        the conduct of activities under this section.
            ``(5) Institute.--The term `Institute' means the `Patient-
        Centered Outcomes Research Institute' established under 
        subsection (b)(1).
    ``(b) Patient-Centered Outcomes Research Institute.--
            ``(1) Establishment.--There is authorized to be established 
        a nonprofit corporation, to be known as the `Patient-Centered 
        Outcomes Research Institute' which is neither an agency nor 
        establishment of the United States Government.
            ``(2) Application of provisions.--The Institute shall be 
        subject to the provisions of this section, and, to the extent 
        consistent with this section, to the District of Columbia 
        Nonprofit Corporation Act.
            ``(3) Funding of comparative effectiveness research.--For 
        fiscal year 2010 and each subsequent fiscal year, amounts in 
        the Patient-Centered Outcomes Research Trust Fund (referred to 
        in this section as the `PCORTF') under section 9511 of the 
        Internal Revenue Code of 1986 shall be available, without 
        further appropriation, to the Institute to carry out this 
        section.
    ``(c) Purpose.--The purpose of the Institute is to assist patients, 
clinicians, purchasers, and policy-makers in making informed health 
decisions by advancing the quality and relevance of evidence concerning 
the manner in which diseases, disorders, and other health conditions 
can effectively and appropriately be prevented, diagnosed, treated, 
monitored, and managed through research and evidence synthesis that 
considers variations in patient subpopulations, and the dissemination 
of research findings with respect to the relative clinical outcomes, 
clinical effectiveness, and appropriateness of the medical treatments, 
services, and items described in subsection (a)(2)(B).
    ``(d) Duties.--
            ``(1) Identifying research priorities and establishing 
        research project agenda.--
                    ``(A) Identifying research priorities.--The 
                Institute shall identify national priorities for 
                comparative clinical effectiveness research, taking 
                into account factors, including--
                            ``(i) disease incidence, prevalence, and 
                        burden in the United States;
                            ``(ii) evidence gaps in terms of clinical 
                        outcomes;
                            ``(iii) practice variations, including 
                        variations in delivery and outcomes by 
                        geography, treatment site, provider type, and 
                        patient subgroup;
                            ``(iv) the potential for new evidence 
                        concerning certain categories of health care 
                        services or treatments to improve patient 
                        health and well-being and the quality of care;
                            ``(v) the effect or potential for an effect 
                        on health expenditures associated with a health 
                        condition or the use of a particular medical 
                        treatment, service, or item;
                            ``(vi) the effect or potential for an 
                        effect on patient needs, outcomes, and 
                        preferences, including quality of life; and
                            ``(vii) the relevance to assisting patients 
                        and clinicians in making informed health 
                        decisions.
                    ``(B) Establishing research project agenda.--
                            ``(i) In general.--The Institute shall 
                        establish and update a research project agenda 
                        for comparative clinical effectiveness research 
                        to address the priorities identified under 
                        subparagraph (A), taking into consideration the 
                        types of such research that might address each 
                        priority and the relative value (determined 
                        based on the cost of conducting such research 
                        compared to the potential usefulness of the 
                        information produced by such research) 
                        associated with the different types of 
                        research, and such other factors as the 
                        Institute determines appropriate.
                            ``(ii) Consideration of need to conduct a 
                        systematic review.--In establishing and 
                        updating the research project agenda under 
                        clause (i), the Institute shall consider the 
                        need to conduct a systematic review of existing 
                        research before providing for the conduct of 
                        new research under paragraph (2)(A).
            ``(2) Carrying out research project agenda.--
                    ``(A) Comparative clinical effectiveness 
                research.--In carrying out the research project agenda 
                established under paragraph (1)(B), the Institute shall 
                provide for the conduct of appropriate research and the 
                synthesis of evidence, in accordance with the 
                methodological standards adopted under paragraph (10), 
                using methods, including the following:
                            ``(i) Systematic reviews and assessments of 
                        existing research and evidence.
                            ``(ii) Primary research, such as randomized 
                        clinical trials, molecularly informed trials, 
                        and observational studies.
                            ``(iii) Any other methodologies recommended 
                        by the methodology committee established under 
                        paragraph (7) that are adopted by the Board 
                        under paragraph (10).
                    ``(B) Contracts for the management and conduct of 
                research.--
                            ``(i) In general.--The Institute may enter 
                        into contracts for the management and conduct 
                        of research in accordance with the research 
                        project agenda established under paragraph 
                        (1)(B) with the following:
                                    ``(I) Agencies and 
                                instrumentalities of the Federal 
                                Government that have experience in 
                                conducting comparative clinical 
                                effectiveness research, such as the 
                                Agency for Healthcare Research and 
                                Quality, to the extent that such 
                                contracts are authorized under the 
                                governing statutes of such agencies and 
                                instrumentalities.
                                    ``(II) Appropriate private sector 
                                research or study-conducting entities 
                                that have demonstrated the experience 
                                and capacity to achieve the goals of 
                                comparative effectiveness research.
                            ``(ii) Conditions for contracts.--A 
                        contract entered into under this subparagraph 
                        shall require that the agency, instrumentality, 
                        or other entity--
                                    ``(I) abide by the transparency and 
                                conflicts of interest requirements that 
                                apply to the Institute with respect to 
                                the research managed or conducted under 
                                such contract;
                                    ``(II) comply with the 
                                methodological standards adopted under 
                                paragraph (10) with respect to such 
                                research;
                                    ``(III) take into consideration 
                                public comments on the study design 
                                that are transmitted by the Institute 
                                to the agency, instrumentality, or 
                                other entity under subsection (i)(1)(B) 
                                during the finalization of the study 
                                design and transmit responses to such 
                                comments to the Institute, which will 
                                publish such comments, responses, and 
                                finalized study design in accordance 
                                with subsection (i)(3)(A)(iii) prior to 
                                the conduct of such research;
                                    ``(IV) in the case where the 
                                agency, instrumentality, or other 
                                entity is managing or conducting a 
                                comparative effectiveness research 
                                study for a rare disease, consult with 
                                the expert advisory panel for rare 
                                disease appointed under paragraph 
                                (5)(A)(iii) with respect to such 
                                research study; and
                                    ``(V) subject to clause (iv), 
                                permit a researcher who conducts 
                                original research under the contract 
                                for the agency, instrumentality, or 
                                other entity to have such research 
                                published in a peer-reviewed journal or 
                                other publication.
                            ``(iii) Coverage of copayments or 
                        coinsurance.--A contract entered into under 
                        this subparagraph may allow for the coverage of 
                        copayments or coinsurance, or allow for other 
                        appropriate measures, to the extent that such 
                        coverage or other measures are necessary to 
                        preserve the validity of a research project, 
                        such as in the case where the research project 
                        must be blinded.
                            ``(iv) Requirements for publication of 
                        research.--
                                    ``(I) In general.--Any research 
                                published under clause (ii)(V) shall be 
                                within the bounds of and entirely 
                                consistent with the evidence and 
                                findings produced under the contract 
                                with the Institute under this 
                                subparagraph and disseminated by the 
                                Institute under paragraph (9).
                                    ``(II) Limitation on contracting 
                                with certain agencies, 
                                instrumentalities, and entities.--In 
                                the case where the Institute determines 
                                that such published research does not 
                                meet the requirements under subclause 
                                (I), the Institute shall not enter into 
                                another contract with the agency, 
                                instrumentality, or entity which 
                                managed or conducted such research 
                                under a contract under this 
                                subparagraph for a period determined 
                                appropriate by the Institute (but not 
                                less than 5 years).
                    ``(C) Review and update of evidence.--The Institute 
                shall review and update evidence on a periodic basis, 
                in order to take into account new research, evolving 
                evidence, advances in medical technology, and changes 
                in the standard of care as they become available, as 
                appropriate.
                    ``(D) Taking into account potential differences.--
                Research shall--
                            ``(i) be designed, as appropriate, to take 
                        into account the potential for differences in 
                        the effectiveness of health care treatments, 
                        services, and items as used with various 
                        subpopulations, such as racial and ethnic 
                        minorities, women, age, and groups of 
                        individuals with different comorbidities, 
                        genetic and molecular sub-types, or quality of 
                        life preferences; and
                            ``(ii) include members of such 
                        subpopulations as subjects in the research as 
                        feasible and appropriate.
                    ``(E) Differences in treatment modalities.--
                Research shall be designed, as appropriate, to take 
                into account different characteristics of treatment 
                modalities that may affect research outcomes, such as 
                the phase of the treatment modality in the innovation 
                cycle and the impact of the skill of the operator of 
                the treatment modality.
            ``(3) Study and report on feasibility of conducting 
        research in-house.--
                    ``(A) Study.--The Institute shall conduct a study 
                on the feasibility of conducting research in-house.
                    ``(B) Report.--Not later than 5 years after the 
                date of enactment of this section, the Institute shall 
                submit a report to Congress containing the results of 
                the study conducted under subparagraph (A).
            ``(4) Data collection.--
                    ``(A) In general.--The Secretary shall, with 
                appropriate safeguards for privacy, make available to 
                the Institute such data collected by the Centers for 
                Medicare & Medicaid Services under the programs under 
                titles XVIII, XIX, and XXI as the Institute may require 
                to carry out this section. The Institute may also 
                request and, if such request is granted, obtain data 
                from Federal, State, or private entities, including 
                data from clinical databases and registries.
                    ``(B) Use of data.--The Institute shall only use 
                data provided to the Institute under subparagraph (A) 
                in accordance with laws and regulations governing the 
                release and use of such data, including applicable 
                confidentiality and privacy standards.
            ``(5) Appointing expert advisory panels.--
                    ``(A) Appointment.--
                            ``(i) In general.--The Institute shall, as 
                        appropriate, appoint expert advisory panels to 
                        assist in identifying research priorities and 
                        establishing the research project agenda under 
                        paragraph (1). Panels shall advise the 
                        Institute in matters such as identifying gaps 
                        in and updating medical evidence in order to 
                        ensure that the information produced from such 
                        research is clinically relevant to decisions 
                        made by clinicians and patients at the point of 
                        care.
                            ``(ii) Expert advisory panels for primary 
                        research.--The Institute shall appoint expert 
                        advisory panels in carrying out the research 
                        project agenda under paragraph (2)(A)(ii). Such 
                        expert advisory panels shall, upon request, 
                        advise the Institute and the agency, 
                        instrumentality, or entity conducting the 
                        research on the research question involved and 
                        the research design or protocol, including the 
                        appropriate comparator technologies, important 
                        patient subgroups, and other parameters of the 
                        research, as necessary. Upon the request of 
                        such agency, instrumentality, or entity, such 
                        panels shall be available as a resource for 
                        technical questions that may arise during the 
                        conduct of such research.
                            ``(iii) Expert advisory panel for rare 
                        disease.--In the case of a comparative 
                        effectiveness research study for rare disease, 
                        the Institute shall appoint an expert advisory 
                        panel for purposes of assisting in the design 
                        of such research study and determining the 
                        relative value and feasibility of conducting 
                        such research study.
                    ``(B) Composition.--
                            ``(i) In general.--An expert advisory panel 
                        appointed under subparagraph (A) shall include 
                        individuals who have experience in the relevant 
                        topic, project, or category for which the panel 
                        is established, including--
                                    ``(I) practicing and research 
                                clinicians (including relevant 
                                specialists and subspecialists), 
                                patients, and representatives of 
                                patients; and
                                    ``(II) experts in scientific and 
                                health services research, health 
                                services delivery, and evidence-based 
                                medicine.
                            ``(ii) Inclusion of representatives of 
                        manufacturers of medical technology.--An expert 
                        advisory panel appointed under subparagraph (A) 
                        may include a representative of each 
                        manufacturer of each medical technology that is 
                        included under the relevant topic, project, or 
                        category for which the panel is established.
            ``(6) Supporting patient and consumer representatives.--The 
        Institute shall provide support and resources to help patient 
        and consumer representatives on the Board and expert advisory 
        panels appointed by the Institute under paragraph (5) to 
        effectively participate in technical discussions regarding 
        complex research topics. Such support shall include initial and 
        continuing education to facilitate effective engagement in 
        activities undertaken by the Institute and may include regular 
        and ongoing opportunities for patient and consumer 
        representatives to interact with each other and to exchange 
        information and support regarding their involvement in the 
        Institute's activities. The Institute shall provide per diem 
        and other appropriate compensation to patient and consumer 
        representatives for their time spent participating in the 
        activities of the Institute under this paragraph.
            ``(7) Establishing methodology committee.--
                    ``(A) In general.--The Institute shall establish a 
                standing methodology committee to carry out the 
                functions described in subparagraph (C).
                    ``(B) Appointment and composition.--The methodology 
                committee established under subparagraph (A) shall be 
                composed of not more than 17 members appointed by the 
                Comptroller General of the United States. Members 
                appointed to the methodology committee shall be experts 
                in their scientific field, such as health services 
                research, clinical research, comparative effectiveness 
                research, biostatistics, genomics, and research 
                methodologies. Stakeholders with such expertise may be 
                appointed to the methodology committee.
                    ``(C) Functions.--Subject to subparagraph (D), the 
                methodology committee shall work to develop and improve 
                the science and methods of comparative effectiveness 
                research by undertaking, directly or through 
                subcontract, the following activities:
                            ``(i) Not later than 2 years after the date 
                        on which the members of the methodology 
                        committee are appointed under subparagraph (B), 
                        developing and periodically updating the 
                        following:
                                    ``(I) Establish and maintain 
                                methodological standards for 
                                comparative clinical effectiveness 
                                research on major categories of 
                                interventions to prevent, diagnose, or 
                                treat a clinical condition or improve 
                                the delivery of care. Such 
                                methodological standards shall provide 
                                specific criteria for internal 
                                validity, generalizability, 
                                feasibility, and timeliness of such 
                                research and for clinical outcomes 
                                measures, risk adjustment, and other 
                                relevant aspects of research and 
                                assessment with respect to the design 
                                of such research. Any methodological 
                                standards developed and updated under 
                                this subclause shall be scientifically 
                                based and include methods by which new 
                                information, data, or advances in 
                                technology are considered and 
                                incorporated into ongoing research 
                                projects by the Institute, as 
                                appropriate. The process for developing 
                                and updating such standards shall 
                                include input from relevant experts, 
                                stakeholders, and decisionmakers, and 
                                shall provide opportunities for public 
                                comment. Such standards shall also 
                                include methods by which patient 
                                subpopulations can be accounted for and 
                                evaluated in different types of 
                                research. As appropriate, such 
                                standards shall build on existing work 
                                on methodological standards for defined 
                                categories of health interventions and 
                                for each of the major categories of 
                                comparative effectiveness research 
                                methods (determined as of the date of 
                                enactment of the America's Healthy 
                                Future Act of 2009).
                                    ``(II) A translation table that is 
                                designed to provide guidance and act as 
                                a reference for the Board to determine 
                                research methods that are most likely 
                                to address each specific comparative 
                                clinical effectiveness research 
                                question.
                            ``(ii) Not later than 3 years after such 
                        date, examining the following:
                                    ``(I) Methods by which various 
                                aspects of the health care delivery 
                                system (such as benefit design and 
                                performance, and health services 
                                organization, management, information 
                                communication, and delivery) could be 
                                assessed and compared for their 
                                relative effectiveness, benefits, 
                                risks, advantages, and disadvantages in 
                                a scientifically valid and standardized 
                                way.
                                    ``(II) Methods by which efficiency 
                                and value (including the full range of 
                                harms and benefits, such as quality of 
                                life) could be assessed in a 
                                scientifically valid and standardized 
                                way.
                    ``(D) Consultation and conduct of examinations.--
                            ``(i) In general.--Subject to clause (iii), 
                        in undertaking the activities described in 
                        subparagraph (C), the methodology committee 
                        shall--
                                    ``(I) consult or contract with 1 or 
                                more of the entities described in 
                                clause (ii); and
                                    ``(II) consult with stakeholders 
                                and other entities knowledgeable in 
                                relevant fields, as appropriate.
                            ``(ii) Entities described.--The following 
                        entities are described in this clause:
                                    ``(I) The Institute of Medicine of 
                                the National Academies.
                                    ``(II) The Agency for Healthcare 
                                Research and Quality.
                                    ``(III) The National Institutes of 
                                Health.
                                    ``(IV) Academic, non-profit, or 
                                other private entities with relevant 
                                expertise.
                            ``(iii) Conduct of examinations.--The 
                        methodology committee shall contract with the 
                        Institute of Medicine of the National Academies 
                        for the conduct of the examinations described 
                        in subclauses (I) and (II) of subparagraph 
                        (C)(ii).
                    ``(E) Reports.--The methodology committee shall 
                submit reports to the Board on the committee's 
                performance of the functions described in subparagraph 
                (C). Reports submitted under the preceding sentence 
                with respect to the functions described in clause (i) 
                of such subparagraph shall contain recommendations--
                            ``(i) for the Institute to adopt 
                        methodological standards developed and updated 
                        by the methodology committee under such 
                        subparagraph; and
                            ``(ii) for such other action as the 
                        methodology committee determines is necessary 
                        to comply with such methodological standards.
            ``(8) Providing for a peer-review process for primary 
        research.--
                    ``(A) In general.--The Institute shall ensure that 
                there is a process for peer review of the research 
                conducted under paragraph (2)(A)(ii). Under such 
                process--
                            ``(i) evidence from research conducted 
                        under such paragraph shall be reviewed to 
                        assess scientific integrity and adherence to 
                        methodological standards adopted under 
                        paragraph (10); and
                            ``(ii) a list of the names of individuals 
                        contributing to any peer-review process during 
                        the preceding year or years shall be made 
                        public and included in annual reports in 
                        accordance with paragraph (12)(D).
                    ``(B) Composition.--Such peer-review process shall 
                be designed in a manner so as to avoid bias and 
                conflicts of interest on the part of the reviewers and 
                shall be composed of experts in the scientific field 
                relevant to the research under review.
                    ``(C) Use of existing processes.--
                            ``(i) Processes of another entity.--In the 
                        case where the Institute enters into a contract 
                        or other agreement with another entity for the 
                        conduct or management of research under this 
                        section, the Institute may utilize the peer-
                        review process of such entity if such process 
                        meets the requirements under subparagraphs (A) 
                        and (B).
                            ``(ii) Processes of appropriate medical 
                        journals.--The Institute may utilize the peer-
                        review process of appropriate medical journals 
                        if such process meets the requirements under 
                        subparagraphs (A) and (B).
            ``(9) Dissemination of research findings.--
                    ``(A) In general.--The Institute shall disseminate 
                research findings to clinicians, patients, and the 
                general public in accordance with the dissemination 
                protocols and strategies adopted under paragraph (10). 
                Research findings disseminated--
                            ``(i) shall convey findings of research so 
                        that they are comprehensible and useful to 
                        patients and providers in making health care 
                        decisions;
                            ``(ii) shall discuss findings and other 
                        considerations specific to certain 
                        subpopulations, risk factors, and 
                        comorbidities, as appropriate;
                            ``(iii) shall include considerations such 
                        as limitations of research and what further 
                        research may be needed, as appropriate;
                            ``(iv) shall not include practice 
                        guidelines, coverage recommendations, or policy 
                        recommendations; and
                            ``(v) shall not include any data the 
                        dissemination of which would violate the 
                        privacy of research participants or violate any 
                        confidentiality agreements made with respect to 
                        the use of data under this section.
                    ``(B) Dissemination protocols and strategies.--The 
                Institute shall develop protocols and strategies for 
                the appropriate dissemination of research findings in 
                order to ensure effective communication of such 
                findings and the use and incorporation of such findings 
                into relevant activities for the purpose of informing 
                higher quality and more effective and timely decisions 
                regarding medical treatments, services, and items. In 
                developing and adopting such protocols and strategies, 
                the Institute shall consult with stakeholders, 
                including practicing clinicians and patients, 
                concerning the types of dissemination that will be most 
                useful to the end users of the information and may 
                provide for the utilization of multiple formats for 
                conveying findings to different audiences.
                    ``(C) Definition of research findings.--In this 
                paragraph, the term `research findings' means the 
                results of a study or assessment.
            ``(10) Adoption.--Subject to subsection (i)(1)(A)(i), the 
        Institute shall adopt the national priorities identified under 
        paragraph (1)(A), the research project agenda established under 
        paragraph (1)(B), the methodological standards developed and 
        updated by the methodology committee under paragraph (7)(C)(i), 
        any peer-review process provided under paragraph (8), and 
        dissemination protocols and strategies developed under 
        paragraph (9)(B) by majority vote. In the case where the 
        Institute does not adopt such national priorities, research 
        project agenda, methodological standards, peer-review process, 
        or dissemination protocols and strategies in accordance with 
        the preceding sentence, the national priorities, research 
        project agenda, methodological standards, peer-review process, 
        or dissemination protocols and strategies shall be referred to 
        the appropriate staff or entity within the Institute (or, in 
        the case of the methodological standards, the methodology 
        committee) for further review.
            ``(11) Coordination of research and resources and building 
        capacity for research.--
                    ``(A) Coordination of research and resources.--The 
                Institute shall coordinate research conducted, 
                commissioned, or otherwise funded under this section 
                with comparative clinical effectiveness and other 
                relevant research and related efforts conducted by 
                public and private agencies and organizations in order 
                to ensure the most efficient use of the Institute's 
                resources and that research is not duplicated 
                unnecessarily.
                    ``(B) Building capacity for research.--The 
                Institute may build capacity for comparative clinical 
                effectiveness research and methodologies, including 
                research training and development of data resources 
                (such as clinical registries), through appropriate 
                activities, including using up to 20 percent of the 
                amounts appropriated or credited to the PCORTF under 
                section 9511(b) of the Internal Revenue Code of 1986 
                with respect to a fiscal year to fund extramural 
                efforts of organizations such as the Cochrane 
                Collaboration (or a successor organization) and other 
                organizations (including public-private partnerships) 
                in order to develop and maintain a comprehensive, 
                interoperable data network to collect, link, and 
                analyze data on outcomes and effectiveness from 
                multiple sources, including electronic health records.
                    ``(C) Inclusion in annual reports.--The Institute 
                shall report on any coordination and capacity building 
                conducted under this paragraph in annual reports in 
                accordance with paragraph (12)(E).
            ``(12) Annual reports.--The Institute shall submit an 
        annual report to Congress and the President, and shall make the 
        annual report available to the public. Such report shall 
        contain--
                    ``(A) a description of the activities conducted 
                under this section during the preceding year, including 
                the use of amounts appropriated or credited to the 
                PCORTF under section 9511(b) of the Internal Revenue 
                Code of 1986 to carry out this section, research 
                projects completed and underway, and a summary of the 
                findings of such projects;
                    ``(B) the research project agenda and budget of the 
                Institute for the following year;
                    ``(C) a description of research priorities 
                identified under paragraph (1)(A), dissemination 
                protocols and strategies developed by the Institute 
                under paragraph (9)(B), and methodological standards 
                developed and updated by the methodology committee 
                under paragraph (7)(C)(i) that are adopted under 
                paragraph (10) during the preceding year;
                    ``(D) the names of individuals contributing to any 
                peer-review process provided under paragraph (8) during 
                the preceding year or years, in a manner such that 
                those individuals cannot be identified with a 
                particular research project;
                    ``(E) a description of efforts by the Institute 
                under paragraph (11) to--
                            ``(i) coordinate the research conducted, 
                        commissioned, or otherwise funded under this 
                        section and the resources of the Institute with 
                        research and related efforts conducted by other 
                        private and public entities; and
                            ``(ii) build capacity for comparative 
                        clinical effectiveness research and other 
                        relevant research and related efforts through 
                        appropriate activities; and
                    ``(F) any other relevant information (including 
                information on the membership of the Board, expert 
                advisory panels appointed under paragraph (5), the 
                methodology committee established under paragraph (7), 
                and the executive staff of the Institute, any conflicts 
                of interest with respect to the members of such Board, 
                expert advisory panels, and methodology committee, or 
                with respect to any individuals selected for employment 
                as executive staff of the Institute, and any bylaws 
                adopted by the Board during the preceding year).
    ``(e) Administration.--
            ``(1) In general.--Subject to paragraph (2), the Board 
        shall carry out the duties of the Institute.
            ``(2) Nondelegable duties.--The activities described in 
        subsections (d)(1) and (d)(10) are nondelegable.
    ``(f) Board of Governors.--
            ``(1) In general.--The Institute shall have a Board of 
        Governors, which shall consist of 15 members appointed by the 
        Comptroller General of the United States not later than 6 
        months after the date of enactment of this section, as follows:
                    ``(A) 3 members representing patients and health 
                care consumers.
                    ``(B) 3 members representing practicing physicians, 
                including surgeons.
                    ``(C) 3 members representing private payers, of 
                whom at least 1 member shall represent health insurance 
                issuers and at least 1 member shall represent employers 
                who self-insure employee benefits.
                    ``(D) 3 members representing pharmaceutical, 
                device, and diagnostic manufacturers or developers.
                    ``(E) 1 member representing nonprofit organizations 
                involved in health services research.
                    ``(F) 1 member representing organizations that 
                focus on quality measurement and improvement or 
                decision support.
                    ``(G) 1 member representing independent health 
                services researchers.
            ``(2) Qualifications.--
                    ``(A) Diverse representation of perspectives.--The 
                Board shall represent a broad range of perspectives and 
                collectively have scientific expertise in clinical 
                health sciences research, including epidemiology, 
                decisions sciences, health economics, and statistics.
                    ``(B) Conflicts of interest.--
                            ``(i) In general.--In appointing members of 
                        the Board, the Comptroller General of the 
                        United States shall take into consideration any 
                        conflicts of interest of potential appointees. 
                        Any conflicts of interest of members appointed 
                        to the Board shall be disclosed in accordance 
                        with subsection (i)(4)(B).
                            ``(ii) Recusal.--A member of the Board 
                        shall be recused from participating with 
                        respect to a particular research project or 
                        other matter considered by the Board in 
                        carrying out its research project agenda under 
                        subsection (d)(2) in the case where the member 
                        (or an immediate family member of such member) 
                        has a financial or personal interest directly 
                        related to the research project or the matter 
                        that could affect or be affected by such 
                        participation.
            ``(3) Terms.--
                    ``(A) In general.--A member of the Board shall be 
                appointed for a term of 6 years, except with respect to 
                the members first appointed--
                            ``(i) 6 shall be appointed for a term of 6 
                        years;
                            ``(ii) 6 shall be appointed for a term of 4 
                        years; and
                            ``(iii) 6 shall be appointed for a term of 
                        2 years.
                    ``(B) Limitation.--No individual shall be appointed 
                to the Board for more than 2 terms.
                    ``(C) Expiration of term.--Any member of the Board 
                whose term has expired may serve until such member's 
                successor has taken office, or until the end of the 
                calendar year in which such member's term has expired, 
                whichever is earlier.
                    ``(D) Vacancies.--
                            ``(i) In general.--Any member appointed to 
                        fill a vacancy prior to the expiration of the 
                        term for which such member's predecessor was 
                        appointed shall be appointed for the remainder 
                        of such term.
                            ``(ii) Vacancies not to affect power of 
                        board.--A vacancy on the Board shall not affect 
                        its powers, but shall be filled in the same 
                        manner as the original appointment was made.
            ``(4) Chairperson and vice-chairperson.--
                    ``(A) In general.--The Comptroller General of the 
                United States shall designate a Chairperson and Vice-
                Chairperson of the Board from among the members of the 
                Board.
                    ``(B) Term.--The members so designated shall serve 
                as Chairperson and Vice-Chairperson of the Board for a 
                period of 3 years.
            ``(5) Compensation.--
                    ``(A) In general.--A member of the Board shall be 
                entitled to compensation at the per diem equivalent of 
                the rate provided for level IV of the Executive 
                Schedule under section 5315 of title 5, United States 
                Code.
                    ``(B) Travel expenses.--While away from home or 
                regular place of business in the performance of duties 
                for the Board, each member of the Board may receive 
                reasonable travel, subsistence, and other necessary 
                expenses.
            ``(6) Director and staff; experts and consultants.--The 
        Board may--
                    ``(A) employ and fix the compensation of an 
                executive director and such other personnel as may be 
                necessary to carry out the duties of the Institute;
                    ``(B) seek such assistance and support as may be 
                required in the performance of the duties of the 
                Institute from appropriate departments and agencies of 
                the Federal Government;
                    ``(C) enter into contracts or make other 
                arrangements and make such payments as may be necessary 
                for performance of the duties of the Institute;
                    ``(D) provide travel, subsistence, and per diem 
                compensation for individuals performing the duties of 
                the Institute, including members of any expert advisory 
                panel appointed under subsection (d)(5), members of the 
                methodology committee established under subsection 
                (d)(7), and individuals selected to contribute to any 
                peer-review process under subsection (d)(8); and
                    ``(E) prescribe such rules, regulations, and bylaws 
                as the Board determines necessary with respect to the 
                internal organization and operation of the Institute.
            ``(7) Meetings and hearings.--The Board shall meet and hold 
        hearings at the call of the Chairperson or a majority of its 
        members. In the case where the Board is meeting on matters not 
        related to personnel, Board meetings shall be open to the 
        public and advertised through public notice at least 7 days 
        prior to the meeting.
            ``(8) Quorum.--A majority of the members of the Board shall 
        constitute a quorum for purposes of conducting the duties of 
        the Institute, but a lesser number of members may meet and hold 
        hearings.
    ``(g) Financial Oversight.--
            ``(1) Contract for audit.--The Institute shall provide for 
        the conduct of financial audits of the Institute on an annual 
        basis by a private entity with expertise in conducting 
        financial audits.
            ``(2) Review of audit and report to congress.--The 
        Comptroller General of the United States shall--
                    ``(A) review the results of the audits conducted 
                under paragraph (1); and
                    ``(B) submit a report to Congress containing the 
                results of such audits and review.
    ``(h) Governmental Oversight.--
            ``(1) Review and reports.--
                    ``(A) In general.--The Comptroller General of the 
                United States shall review the following:
                            ``(i) Processes established by the 
                        Institute, including those with respect to the 
                        identification of research priorities under 
                        subsection (d)(1)(A) and the conduct of 
                        research projects under this section. Such 
                        review shall determine whether information 
                        produced by such research projects--
                                    ``(I) is objective and credible;
                                    ``(II) is produced in a manner 
                                consistent with the requirements under 
                                this section; and
                                    ``(III) is developed through a 
                                transparent process.
                            ``(ii) The overall effect of the Institute 
                        and the effectiveness of activities conducted 
                        under this section, including an assessment 
                        of--
                                    ``(I) the utilization of the 
                                findings of research conducted under 
                                this section by health care 
                                decisionmakers; and
                                    ``(II) the effect of the Institute 
                                and such activities on innovation and 
                                on the health economy of the United 
                                States.
                    ``(B) Reports.--Not later than 5 years after the 
                date of enactment of this section, and not less 
                frequently than every 5 years thereafter, the 
                Comptroller General of the United States shall submit a 
                report to Congress containing the results of the review 
                conducted under subparagraph (A), together with 
                recommendations for such legislation and administrative 
                action as the Comptroller General determines 
                appropriate.
            ``(2) Funding assessment.--
                    ``(A) In general.--The Comptroller General of the 
                United States shall assess the adequacy and use of 
                funding for the Institute and activities conducted 
                under this section under the PCORTF under section 9511 
                of the Internal Revenue Code of 1986. Such assessment 
                shall include a determination as to whether, based on 
                the utilization of findings by public and private 
                payers, each of the following are appropriate sources 
                of funding for the Institute, including a determination 
                of whether such sources of funding should be continued 
                or adjusted, or whether other sources of funding not 
                described in clauses (i) through (iii) would be 
                appropriate:
                            ``(i) The transfer of funds from the 
                        Federal Hospital Insurance Trust Fund under 
                        section 1817 and the Federal Supplementary 
                        Medical Insurance Trust Fund under section 1841 
                        to the PCORTF under section 1183.
                            ``(ii) The amounts appropriated under 
                        subparagraphs (A), (B), (C), (D)(ii), and 
                        (E)(ii) of subsection (b)(1) of such section 
                        9511.
                            ``(iii) Private sector contributions under 
                        subparagraphs (D)(i) and (E)(i) of such 
                        subsection (b)(1).
                    ``(B) Report.--Not later than 8 years after the 
                date of enactment of this section, the Comptroller 
                General of the United States shall submit a report to 
                Congress containing the results of the assessment 
                conducted under subparagraph (A), together with 
                recommendations for such legislation and administrative 
                action as the Comptroller General determines 
                appropriate.
    ``(i) Ensuring Transparency, Credibility, and Access.--The 
Institute shall establish procedures to ensure that the following 
requirements for ensuring transparency, credibility, and access are 
met:
            ``(1) Public comment periods.--
                    ``(A) In general.--The Institute shall provide for 
                a public comment period of not less than 45 and not 
                more than 60 days at the following times:
                            ``(i) Prior to the adoption of the national 
                        priorities identified under subsection 
                        (d)(1)(A), the research project agenda 
                        established under subsection (d)(1)(B), the 
                        methodological standards developed and updated 
                        by the methodology committee under subsection 
                        (d)(7)(C)(i), the peer-review process generally 
                        provided under subsection (d)(8), and 
                        dissemination protocols and strategies 
                        developed by the Institute under subsection 
                        (d)(9)(B) in accordance with subsection 
                        (d)(10).
                            ``(ii) Prior to the finalization of 
                        individual study designs.
                            ``(iii) After the release of draft findings 
                        with respect to a systematic review and 
                        assessment of existing research and evidence 
                        under subsection (d)(2)(A)(i).
                    ``(B) Transmission of public comments on study 
                design.--The Institute shall transmit public comments 
                submitted during the public comment period described in 
                subparagraph (A)(ii) to the entity conducting research 
                with respect to which the individual study design is 
                being finalized.
            ``(2) Additional forums.--The Institute shall, in addition 
        to the public comment periods described in paragraph (1)(A), 
        support forums to increase public awareness and obtain and 
        incorporate public input and feedback through media (such as an 
        Internet website) on the following:
                    ``(A) The identification of research priorities, 
                including research topics, and the establishment of the 
                research project agenda under subparagraphs (A) and 
                (B), respectively, of subsection (d)(1).
                    ``(B) Research findings.
                    ``(C) Any other duties, activities, or processes 
                the Institute determines appropriate.
            ``(3) Public availability.--The Institute shall make 
        available to the public and disclose through the official 
        public Internet website of the Institute, and through other 
        forums and media the Institute determines appropriate, the 
        following:
                    ``(A) The process and methods for the conduct of 
                research under this section, including--
                            ``(i) the identity of the entity conducting 
                        such research;
                            ``(ii) any links the entity has to industry 
                        (including such links that are not directly 
                        tied to the particular research being conducted 
                        under this section);
                            ``(iii) draft study designs (including 
                        research questions and the finalized study 
                        design, together with public comments on such 
                        study design and responses to such comments);
                            ``(iv) research protocols (including 
                        measures taken, methods of research, methods of 
                        analysis, research results, and such other 
                        information as the Institute determines 
                        appropriate) with respect to each medical 
                        treatment, service, and item described in 
                        subsection (a)(2)(B);
                            ``(v) any key decisions made by the 
                        Institute and any appropriate committees of the 
                        Institute;
                            ``(vi) the identity of investigators 
                        conducting such research and any conflicts of 
                        interest of such investigators; and
                            ``(vii) any progress reports the Institute 
                        determines appropriate.
                    ``(B) Notice of each of the public comment periods 
                under paragraph (1)(A), including deadlines for public 
                comments for such periods.
                    ``(C) Public comments submitted during each of the 
                public comment periods under paragraph (1)(A), 
                including such public comments submitted on draft 
                findings under clause (iii) of such paragraph.
                    ``(D) Bylaws, processes, and proceedings of the 
                Institute, to the extent practicable and as the 
                Institute determines appropriate.
                    ``(E) Not later than 90 days after receipt by the 
                Institute of a relevant report or research findings, 
                appropriate information contained in such report or 
                findings.
            ``(4) Conflicts of interest.--The Institute shall--
                    ``(A) in appointing members to an expert advisory 
                panel under subsection (d)(5) and the methodology 
                committee under subsection (d)(7), and in selecting 
                individuals to contribute to any peer-review process 
                under subsection (d)(8) and for employment as executive 
                staff of the Institute, take into consideration any 
                conflicts of interest of potential appointees, 
                participants, and staff; and
                    ``(B) include a description of any such conflicts 
                of interest and conflicts of interest of Board members 
                in the annual report under subsection (d)(12), except 
                that, in the case of individuals contributing to any 
                such peer review process, such description shall be in 
                a manner such that those individuals cannot be 
                identified with a particular research project.
    ``(j) Rules.--
            ``(1) Gifts.--The Institute, or the Board and staff of the 
        Institute acting on behalf of the Institute, may not accept 
        gifts, bequeaths, or donations of services or property.
            ``(2) Establishment and prohibition on accepting outside 
        funding or contributions.--The Institute may not--
                    ``(A) establish a corporation other than as 
                provided under this section; or
                    ``(B) accept any funds or contributions other than 
                as provided under this part.
    ``(k) Rules of Construction.--
            ``(1) Coverage.--Nothing in this section shall be 
        construed--
                    ``(A) to permit the Institute to mandate coverage, 
                reimbursement, or other policies for any public or 
                private payer; or
                    ``(B) as preventing the Secretary from covering the 
                routine costs of clinical care received by an 
                individual entitled to, or enrolled for, benefits under 
                title XVIII, XIX, or XXI in the case where such 
                individual is participating in a clinical trial and 
                such costs would otherwise be covered under such title 
                with respect to the beneficiary.
            ``(2) Reports and findings.--None of the reports submitted 
        under this section or research findings disseminated by the 
        Institute shall be construed as mandates, guidelines, or 
        recommendations for payment, coverage, or treatment.

  ``limitations on certain uses of comparative effectiveness research

    ``Sec. 1182.  (a) The Secretary may only use evidence and findings 
from comparative effectiveness research conducted under section 1181 to 
make a determination regarding coverage under title XVIII if such use 
is through an iterative and transparent process which meets the 
following requirements:
            ``(1) Stakeholders and other individuals have the 
        opportunity to provide informed and relevant information with 
        respect to the determination.
            ``(2) Stakeholders and other individuals have the 
        opportunity to review draft proposals of the determination and 
        submit public comments with respect to such draft proposals.
            ``(3) In making the determination, the Secretary 
        considers--
                    ``(A) other relevant evidence, studies, and 
                research in addition to such comparative effectiveness 
                research; and
                    ``(B) evidence and research that demonstrates or 
                suggests a benefit of coverage with respect to a 
                specific subpopulation of individuals, even if the 
                evidence and findings from the comparative 
                effectiveness research demonstrates or suggests that, 
                on average, with respect to the general population the 
                benefits of coverage do not exceed the harm.
    ``(b) Nothing in this section shall be construed as--
            ``(1) superceding or modifying the coverage of items or 
        services under title XVIII that the Secretary determines are 
        reasonable and necessary under section 1862(l)(1); or
            ``(2) authorizing the Secretary to deny coverage of items 
        or services under such title solely on the basis of comparative 
        effectiveness research.
    ``(c)(1) The Secretary shall not use evidence or findings from 
comparative effectiveness research conducted under section 1181 in 
determining coverage, reimbursement, or incentive programs under title 
XVIII in a manner that treats extending the life of an elderly, 
disabled, or terminally ill individual as of lower value than extending 
the life of an individual who is younger, nondisabled, or not 
terminally ill.
    ``(2) Paragraph (1) shall not be construed as preventing the 
Secretary from using evidence or findings from such comparative 
effectiveness research in determining coverage, reimbursement, or 
incentive programs under title XVIII based upon a comparison of the 
difference in the effectiveness of alternative treatments in extending 
an individual's life due to the individual's age, disability, or 
terminal illness.
    ``(d)(1) The Secretary shall not use evidence or findings from 
comparative effectiveness research conducted under section 1181 in 
determining coverage, reimbursement, or incentive programs under title 
XVIII in a manner that precludes, or with an intent to discourage, an 
individual from choosing a health care treatment based on how the 
individual values the tradeoff between extending the length of their 
life and the risk of disability.
    ``(2)(A) Paragraph (1) shall not be construed to--
            ``(i) limit the application of differential copayments 
        under title XVIII based on factors such as cost or type of 
        service; or
            ``(ii) prevent the Secretary from using evidence or 
        findings from such comparative effectiveness research in 
        determining coverage, reimbursement, or incentive programs 
        under such title based upon a comparison of the difference in 
        the effectiveness of alternative health care treatments in 
        extending an individual's life due to that individual's age, 
        disability, or terminal illness.
    ``(3) Nothing in the provisions of, or amendments made by the 
America's Healthy Future Act of 2009, shall be construed to limit 
comparative effectiveness research or any other research, evaluation, 
or dissemination of information concerning the likelihood that a health 
care treatment will result in disability.
    ``(e)(1) The Patient-Centered Outcomes Research Institute 
established under section 1181(b)(1) shall not develop or employ a 
dollars-per-quality adjusted life year (or similar measure that 
discounts the value of a life because of an individual's disability) as 
a threshold to establish what type of health care is cost effective or 
recommended.
    ``(2) The Secretary shall not utilize such an adjusted life year 
(or such a similar measure) as a threshold to determine coverage, 
reimbursement, or incentive programs under title XVIII.

``trust fund transfers to patient-centered outcomes research trust fund

    ``Sec. 1183.  (a) In General.--The Secretary shall provide for the 
transfer, from the Federal Hospital Insurance Trust Fund under section 
1817 and the Federal Supplementary Medical Insurance Trust Fund under 
section 1841, in proportion (as estimated by the Secretary) to the 
total expenditures during such fiscal year that are made under title 
XVIII from the respective trust fund, to the Patient-Centered Outcomes 
Research Trust Fund (referred to in this section as the `PCORTF') under 
section 9511 of the Internal Revenue Code of 1986, the following:
            ``(1) For fiscal year 2013, an amount equal to $1 
        multiplied by the average number of individuals entitled to 
        benefits under part A, or enrolled under part B, of title XVIII 
        during such fiscal year.
            ``(2) For each of fiscal years 2014, 2015, 2016, 2017, 
        2018, and 2019, an amount equal to $2 multiplied by the average 
        number of individuals entitled to benefits under part A, or 
        enrolled under part B, of title XVIII during such fiscal year.
    ``(b) Adjustments for Increases in Health Care Spending.--In the 
case of any fiscal year beginning after September 30, 2014, the dollar 
amount in effect under subsection (a)(2) for such fiscal year shall be 
equal to the sum of such dollar amount for the previous fiscal year 
(determined after the application of this subsection), plus an amount 
equal to the product of--
            ``(1) such dollar amount for the previous fiscal year, 
        multiplied by
            ``(2) the percentage increase in the projected per capita 
        amount of National Health Expenditures from the calendar year 
        in which the previous fiscal year ends to the calendar year in 
        which the fiscal year involved ends, as most recently published 
        by the Secretary before the beginning of the fiscal year.''.
    (b) Coordination With Provider Education and Technical 
Assistance.--Section 1889(a) of the Social Security Act (42 U.S.C. 
1395zz(a)) is amended by inserting ``and to enhance the understanding 
of and utilization by providers of services and suppliers of research 
findings disseminated by the Patient-Centered Outcomes Research 
Institute established under section 1181'' before the period at the 
end.
    (c) Patient-Centered Outcomes Research Trust Fund; Financing for 
Trust Fund.--
            (1) Establishment of trust fund.--
                    (A) In general.--Subchapter A of chapter 98 of the 
                Internal Revenue Code of 1986 (relating to 
                establishment of trust funds) is amended by adding at 
                the end the following new section:

``SEC. 9511. PATIENT-CENTERED OUTCOMES RESEARCH TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Patient-Centered 
Outcomes Research Trust Fund' (hereafter in this section referred to as 
the `PCORTF'), consisting of such amounts as may be appropriated or 
credited to such Trust Fund as provided in this section and section 
9602(b).
    ``(b) Transfers to Fund.--
            ``(1) Appropriation.--There are hereby appropriated to the 
        Trust Fund the following:
                    ``(A) For fiscal year 2010, $10,000,000.
                    ``(B) For fiscal year 2011, $50,000,000.
                    ``(C) For fiscal year 2012, $150,000,000.
                    ``(D) For fiscal year 2013--
                            ``(i) an amount equivalent to the net 
                        revenues received in the Treasury from the fees 
                        imposed under subchapter B of chapter 34 
                        (relating to fees on health insurance and self-
                        insured plans) for such fiscal year; and
                            ``(ii) $150,000,000.
                    ``(E) For each of fiscal years 2014, 2015, 2016, 
                2017, 2018, and 2019--
                            ``(i) an amount equivalent to the net 
                        revenues received in the Treasury from the fees 
                        imposed under subchapter B of chapter 34 
                        (relating to fees on health insurance and self-
                        insured plans) for such fiscal year; and
                            ``(ii) $150,000,000.
        The amounts appropriated under subparagraphs (A), (B), (C), 
        (D)(ii), and (E)(ii) shall be transferred from the general fund 
        of the Treasury, from funds not otherwise appropriated.
            ``(2) Trust fund transfers.--In addition to the amounts 
        appropriated under paragraph (1), there shall be credited to 
        the PCORTF the amounts transferred under section 1183 of the 
        Social Security Act.
            ``(3) American recovery and reinvestment funds.--In 
        addition to the amounts appropriated under paragraph (1) and 
        the amounts credited under paragraph (2), of amounts 
        appropriated for comparative effectiveness research to be 
        allocated at the discretion of the Secretary of Health and 
        Human Services under the heading Agency for Healthcare Research 
        and Quality under the heading Department of Health and Human 
        Services under title VIII of Division A of the American 
        Recovery and Reinvestment Act of 2009 (Public Law 111-5), 
        $10,000,000 shall be transferred to the Trust Fund.
            ``(4) Limitation on transfers to pcortf.--No amount may be 
        appropriated or transferred to the PCORTF on and after the date 
        of any expenditure from the PCORTF which is not an expenditure 
        permitted under this section. The determination of whether an 
        expenditure is so permitted shall be made without regard to--
                    ``(A) any provision of law which is not contained 
                or referenced in this chapter or in a revenue Act, and
                    ``(B) whether such provision of law is a 
                subsequently enacted provision or directly or 
                indirectly seeks to waive the application of this 
                paragraph.
    ``(c) Trustee.--The Secretary of Health and Human Services shall be 
a trustee of the PCORTF.
    ``(d) Expenditures From Fund.--Amounts in the PCORTF are available, 
without further appropriation, to the Patient-Centered Outcomes 
Research Institute established by section 3501(a) of the America's 
Healthy Future Act of 2009 for carrying out part D of title XI of the 
Social Security Act (as in effect on the date of enactment of such 
Act).
    ``(e) Net Revenues.--For purposes of this section, the term `net 
revenues' means the amount estimated by the Secretary of the Treasury 
based on the excess of--
            ``(1) the fees received in the Treasury under subchapter B 
        of chapter 34, over
            ``(2) the decrease in the tax imposed by chapter 1 
        resulting from the fees imposed by such subchapter.
    ``(f) Termination.--No amounts shall be available for expenditure 
from the PCORTF after September 30, 2019, and any amounts in such Trust 
Fund after such date shall be transferred to the general fund of the 
Treasury.''.
                    (B) Clerical amendment.--The table of sections for 
                subchapter A of chapter 98 of such Code is amended by 
                adding at the end the following new item:

``Sec. 9511. Patient-Centered Outcomes Research Trust Fund.''.
            (2) Financing for fund from fees on insured and self-
        insured health plans.--
                    (A) General rule.--Chapter 34 of the Internal 
                Revenue Code of 1986 is amended by adding at the end 
                the following new subchapter:

         ``Subchapter B--Insured and Self-Insured Health Plans

``Sec. 4375. Health insurance.
``Sec. 4376. Self-insured health plans.
``Sec. 4377. Definitions and special rules.

``SEC. 4375. HEALTH INSURANCE.

    ``(a) Imposition of Fee.--There is hereby imposed on each specified 
health insurance policy for each policy year ending after September 30, 
2012, a fee equal to the product of $2 ($1 in the case of policy years 
ending during fiscal year 2013) multiplied by the average number of 
lives covered under the policy.
    ``(b) Liability for Fee.--The fee imposed by subsection (a) shall 
be paid by the issuer of the policy.
    ``(c) Specified Health Insurance Policy.--For purposes of this 
section:
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `specified health insurance policy' means any 
        accident or health insurance policy (including a policy under a 
        group health plan) issued with respect to individuals residing 
        in the United States.
            ``(2) Exemption for certain policies.--The term `specified 
        health insurance policy' does not include any insurance if 
        substantially all of its coverage is of excepted benefits 
        described in section 9832(c).
            ``(3) Treatment of prepaid health coverage arrangements.--
                    ``(A) In general.--In the case of any arrangement 
                described in subparagraph (B)--
                            ``(i) such arrangement shall be treated as 
                        a specified health insurance policy, and
                            ``(ii) the person referred to in such 
                        subparagraph shall be treated as the issuer.
                    ``(B) Description of arrangements.--An arrangement 
                is described in this subparagraph if under such 
                arrangement fixed payments or premiums are received as 
                consideration for any person's agreement to provide or 
                arrange for the provision of accident or health 
                coverage to residents of the United States, regardless 
                of how such coverage is provided or arranged to be 
                provided.
    ``(d) Adjustments for Increases in Health Care Spending.--In the 
case of any policy year ending in any fiscal year beginning after 
September 30, 2014, the dollar amount in effect under subsection (a) 
for such policy year shall be equal to the sum of such dollar amount 
for policy years ending in the previous fiscal year (determined after 
the application of this subsection), plus an amount equal to the 
product of--
            ``(1) such dollar amount for policy years ending in the 
        previous fiscal year, multiplied by
            ``(2) the percentage increase in the projected per capita 
        amount of National Health Expenditures from the calendar year 
        in which the previous fiscal year ends to the calendar year in 
        which the fiscal year involved ends, as most recently published 
        by the Secretary of Health and Human Services before the 
        beginning of the fiscal year.
    ``(e) Termination.--This section shall not apply to policy years 
ending after September 30, 2019.

``SEC. 4376. SELF-INSURED HEALTH PLANS.

    ``(a) Imposition of Fee.--In the case of any applicable self-
insured health plan for each plan year ending after September 30, 2012, 
there is hereby imposed a fee equal to $2 ($1 in the case of plan years 
ending during fiscal year 2013) multiplied by the average number of 
lives covered under the plan.
    ``(b) Liability for Fee.--
            ``(1) In general.--The fee imposed by subsection (a) shall 
        be paid by the plan sponsor.
            ``(2) Plan sponsor.--For purposes of paragraph (1) the term 
        `plan sponsor' means--
                    ``(A) the employer in the case of a plan 
                established or maintained by a single employer,
                    ``(B) the employee organization in the case of a 
                plan established or maintained by an employee 
                organization,
                    ``(C) in the case of--
                            ``(i) a plan established or maintained by 2 
                        or more employers or jointly by 1 or more 
                        employers and 1 or more employee organizations,
                            ``(ii) a multiple employer welfare 
                        arrangement, or
                            ``(iii) a voluntary employees' beneficiary 
                        association described in section 501(c)(9),
                the association, committee, joint board of trustees, or 
                other similar group of representatives of the parties 
                who establish or maintain the plan, or
                    ``(D) the cooperative or association described in 
                subsection (c)(2)(F) in the case of a plan established 
                or maintained by such a cooperative or association.
    ``(c) Applicable Self-Insured Health Plan.--For purposes of this 
section, the term `applicable self-insured health plan' means any plan 
for providing accident or health coverage if--
            ``(1) any portion of such coverage is provided other than 
        through an insurance policy, and
            ``(2) such plan is established or maintained--
                    ``(A) by 1 or more employers for the benefit of 
                their employees or former employees,
                    ``(B) by 1 or more employee organizations for the 
                benefit of their members or former members,
                    ``(C) jointly by 1 or more employers and 1 or more 
                employee organizations for the benefit of employees or 
                former employees,
                    ``(D) by a voluntary employees' beneficiary 
                association described in section 501(c)(9),
                    ``(E) by any organization described in section 
                501(c)(6), or
                    ``(F) in the case of a plan not described in the 
                preceding subparagraphs, by a multiple employer welfare 
                arrangement (as defined in section 3(40) of Employee 
                Retirement Income Security Act of 1974), a rural 
                electric cooperative (as defined in section 
                3(40)(B)(iv) of such Act), or a rural telephone 
                cooperative association (as defined in section 
                3(40)(B)(v) of such Act).
    ``(d) Adjustments for Increases in Health Care Spending.--In the 
case of any plan year ending in any fiscal year beginning after 
September 30, 2014, the dollar amount in effect under subsection (a) 
for such plan year shall be equal to the sum of such dollar amount for 
plan years ending in the previous fiscal year (determined after the 
application of this subsection), plus an amount equal to the product 
of--
            ``(1) such dollar amount for plan years ending in the 
        previous fiscal year, multiplied by
            ``(2) the percentage increase in the projected per capita 
        amount of National Health Expenditures from the calendar year 
        in which the previous fiscal year ends to the calendar year in 
        which the fiscal year involved ends, as most recently published 
        by the Secretary of Health and Human Services before the 
        beginning of the fiscal year.
    ``(e) Termination.--This section shall not apply to plan years 
ending after September 30, 2019.

``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Accident and health coverage.--The term `accident and 
        health coverage' means any coverage which, if provided by an 
        insurance policy, would cause such policy to be a specified 
        health insurance policy (as defined in section 4375(c)).
            ``(2) Insurance policy.--The term `insurance policy' means 
        any policy or other instrument whereby a contract of insurance 
        is issued, renewed, or extended.
            ``(3) United states.--The term `United States' includes any 
        possession of the United States.
    ``(b) Treatment of Governmental Entities.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) the term `person' includes any governmental 
                entity, and
                    ``(B) notwithstanding any other law or rule of law, 
                governmental entities shall not be exempt from the fees 
                imposed by this subchapter except as provided in 
                paragraph (2).
            ``(2) Treatment of exempt governmental programs.--In the 
        case of an exempt governmental program, no fee shall be imposed 
        under section 4375 or section 4376 on any covered life under 
        such program.
            ``(3) Exempt governmental program defined.--For purposes of 
        this subchapter, the term `exempt governmental program' means--
                    ``(A) any insurance program established under title 
                XVIII of the Social Security Act,
                    ``(B) the medical assistance program established by 
                title XIX or XXI of the Social Security Act,
                    ``(C) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to individuals (or the spouses and dependents 
                thereof) by reason of such individuals being--
                            ``(i) members of the Armed Forces of the 
                        United States, or
                            ``(ii) veterans, and
                    ``(D) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to members of Indian tribes (as defined in 
                section 4(d) of the Indian Health Care Improvement 
                Act).
    ``(c) Treatment as Tax.--For purposes of subtitle F, the fees 
imposed by this subchapter shall be treated as if they were taxes.
    ``(d) No Cover Over to Possessions.--Notwithstanding any other 
provision of law, no amount collected under this subchapter shall be 
covered over to any possession of the United States.''.
                    (B) Clerical amendments.--
                            (i) Chapter 34 of such Code is amended by 
                        striking the chapter heading and inserting the 
                        following:

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

          ``subchapter a. policies issued by foreign insurers

         ``subchapter b. insured and self-insured health plans

         ``Subchapter A--Policies Issued By Foreign Insurers''.

                            (ii) The table of chapters for subtitle D 
                        of such Code is amended by striking the item 
                        relating to chapter 34 and inserting the 
                        following new item:

          ``Chapter 34--Taxes on Certain Insurance Policies''.

    (d) Tax-exempt Status of the Patient-Centered Outcomes Research 
Institute.--Subsection 501(l) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new paragraph:
            ``(4) The Patient-Centered Outcomes Research Institute 
        established under section 1181(b) of the Social Security 
        Act.''.

SEC. 3502. COORDINATION WITH FEDERAL COORDINATING COUNCIL FOR 
              COMPARATIVE EFFECTIVENESS RESEARCH.

    Section 804 of Division A of the American Recovery and Reinvestment 
Act of 2009 (42 U.S.C. 299b-8) is amended--
            (1) in subsection (c)--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(3) provide support to the Patient-Centered Outcomes 
        Research Institute established under section 1181(b)(1) of the 
        Social Security Act (referred to in this section as the 
        `Institute').'';
            (2) in subsection (e)(2), by striking ``regarding its 
        activities'' and all that follows through the period at the end 
        and inserting ``containing--
                    ``(A) an inventory of its activities with respect 
                to comparative effectiveness research conducted by 
                relevant Federal departments and agencies; and
                    ``(B) recommendations concerning better 
                coordination of comparative effectiveness research by 
                such departments and agencies.'';
            (3) by redesignating subsection (g) as subsection (h); and
            (4) by inserting after subsection (f) the following new 
        subsection:
    ``(g) Coordination With the Patient-Centered Outcomes Research 
Institute.--The Council shall coordinate with the Institute in carrying 
out its duties under this section.''.

SEC. 3503. GAO REPORT ON NATIONAL COVERAGE DETERMINATIONS PROCESS.

    Not later than 18 months after the date of enactment of this Act, 
the Comptroller General of the United States shall submit a report to 
Congress on the process for making national coverage determinations (as 
defined in section 1869(f)(1)(B) of the Social Security Act (42 U.S.C. 
1395ff(f)(1)(B))) under the Medicare program under title XVIII of the 
Social Security Act. Such report shall include a determination whether, 
in initiating and conducting such process, the Secretary of Health and 
Human Services has complied with applicable law and regulations, 
including requirements for consultation with appropriate outside 
experts, providing appropriate notice and comment opportunities to the 
public, and making information and data (other than proprietary data) 
considered in making such determinations available to the public and to 
nonvoting members of any advisory committees established to advise the 
Secretary with respect to such determinations.

               Subtitle G--Administrative Simplification

SEC. 3601. ADMINISTRATIVE SIMPLIFICATION.

    (a) Operating Rules for Health Information Transactions.--
            (1) Definition of operating rules.--Section 1171 of the 
        Social Security Act (42 U.S.C. 1320d) is amended by adding at 
        the end the following:
            ``(9) Operating rules.--The term `operating rules' means 
        the necessary business rules and guidelines for the electronic 
        exchange of information that are not defined by a standard or 
        its implementation specifications as adopted for purposes of 
        this part.''.
            (2) Operating rules and compliance.--Section 1173 of the 
        Social Security Act (42 U.S.C. 1320d-2) is amended--
                    (A) in subsection (a)(2), by adding at the end the 
                following new subparagraph:
                    ``(J) Electronic funds transfers.''; and
                    (B) by adding at the end the following new 
                subsections:
    ``(g) Operating Rules.--
            ``(1) In general.--The Secretary shall adopt a single set 
        of operating rules for each transaction described in subsection 
        (a)(2) with the goal of creating as much uniformity in the 
        implementation of the electronic standards as possible. Such 
        operating rules shall be consensus-based and reflect the 
        necessary business rules affecting health plans and health care 
        providers and the manner in which they operate pursuant to 
        standards issued under Health Insurance Portability and 
        Accountability Act of 1996.
            ``(2) Operating rules development.--In adopting operating 
        rules under this subsection, the Secretary shall rely on 
        recommendations for operating rules developed by a qualified 
        nonprofit entity, as selected by the Secretary, that meets the 
        following requirements:
                    ``(A) The entity focuses its mission on 
                administrative simplification.
                    ``(B) The entity demonstrates an established multi-
                stakeholder and consensus-based process for development 
                of operating rules, including representation by or 
                participation from health plans, health care providers, 
                vendors, relevant Federal agencies, and other standard 
                development organizations.
                    ``(C) The entity has established a public set of 
                guiding principles that ensure the operating rules and 
                process are open and transparent.
                    ``(D) The entity coordinates its activities with 
                the HIT Policy Committee and the HIT Standards 
                Committee (as established under title XXX of the Public 
                Health Service Act) and complements the efforts of the 
                Office of the National Healthcare Coordinator and its 
                related health information exchange goals.
                    ``(E) The entity incorporates national standards, 
                including the transaction standards issued under Health 
                Insurance Portability and Accountability Act of 1996.
                    ``(F) The entity supports nondiscrimination and 
                conflict of interest policies that demonstrate a 
                commitment to open, fair, and nondiscriminatory 
                practices.
                    ``(G) The entity allows for public review and 
                updates of the operating rules.
            ``(3) Review and recommendations.--The National Committee 
        on Vital and Health Statistics shall--
                    ``(A) review the operating rules developed by a 
                nonprofit entity described under paragraph (2);
                    ``(B) determine whether such rules represent a 
                consensus view of the health care industry and are 
                consistent with and do not alter current standards;
                    ``(C) evaluate whether such rules are consistent 
                with electronic standards adopted for health 
                information technology; and
                    ``(D) submit to the Secretary a recommendation as 
                to whether the Secretary should adopt such rules.
            ``(4) Implementation.--
                    ``(A) In general.--The Secretary shall adopt 
                operating rules under this subsection, by regulation in 
                accordance with subparagraph (C), following 
                consideration of the rules developed by the non-profit 
                entity described in paragraph (2) and the 
                recommendation submitted by the National Committee on 
                Vital and Health Statistics under paragraph (3)(D) and 
                having ensured consultation with providers.
                    ``(B) Adoption requirements; effective dates.--
                            ``(i) Eligibility for a health plan and 
                        health claim status.--The set of operating 
                        rules for transactions for eligibility for a 
                        health plan and health claim status shall be 
                        adopted not later than July 1, 2011, in a 
                        manner ensuring that such rules are effective 
                        not later than January 1, 2013, and may allow 
                        for the use of a machine readable 
                        identification card.
                            ``(ii) Electronic funds transfers and 
                        health care payment and remittance advice.--The 
                        set of operating rules for electronic funds 
                        transfers and health care payment and 
                        remittance advice shall be adopted not later 
                        than July 1, 2012, in a manner ensuring that 
                        such rules are effective not later than January 
                        1, 2014.
                            ``(iii) Other completed transactions.--The 
                        set of operating rules for the remainder of the 
                        completed transactions described in subsection 
                        (a)(2), including health claims or equivalent 
                        encounter information, enrollment and 
                        disenrollment in a health plan, health plan 
                        premium payments, and referral certification 
                        and authorization, shall be adopted not later 
                        than July 1, 2014, in a manner ensuring that 
                        such rules are effective not later than January 
                        1, 2016.
                    ``(C) Expedited rulemaking.--The Secretary shall 
                promulgate an interim final rule applying any standard 
                or operating rule recommended by the National Committee 
                on Vital and Health Statistics pursuant to paragraph 
                (3). The Secretary shall accept public comments on any 
                interim final rule published under this subparagraph 
                for 60 days after the date of such publication.
    ``(h) Compliance.--
            ``(1) Health plan certification.--
                    ``(A) Eligibility for a health plan, health claim 
                status, electronic funds transfers, health care payment 
                and remittance advice.--Not later than December 31, 
                2013, a health plan shall file a statement with the 
                Secretary, in such form as the Secretary may require, 
                certifying that the data and information systems for 
                such plan are in compliance with any applicable 
                standards (as described under paragraph (7) of section 
                1171) and operating rules (as described under paragraph 
                (9) of such section) for electronic funds transfers, 
                eligibility for a health plan, health claim status, and 
                health care payment and remittance advice, 
                respectively.
                    ``(B) Other completed transactions.--Not later than 
                December 31, 2015, a health plan shall file a statement 
                with the Secretary, in such form as the Secretary may 
                require, certifying that the data and information 
                systems for such plan are in compliance with any 
                applicable standards and operating rules for the 
                remainder of the completed transactions described in 
                subsection (a)(2), including health claims or 
                equivalent encounter information, enrollment and 
                disenrollment in a health plan, health plan premium 
                payments, and referral certification and authorization, 
                respectively. A health plan shall provide the same 
                level of documentation to certify compliance with such 
                transactions as is required to certify compliance with 
                the transactions specified in subparagraph (A).
            ``(2) Documentation of compliance.--A health plan shall 
        provide the Secretary, in such form as the Secretary may 
        require, with adequate documentation of compliance with the 
        standards and operating rules described under paragraph (1). A 
        health plan shall not be considered to have provided adequate 
        documentation and shall not be certified as being in compliance 
        with such standards, unless the health plan--
                    ``(A) demonstrates to the Secretary that the plan 
                conducts the electronic transactions specified in 
                paragraph (1) in a manner that fully complies with the 
                regulations of the Secretary; and
                    ``(B) provides documentation showing that the plan 
                has completed end-to-end testing for such transactions 
                with their partners, such as hospitals and physicians.
            ``(3) Service contracts.--A health plan shall be required 
        to comply with any applicable certification and compliance 
        requirements (and provide the Secretary with adequate 
        documentation of such compliance) under this subsection for any 
        entities that provide services pursuant to a contract with such 
        health plan.
            ``(4) Certification by outside entity.--The Secretary may 
        contract with an independent, outside entity to certify that a 
        health plan has complied with the requirements under this 
        subsection, provided that the certification standards employed 
        by such entities are in accordance with any standards or rules 
        issued by the Secretary.
            ``(5) Compliance with revised standards and rules.--A 
        health plan (including entities described under paragraph (3)) 
        shall comply with the certification and documentation 
        requirements under this subsection for any interim final rule 
        promulgated by the Secretary under subsection (i) that amends 
        any standard or operating rule described under paragraph (1) of 
        this subsection. A health plan shall comply with such 
        requirements not later than the effective date of the 
        applicable interim final rule.
            ``(6) Audits of health plans.--The Secretary shall conduct 
        periodic audits to ensure that health plans (including entities 
        described under paragraph (3)) are in compliance with any 
        standards and operating rules that are described under 
        paragraph (1).
    ``(i) Review and Amendment of Standards and Rules.--
            ``(1) Establishment.--Not later than January 1, 2014, the 
        Secretary shall establish a review committee (as described 
        under paragraph (4)).
            ``(2) Evaluations and reports.--
                    ``(A) Hearings.--Not later than April 1, 2014, and 
                not less than biennially thereafter, the Secretary, 
                acting through the review committee, shall conduct 
                hearings to evaluate and review the existing standards 
                and operating rules established under this section.
                    ``(B) Report.--Not later than July 1, 2014, and not 
                less than biennially thereafter, the review committee 
                shall provide recommendations for updating and 
                improving such standards and rules. The review 
                committee shall recommend a single set of operating 
                rules per transaction standard and maintain the goal of 
                creating as much uniformity as possible in the 
                implementation of the electronic standards.
            ``(3) Interim final rulemaking.--
                    ``(A) In general.--Any recommendations to amend 
                existing standards and operating rules that have been 
                approved by the review committee and reported to the 
                Secretary under paragraph (2)(B) shall be adopted by 
                the Secretary through promulgation of an interim final 
                rule not later than 90 days after receipt of the 
                committee's report.
                    ``(B) Public comment.--
                            ``(i) Public comment period.--The Secretary 
                        shall accept public comments on any interim 
                        final rule published under this paragraph for 
                        60 days after the date of such publication.
                            ``(ii) Effective date.--The effective date 
                        of any amendment to existing standards or 
                        operating rules that is adopted through an 
                        interim final rule published under this 
                        paragraph shall be 25 months following the 
                        close of such public comment period.
            ``(4) Review committee.--
                    ``(A) Definition.--For the purposes of this 
                subsection, the term `review committee' means a 
                committee within the Department of Health and Human 
                services that has been designated by the Secretary to 
                carry out this subsection, including--
                            ``(i) the National Committee on Vital and 
                        Health Statistics; or
                            ``(ii) any appropriate committee as 
                        determined by the Secretary.
                    ``(B) Coordination of hit standards.--In developing 
                recommendations under this subsection, the review 
                committee shall consider the standards approved by the 
                Office of the National Coordinator for Health 
                Information Technology.
    ``(j) Penalties.--
            ``(1) Penalty fee.--
                    ``(A) In general.--Not later than April 1, 2014, 
                and annually thereafter, the Secretary shall assess a 
                penalty fee (as determined under subparagraph (B)) 
                against a health plan that has failed to meet the 
                requirements under subsection (h) with respect to 
                certification and documentation of compliance with the 
                standards (and their operating rules) as described 
                under paragraph (1) of such subsection.
                    ``(B) Fee amount.--Subject to subparagraphs (C), 
                (D), and (E), the Secretary shall assess a penalty fee 
                against a health plan in the amount of $1 per covered 
                life until certification is complete. The penalty shall 
                be assessed per person covered by the plan for which 
                its data systems for major medical policies are not in 
                compliance and shall be imposed against the health plan 
                for each day that the plan is not in compliance with 
                the requirements under subsection (h).
                    ``(C) Additional penalty for misrepresentation.--A 
                health plan that knowingly provides inaccurate or 
                incomplete information in a statement of certification 
                or documentation of compliance under subsection (h) 
                shall be subject to a penalty fee that is double the 
                amount that would otherwise be imposed under this 
                subsection.
                    ``(D) Annual fee increase.--The amount of the 
                penalty fee imposed under this subsection shall be 
                increased on an annual basis by the annual percentage 
                increase in total national health care expenditures, as 
                determined by the Secretary.
                    ``(E) Penalty limit.--A penalty fee assessed 
                against a health plan under this subsection shall not 
                exceed, on an annual basis--
                            ``(i) an amount equal to $20 per covered 
                        life under such plan; or
                            ``(ii) an amount equal to $40 per covered 
                        life under the plan if such plan has knowingly 
                        provided inaccurate or incomplete information 
                        (as described under subparagraph (C)).
                    ``(F) Determination of covered individuals.--The 
                Secretary shall determine the number of covered lives 
                under a health plan based upon the most recent 
                statements and filings that have been submitted by such 
                plan to the Securities and Exchange Commission.
            ``(2) Notice and dispute procedure.--The Secretary shall 
        establish a procedure for assessment of penalty fees under this 
        subsection that provides a health plan with reasonable notice 
        and a dispute resolution procedure prior to provision of a 
        notice of assessment by the Secretary of the Treasury (as 
        described under paragraph (4)(B)).
            ``(3) Penalty fee report.--Not later than May 1, 2014, and 
        annually thereafter, the Secretary shall provide the Secretary 
        of the Treasury with a report identifying those health plans 
        that have been assessed a penalty fee under this subsection.
            ``(4) Collection of penalty fee.--
                    ``(A) In general.--The Secretary of the Treasury, 
                acting through the Financial Management Service, shall 
                administer the collection of penalty fees from health 
                plans that have been identified by the Secretary in the 
                penalty fee report provided under paragraph (3).
                    ``(B) Notice.--Not later than August 1, 2014, and 
                annually thereafter, the Secretary of the Treasury 
                shall provide notice to each health plan that has been 
                assessed a penalty fee by the Secretary under this 
                subsection. Such notice shall include the amount of the 
                penalty fee assessed by the Secretary and the due date 
                for payment of such fee to the Secretary of the 
                Treasury (as described in subparagraph (C)).
                    ``(C) Payment due date.--Payment by a health plan 
                for a penalty fee assessed under this subsection shall 
                be made to the Secretary of the Treasury not later than 
                November 1, 2014, and annually thereafter.
                    ``(D) Unpaid penalty fees.--Any amount of a penalty 
                fee assessed against a health plan under this 
                subsection for which payment has not been made by the 
                due date provided under subparagraph (C) shall be--
                            ``(i) increased by the interest accrued on 
                        such amount, as determined pursuant to the 
                        underpayment rate established under section 
                        6601 of the Internal Revenue Code of 1986; and
                            ``(ii) treated as a past-due, legally 
                        enforceable debt owed to a Federal agency for 
                        purposes of section 6402(d) of the Internal 
                        Revenue Code of 1986.
                    ``(E) Administrative fees.--Any fee charged or 
                allocated for collection activities conducted by the 
                Financial Management Service will be passed on to a 
                health plan on a pro-rata basis and added to any 
                penalty fee collected from the plan.''.
    (b) Promulgation of Rules.--
            (1) Unique health plan identifier.--The Secretary shall 
        promulgate a final rule to establish a unique health plan 
        identifier (as described in section 1173(b) of the Social 
        Security Act (42 U.S.C. 1320d-2(b))) based on the input of the 
        National Committee of Vital and Health Statistics. The 
        Secretary may do so on an interim final basis and such rule 
        shall be effective not later than October 1, 2012.
            (2) Electronic funds transfer.--The Secretary shall 
        promulgate a final rule to establish a standard for electronic 
        funds transfers (as described in section 1173(a)(2)(J) of the 
        Social Security Act, as added by subsection (a)(2)(A)). The 
        Secretary may do so on an interim final basis and shall adopt 
        such standard not later than January 1, 2012, in a manner 
        ensuring that such standard is effective not later than January 
        1, 2014.
    (c) Expansion of Electronic Transactions in Medicare.--Section 
1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended--
            (1) in paragraph (23), by striking the ``or'' at the end;
            (2) in paragraph (24), by striking the period and inserting 
        ``; or''; and
            (3) by inserting after paragraph (24) the following new 
        paragraph:
            ``(25) not later than January 1, 2014, for which the 
        payment is other than by electronic funds transfer (EFT) or an 
        electronic remittance in a form as specified in ASC X12 835 
        Health Care Payment and Remittance Advice or subsequent 
        standard.''.
    (d) Medicare and Medicaid Compliance Reports.--Not later than July 
1, 2013, the Secretary of Health and Human Services shall submit a 
report to the Chairs and Ranking Members of the Committee on Ways and 
Means and the Committee on Energy and Commerce of the House of 
Representatives and the Chairs and Ranking Members of the Committee on 
Health, Education, Labor, and Pensions and the Committee on Finance of 
the Senate on the extent to which the Medicare program and providers 
that serve beneficiaries under that program, and State Medicaid 
programs and providers that serve beneficiaries under those programs, 
transact electronically in accordance with transaction standards issued 
under the Health Insurance Portability and Accountability Act of 1996, 
part C of title XI of the Social Security Act, and regulations 
promulgated under such Acts.

     Subtitle H--Sense of the Senate Regarding Medical Malpractice

SEC. 3701. SENSE OF THE SENATE REGARDING MEDICAL MALPRACTICE.

    It is the sense of the Senate that--
            (1) health care reform presents an opportunity to address 
        issues related to medical malpractice and medical liability 
        insurance;
            (2) States should be encouraged to develop and test 
        alternatives to the existing civil litigation system as a way 
        of improving patient safety, reducing medical errors, 
        encouraging the efficient resolution of disputes, increasing 
        the availability of prompt and fair resolution of disputes, and 
        improving access to liability insurance, while preserving an 
        individual's right to seek redress in court; and
            (3) Congress should consider establishing a State 
        demonstration program to evaluate alternatives to the existing 
        civil litigation system with respect to the resolution of 
        medical malpractice claims.

              TITLE IV--TRANSPARENCY AND PROGRAM INTEGRITY

  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.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended--
            (1) in subsection (d)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in the case where the entity is a hospital, 
                the hospital meets the requirements of paragraph 
                (3)(D).'';
            (2) in subsection (d)(3)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) the hospital meets the requirements described 
                in subsection (i)(1) not later than 18 months after the 
                date of the enactment of this subparagraph.''; and
            (3) by adding at the end the following new subsection:
    ``(i) Requirements for Hospitals to Qualify for Rural Provider and 
Hospital Exception to Ownership or Investment Prohibition.--
            ``(1) Requirements described.--For purposes of subsection 
        (d)(3)(D), the requirements described in this paragraph for a 
        hospital are as follows:
                    ``(A) Provider agreement.--The hospital had--
                            ``(i) physician ownership or investment on 
                        November 1, 2009; and
                            ``(ii) a provider agreement under section 
                        1866 in effect on such date.
                    ``(B) Limitation on expansion of facility 
                capacity.--Except as provided in paragraph (3), the 
                number of operating rooms, procedure rooms, and beds 
                for which the hospital is licensed at any time on or 
                after the date of the enactment of this subsection is 
                no greater than the number of operating rooms, 
                procedure rooms, and beds for which the hospital is 
                licensed as of such date.
                    ``(C) Preventing conflicts of interest.--
                            ``(i) The hospital submits to the Secretary 
                        an annual report containing a detailed 
                        description of--
                                    ``(I) the identity of each 
                                physician owner or investor and any 
                                other owners or investors of the 
                                hospital; and
                                    ``(II) the nature and extent of all 
                                ownership and investment interests in 
                                the hospital.
                            ``(ii) The hospital has procedures in place 
                        to require that any referring physician owner 
                        or investor discloses to the patient being 
                        referred, by a time that permits the patient to 
                        make a meaningful decision regarding the 
                        receipt of care, as determined by the 
                        Secretary--
                                    ``(I) the ownership or investment 
                                interest, as applicable, of such 
                                referring physician in the hospital; 
                                and
                                    ``(II) if applicable, any such 
                                ownership or investment interest of the 
                                treating physician.
                            ``(iii) The hospital does not condition any 
                        physician ownership or investment interests 
                        either directly or indirectly on the physician 
                        owner or investor making or influencing 
                        referrals to the hospital or otherwise 
                        generating business for the hospital.
                            ``(iv) The hospital discloses the fact that 
                        the hospital is partially owned or invested in 
                        by physicians--
                                    ``(I) on any public website for the 
                                hospital; and
                                    ``(II) in any public advertising 
                                for the hospital.
                    ``(D) Ensuring bona fide investment.--
                            ``(i) The percentage of the total value of 
                        the ownership or investment interests held in 
                        the hospital, or in an entity whose assets 
                        include the hospital, by physician owners or 
                        investors in the aggregate does not exceed such 
                        percentage as of the date of enactment of this 
                        subsection.
                            ``(ii) Any ownership or investment 
                        interests that the hospital offers to a 
                        physician owner or investor are not offered on 
                        more favorable terms than the terms offered to 
                        a person who is not a physician owner or 
                        investor.
                            ``(iii) The hospital (or any owner or 
                        investor in the hospital) does not directly or 
                        indirectly provide loans or financing for any 
                        investment in the hospital by a physician owner 
                        or investor.
                            ``(iv) The hospital (or any owner or 
                        investor in the hospital) does not directly or 
                        indirectly guarantee a loan, make a payment 
                        toward a loan, or otherwise subsidize a loan, 
                        for any individual physician owner or investor 
                        or group of physician owners or investors that 
                        is related to acquiring any ownership or 
                        investment interest in the hospital.
                            ``(v) Ownership or investment returns are 
                        distributed to each owner or investor in the 
                        hospital in an amount that is directly 
                        proportional to the ownership or investment 
                        interest of such owner or investor in the 
                        hospital.
                            ``(vi) Physician owners and investors do 
                        not receive, directly or indirectly, any 
                        guaranteed receipt of or right to purchase 
                        other business interests related to the 
                        hospital, including the purchase or lease of 
                        any property under the control of other owners 
                        or investors in the hospital or located near 
                        the premises of the hospital.
                            ``(vii) The hospital does not offer a 
                        physician owner or investor the opportunity to 
                        purchase or lease any property under the 
                        control of the hospital or any other owner or 
                        investor in the hospital on more favorable 
                        terms than the terms offered to an individual 
                        who is not a physician owner or investor.
                    ``(E) Patient safety.--
                            ``(i) Insofar as the hospital admits a 
                        patient and does not have any physician 
                        available on the premises to provide services 
                        during all hours in which the hospital is 
                        providing services to such patient, before 
                        admitting the patient--
                                    ``(I) the hospital discloses such 
                                fact to a patient; and
                                    ``(II) following such disclosure, 
                                the hospital receives from the patient 
                                a signed acknowledgment that the 
                                patient understands such fact.
                            ``(ii) The hospital has the capacity to--
                                    ``(I) provide assessment and 
                                initial treatment for patients; and
                                    ``(II) refer and transfer patients 
                                to hospitals with the capability to 
                                treat the needs of the patient 
                                involved.
                    ``(F) Limitation on application to certain 
                converted facilities.--The hospital was not converted 
                from an ambulatory surgical center to a hospital on or 
                after the date of enactment of this subsection.
            ``(2) Publication of information reported.--The Secretary 
        shall publish, and update on an annual basis, the information 
        submitted by hospitals under paragraph (1)(C)(i) on the public 
        Internet website of the Centers for Medicare & Medicaid 
        Services.
            ``(3) Exception to prohibition on expansion of facility 
        capacity.--
                    ``(A) Process.--
                            ``(i) Establishment.--The Secretary shall 
                        establish and implement a process under which 
                        an applicable hospital (as defined in 
                        subparagraph (E)) may apply for an exception 
                        from the requirement under paragraph (1)(B).
                            ``(ii) Opportunity for community input.--
                        The process under clause (i) shall provide 
                        individuals and entities in the community in 
                        which the applicable hospital applying for an 
                        exception is located with the opportunity to 
                        provide input with respect to the application.
                            ``(iii) Timing for implementation.--The 
                        Secretary shall implement the process under 
                        clause (i) on May 1, 2011.
                            ``(iv) Regulations.--Not later than April 
                        1, 2011, the Secretary shall promulgate 
                        regulations to carry out the process under 
                        clause (i).
                    ``(B) Frequency.--The process described in 
                subparagraph (A) shall permit an applicable hospital to 
                apply for an exception up to once every 2 years.
                    ``(C) Permitted increase.--
                            ``(i) In general.--Subject to clause (ii) 
                        and subparagraph (D), an applicable hospital 
                        granted an exception under the process 
                        described in subparagraph (A) may increase the 
                        number of operating rooms, procedure rooms, and 
                        beds for which the applicable hospital is 
                        licensed above the baseline number of operating 
                        rooms, procedure rooms, and beds of the 
                        applicable hospital (or, if the applicable 
                        hospital has been granted a previous exception 
                        under this paragraph, above the number of 
                        operating rooms, procedure rooms, and beds for 
                        which the hospital is licensed after the 
                        application of the most recent increase under 
                        such an exception).
                            ``(ii) 100 percent increase limitation.--
                        The Secretary shall not permit an increase in 
                        the number of operating rooms, procedure rooms, 
                        and beds for which an applicable hospital is 
                        licensed under clause (i) to the extent such 
                        increase would result in the number of 
                        operating rooms, procedure rooms, and beds for 
                        which the applicable hospital is licensed 
                        exceeding 200 percent of the baseline number of 
                        operating rooms, procedure rooms, and beds of 
                        the applicable hospital.
                            ``(iii) Baseline number of operating rooms, 
                        procedure rooms, and beds.--In this paragraph, 
                        the term `baseline number of operating rooms, 
                        procedure rooms, and beds' means the number of 
                        operating rooms, procedure rooms, and beds for 
                        which the applicable hospital is licensed as of 
                        the date of enactment of this subsection.
                    ``(D) Increase limited to facilities on the main 
                campus of the hospital.--Any increase in the number of 
                operating rooms, procedure rooms, and beds for which an 
                applicable hospital is licensed pursuant to this 
                paragraph may only occur in facilities on the main 
                campus of the applicable hospital.
                    ``(E) Applicable hospital.--In this paragraph, the 
                term `applicable hospital' means a hospital--
                            ``(i) that is located in a county in which 
                        the percentage increase in the population 
                        during the most recent 5-year period (as of the 
                        date of the application under subparagraph (A)) 
                        is at least 150 percent of the percentage 
                        increase in the population growth of the State 
                        in which the hospital is located during that 
                        period, as estimated by Bureau of the Census;
                            ``(ii) whose annual percent of total 
                        inpatient admissions that represent inpatient 
                        admissions under the program under title XIX is 
                        equal to or greater than the average percent 
                        with respect to such admissions for all 
                        hospitals located in the county in which the 
                        hospital is located;
                            ``(iii) that does not discriminate against 
                        beneficiaries of Federal health care programs 
                        and does not permit physicians practicing at 
                        the hospital to discriminate against such 
                        beneficiaries;
                            ``(iv) that is located in a State in which 
                        the average bed capacity in the State is less 
                        than the national average bed capacity; and
                            ``(v) that has an average bed occupancy 
                        rate that is greater than the average bed 
                        occupancy rate in the State in which the 
                        hospital is located.
                    ``(F) Procedure rooms.--In this subsection, the 
                term `procedure rooms' includes rooms in which 
                catheterizations, angiographies, angiograms, and 
                endoscopies are performed, except such term shall not 
                include emergency rooms or departments (exclusive of 
                rooms in which catheterizations, angiographies, 
                angiograms, and endoscopies are performed).
                    ``(G) Publication of final decisions.--Not later 
                than 60 days after receiving a complete application 
                under this paragraph, the Secretary shall publish in 
                the Federal Register the final decision with respect to 
                such application.
                    ``(H) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the process under this 
                paragraph (including the establishment of such 
                process).
            ``(4) Collection of ownership and investment information.--
        For purposes of subparagraphs (A)(i) and (D)(i) of paragraph 
        (1), the Secretary shall collect physician ownership and 
        investment information for each hospital.
            ``(5) Physician owner or investor defined.--For purposes of 
        this subsection, the term `physician owner or investor' means a 
        physician (or an immediate family member of such physician) 
        with a direct or an indirect ownership or investment interest 
        in the hospital.
            ``(6) Clarification.--Nothing in this subsection shall be 
        construed as preventing the Secretary from revoking a 
        hospital's provider agreement if not in compliance with 
        regulations implementing section 1866.''.
    (b) Enforcement.--
            (1) Ensuring compliance.--The Secretary of Health and Human 
        Services shall establish policies and procedures to ensure 
        compliance with the requirements described in subsection (i)(1) 
        of section 1877 of the Social Security Act, as added by 
        subsection (a)(3), beginning on the date such requirements 
        first apply. Such policies and procedures may include 
        unannounced site reviews of hospitals.
            (2) Audits.--Beginning not later than August 1, 2011, the 
        Secretary of Health and Human Services shall conduct audits to 
        determine if hospitals violate the requirements referred to in 
        paragraph (1).

         Subtitle B--Physician Ownership and Other Transparency

SEC. 4101. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR 
              INVESTMENT INTERESTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1128F the following new 
section:

``SEC. 1128G. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP 
              OR INVESTMENT INTERESTS.

    ``(a) Transparency Reports.--
            ``(1) Payments or other transfers of value.--
                    ``(A) In general.--On March 31, 2012, and on the 
                90th day of each calendar year beginning thereafter, 
                any applicable manufacturer that provides a payment or 
                other transfer of value to a covered recipient (or to 
                an entity or individual at the request of or designated 
                on behalf of a covered recipient), shall submit to the 
                Secretary, in such electronic form as the Secretary 
                shall require, the following information with respect 
                to the preceding calendar year:
                            ``(i) The name of the covered recipient.
                            ``(ii) The business address of the covered 
                        recipient and, in the case of a covered 
                        recipient who is a physician, the specialty and 
                        National Provider Identifier of the covered 
                        recipient.
                            ``(iii) The amount of the payment or other 
                        transfer of value.
                            ``(iv) The dates on which the payment or 
                        other transfer of value was provided to the 
                        covered recipient.
                            ``(v) A description of the form of the 
                        payment or other transfer of value, indicated 
                        (as appropriate for all that apply) as--
                                    ``(I) cash or a cash equivalent;
                                    ``(II) in-kind items or services;
                                    ``(III) stock, a stock option, or 
                                any other ownership interest, dividend, 
                                profit, or other return on investment; 
                                or
                                    ``(IV) any other form of payment or 
                                other transfer of value (as defined by 
                                the Secretary).
                            ``(vi) A description of the nature of the 
                        payment or other transfer of value, indicated 
                        (as appropriate for all that apply) as--
                                    ``(I) consulting fees;
                                    ``(II) compensation for services 
                                other than consulting;
                                    ``(III) honoraria;
                                    ``(IV) gift;
                                    ``(V) entertainment;
                                    ``(VI) food;
                                    ``(VII) travel (including the 
                                specified destinations);
                                    ``(VIII) education;
                                    ``(IX) research;
                                    ``(X) charitable contribution;
                                    ``(XI) royalty or license;
                                    ``(XII) current or prospective 
                                ownership or investment interest;
                                    ``(XIII) direct compensation for 
                                serving as faculty or as a speaker for 
                                a medical education program;
                                    ``(XIV) grant; or
                                    ``(XV) any other nature of the 
                                payment or other transfer of value (as 
                                defined by the Secretary).
                            ``(vii) If the payment or other transfer of 
                        value is related to marketing, education, or 
                        research specific to a covered drug, device, 
                        biological, or medical supply, the name of that 
                        covered drug, device, biological, or medical 
                        supply.
                            ``(viii) Any other categories of 
                        information regarding the payment or other 
                        transfer of value the Secretary determines 
                        appropriate.
                    ``(B) Special rule for certain payments or other 
                transfers of value.--In the case where an applicable 
                manufacturer provides a payment or other transfer of 
                value to an entity or individual at the request of or 
                designated on behalf of a covered recipient, the 
                applicable manufacturer shall disclose that payment or 
                other transfer of value under the name of the covered 
                recipient.
            ``(2) Physician ownership.--In addition to the requirement 
        under paragraph (1)(A), on March 31, 2012, and on the 90th day 
        of each calendar year beginning thereafter, any applicable 
        manufacturer or applicable group purchasing organization shall 
        submit to the Secretary, in such electronic form as the 
        Secretary shall require, the following information regarding 
        any ownership or investment interest (other than an ownership 
        or investment interest in a publicly traded security and mutual 
        fund, as described in section 1877(c)) held by a physician (or 
        an immediate family member of such physician (as defined for 
        purposes of section 1877(a))) in the applicable manufacturer or 
        applicable group purchasing organization during the preceding 
        year:
                    ``(A) The dollar amount invested by each physician 
                holding such an ownership or investment interest.
                    ``(B) The value and terms of each such ownership or 
                investment interest.
                    ``(C) Any payment or other transfer of value 
                provided to a physician holding such an ownership or 
                investment interest (or to an entity or individual at 
                the request of or designated on behalf of a physician 
                holding such an ownership or investment interest), 
                including the information described in clauses (i) 
                through (viii) of paragraph (1)(A), except that in 
                applying such clauses, `physician' shall be substituted 
                for `covered recipient' each place it appears.
                    ``(D) Any other information regarding the ownership 
                or investment interest the Secretary determines 
                appropriate.
    ``(b) Penalties for Noncompliance.--
            ``(1) Failure to report.--
                    ``(A) In general.--Subject to subparagraph (B) 
                except as provided in paragraph (2), any applicable 
                manufacturer or applicable group purchasing 
                organization that fails to submit information required 
                under subsection (a) in a timely manner in accordance 
                with rules or regulations promulgated to carry out such 
                subsection, shall be subject to a civil money penalty 
                of not less than $1,000, but not more than $10,000, for 
                each payment or other transfer of value or ownership or 
                investment interest not reported as required under such 
                subsection. Such penalty shall be imposed and collected 
                in the same manner as civil money penalties under 
                subsection (a) of section 1128A are imposed and 
                collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                applicable group purchasing organization shall not 
                exceed $150,000.
            ``(2) Knowing failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                applicable manufacturer or applicable group purchasing 
                organization that knowingly fails to submit information 
                required under subsection (a) in a timely manner in 
                accordance with rules or regulations promulgated to 
                carry out such subsection, shall be subject to a civil 
                money penalty of not less than $10,000, but not more 
                than $100,000, for each payment or other transfer of 
                value or ownership or investment interest not reported 
                as required under such subsection. Such penalty shall 
                be imposed and collected in the same manner as civil 
                money penalties under subsection (a) of section 1128A 
                are imposed and collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                applicable group purchasing organization shall not 
                exceed $1,000,000.
            ``(3) Use of funds.--Funds collected by the Secretary as a 
        result of the imposition of a civil money penalty under this 
        subsection shall be used to carry out this section.
    ``(c) Procedures for Submission of Information and Public 
Availability.--
            ``(1) In general.--
                    ``(A) Establishment.--Not later than October 1, 
                2010, the Secretary shall establish procedures--
                            ``(i) for applicable manufacturers and 
                        applicable group purchasing organizations to 
                        submit information to the Secretary under 
                        subsection (a); and
                            ``(ii) for the Secretary to make such 
                        information submitted available to the public.
                    ``(B) Definition of terms.--The procedures 
                established under subparagraph (A) shall provide for 
                the definition of terms (other than those terms defined 
                in subsection (e)), as appropriate, for purposes of 
                this section.
                    ``(C) Public availability.--Except as provided in 
                subparagraph (E), the procedures established under 
                subparagraph (A)(ii) shall ensure that, not later than 
                September 30, 2012, and on June 30 of each calendar 
                year beginning thereafter, the information submitted 
                under subsection (a) with respect to the preceding 
                calendar year is made available through an Internet 
                website that--
                            ``(i) is searchable and is in a format that 
                        is clear and understandable;
                            ``(ii) contains information that is 
                        presented by the name of the applicable 
                        manufacturer or applicable group purchasing 
                        organization, the name of the covered 
                        recipient, the business address of the covered 
                        recipient, the specialty of the covered 
                        recipient, the value of the payment or other 
                        transfer of value, the date on which the 
                        payment or other transfer of value was provided 
                        to the covered recipient, the form of the 
                        payment or other transfer of value, indicated 
                        (as appropriate) under subsection (a)(1)(A)(v), 
                        the nature of the payment or other transfer of 
                        value, indicated (as appropriate) under 
                        subsection (a)(1)(A)(vi), and the name of the 
                        covered drug, device, biological, or medical 
                        supply, as applicable;
                            ``(iii) contains information that is able 
                        to be easily aggregated and downloaded;
                            ``(iv) contains a description of any 
                        enforcement actions taken to carry out this 
                        section, including any penalties imposed under 
                        subsection (b), during the preceding year;
                            ``(v) contains background information on 
                        industry-physician relationships;
                            ``(vi) in the case of information submitted 
                        with respect to a payment or other transfer of 
                        value described in subparagraph (E)(i), lists 
                        such information separately from the other 
                        information submitted under subsection (a) and 
                        designates such separately listed information 
                        as funding for clinical research;
                            ``(vii) contains any other information the 
                        Secretary determines would be helpful to the 
                        average consumer;
                            ``(viii) does not contain the National 
                        Provider Identifier of the covered recipient, 
                        and
                            ``(ix) subject to subparagraph (D), 
                        provides the applicable manufacturer, 
                        applicable group purchasing organization, or 
                        covered recipient an opportunity to review and 
                        submit corrections to the information submitted 
                        with respect to the applicable manufacturer, 
                        applicable group purchasing organization, or 
                        covered recipient, respectively, for a period 
                        of not less than 45 days prior to such 
                        information being made available to the public.
                    ``(D) Clarification of time period for review and 
                corrections.--In no case may the 45-day period for 
                review and submission of corrections to information 
                under subparagraph (C)(ix) prevent such information 
                from being made available to the public in accordance 
                with the dates described in the matter preceding clause 
                (i) in subparagraph (C).
                    ``(E) Delayed publication for payments made 
                pursuant to product research or development agreements 
                and clinical investigations.--
                            ``(i) In general.--In the case of 
                        information submitted under subsection (a) with 
                        respect to a payment or other transfer of value 
                        made to a covered recipient by an applicable 
                        manufacturer pursuant to a product research or 
                        development agreement for services furnished in 
                        connection with research on a potential new 
                        medical technology or a new application of an 
                        existing medical technology or the development 
                        of a new drug, device, biological, or medical 
                        supply, or by an applicable manufacturer in 
                        connection with a clinical investigation 
                        regarding a new drug, device, biological, or 
                        medical supply, the procedures established 
                        under subparagraph (A)(ii) shall provide that 
                        such information is made available to the 
                        public on the first date described in the 
                        matter preceding clause (i) in subparagraph (C) 
                        after the earlier of the following:
                                    ``(I) The date of the approval or 
                                clearance of the covered drug, device, 
                                biological, or medical supply by the 
                                Food and Drug Administration.
                                    ``(II) Four calendar years after 
                                the date such payment or other transfer 
                                of value was made.
                            ``(ii) Confidentiality of information prior 
                        to publication.--Information described in 
                        clause (i) shall be considered confidential and 
                        shall not be subject to disclosure under 
                        section 552 of title 5, United States Code, or 
                        any other similar Federal, State, or local law, 
                        until on or after the date on which the 
                        information is made available to the public 
                        under such clause.
            ``(2) Consultation.--In establishing the procedures under 
        paragraph (1), the Secretary shall consult with the Inspector 
        General of the Department of Health and Human Services, 
        affected industry, consumers, consumer advocates, and other 
        interested parties in order to ensure that the information made 
        available to the public under such paragraph is presented in 
        the appropriate overall context.
    ``(d) Annual Reports and Relation to State Laws.--
            ``(1) Annual report to congress.--Not later than April 1 of 
        each year beginning with 2012, the Secretary shall submit to 
        Congress a report that includes the following:
                    ``(A) The information submitted under subsection 
                (a) during the preceding year, aggregated for each 
                applicable manufacturer and applicable group purchasing 
                organization that submitted such information during 
                such year (except, in the case of information submitted 
                with respect to a payment or other transfer of value 
                described in subsection (c)(1)(E)(i), such information 
                shall be included in the first report submitted to 
                Congress after the date on which such information is 
                made available to the public under such subsection).
                    ``(B) A description of any enforcement actions 
                taken to carry out this section, including any 
                penalties imposed under subsection (b), during the 
                preceding year.
            ``(2) Annual reports to states.--Not later than September 
        30, 2012 and on June 30 of each calendar year thereafter, the 
        Secretary shall submit to States a report that includes a 
        summary of the information submitted under subsection (a) 
        during the preceding year with respect to covered recipients in 
        the State (except, in the case of information submitted with 
        respect to a payment or other transfer of value described in 
        subsection (c)(1)(E)(i), such information shall be included in 
        the first report submitted to States after the date on which 
        such information is made available to the public under such 
        subsection).
            ``(3) Relation to state laws.--
                    ``(A) In general.--In the case of a payment or 
                other transfer of value provided by an applicable 
                manufacturer that is received by a covered recipient 
                (as defined in subsection (e)) on or after January 1, 
                2011, subject to subparagraph (B), the provisions of 
                this section shall preempt any statute or regulation of 
                a State or of a political subdivision of a State that 
                requires an applicable manufacturer (as so defined) to 
                disclose or report, in any format, the type of 
                information (as described in subsection (a)) regarding 
                such payment or other transfer of value.
                    ``(B) No preemption of additional requirements.--
                Subparagraph (A) shall not preempt any statute or 
                regulation of a State or of a political subdivision of 
                a State that requires the disclosure or reporting of 
                information--
                            ``(i) not of the type required to be 
                        disclosed or reported under this section;
                            ``(ii) described in subsection (e)(10)(B), 
                        except in the case of information described in 
                        clause (i) of such subsection;
                            ``(iii) by any person or entity other than 
                        an applicable manufacturer (as so defined) or a 
                        covered recipient (as defined in subsection 
                        (e)); or
                            ``(iv) to a Federal, State, or local 
                        governmental agency for public health 
                        surveillance, investigation, or other public 
                        health purposes or health oversight purposes.
                    ``(C) Nothing in subparagraph (A) shall be 
                construed to limit the discovery or admissibility of 
                information described in such subparagraph in a 
                criminal, civil, or administrative proceeding.
            ``(4) Consultation.--The Secretary shall consult with the 
        Inspector General of the Department of Health and Human 
        Services on the implementation of this section.
    ``(e) Definitions.--In this section:
            ``(1) Applicable group purchasing organization.--The term 
        `applicable group purchasing organization' means a group 
        purchasing organization (as defined by the Secretary) that 
        purchases, arranges for, or negotiates the purchase of a 
        covered drug, device, biological, or medical supply which is 
        operating in the United States, or in a territory, possession, 
        or commonwealth of the United States.
            ``(2) Applicable manufacturer.--The term `applicable 
        manufacturer' means a manufacturer of a covered drug, device, 
        biological, or medical supply which is operating in the United 
        States, or in a territory, possession, or commonwealth of the 
        United States.
            ``(3) Clinical investigation.--The term `clinical 
        investigation' means any experiment involving 1 or more human 
        subjects, or materials derived from human subjects, in which a 
        drug or device is administered, dispensed, or used.
            ``(4) Covered device.--The term `covered device' means any 
        device for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
            ``(5) Covered drug, device, biological, or medical 
        supply.--The term `covered drug, device, biological, or medical 
        supply' means any drug, biological product, device, or medical 
        supply for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
            ``(6) Covered recipient.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `covered recipient' means 
                the following:
                            ``(i) A physician.
                            ``(ii) A teaching hospital.
                    ``(B) Exclusion.--Such term does not include a 
                physician who is an employee of the applicable 
                manufacturer that is required to submit information 
                under subsection (a).
            ``(7) Employee.--The term `employee' has the meaning given 
        such term in section 1877(h)(2).
            ``(8) Knowingly.--The term `knowingly' has the meaning 
        given such term in section 3729(b) of title 31, United States 
        Code.
            ``(9) Manufacturer of a covered drug, device, biological, 
        or medical supply.--The term `manufacturer of a covered drug, 
        device, biological, or medical supply' means any entity which 
        is engaged in the production, preparation, propagation, 
        compounding, or conversion of a covered drug, device, 
        biological, or medical supply (or any entity under common 
        ownership with such entity which provides assistance or support 
        to such entity with respect to the production, preparation, 
        propagation, compounding, conversion, marketing, promotion, 
        sale, or distribution of a covered drug, device, biological, or 
        medical supply).
            ``(10) Payment or other transfer of value.--
                    ``(A) In general.--The term `payment or other 
                transfer of value' means a transfer of anything of 
                value. Such term does not include a transfer of 
                anything of value that is made indirectly to a covered 
                recipient through a third party in connection with an 
                activity or service in the case where the applicable 
                manufacturer is unaware of the identity of the covered 
                recipient.
                    ``(B) Exclusions.--An applicable manufacturer shall 
                not be required to submit information under subsection 
                (a) with respect to the following:
                            ``(i) A transfer of anything the value of 
                        which is less than $10, unless the aggregate 
                        amount transferred to, requested by, or 
                        designated on behalf of the covered recipient 
                        by the applicable manufacturer during the 
                        calendar year exceeds $100. For calendar years 
                        after 2012, the dollar amounts specified in the 
                        preceding sentence shall be increased by the 
                        same percentage as the percentage increase in 
                        the consumer price index for all urban 
                        consumers (all items; U.S. city average) for 
                        the 12-month period ending with June of the 
                        previous year.
                            ``(ii) Product samples that are not 
                        intended to be sold and are intended for 
                        patient use.
                            ``(iii) Educational materials that directly 
                        benefit patients or are intended for patient 
                        use.
                            ``(iv) The loan of a covered device for a 
                        short-term trial period, not to exceed 90 days, 
                        to permit evaluation of the covered device by 
                        the covered recipient.
                            ``(v) Items or services provided under a 
                        contractual warranty, including the replacement 
                        of a covered device, where the terms of the 
                        warranty are set forth in the purchase or lease 
                        agreement for the covered device.
                            ``(vi) A transfer of anything of value to a 
                        covered recipient when the covered recipient is 
                        a patient and not acting in the professional 
                        capacity of a covered recipient.
                            ``(vii) Discounts (including rebates).
                            ``(viii) In-kind items used for the 
                        provision of charity care.
                            ``(ix) A dividend or other profit 
                        distribution from, or ownership or investment 
                        interest in, a publicly traded security and 
                        mutual fund (as described in section 1877(c)).
                            ``(x) In the case of an applicable 
                        manufacturer who offers a self-insured plan, 
                        payments for the provision of health care to 
                        employees under the plan.
                            ``(xi) In the case of a covered recipient 
                        who is a licensed non-medical professional, a 
                        transfer of anything of value to the covered 
                        recipient if the transfer is payment solely for 
                        the non-medical professional services of such 
                        licensed non-medical professional.
                            ``(xii) In the case of a covered recipient 
                        who is a physician, a transfer of anything of 
                        value to the covered recipient if the transfer 
                        is payment solely for the services of the 
                        covered recipient with respect to a civil or 
                        criminal action or an administrative 
                        proceeding.
            ``(11) Physician.--The term `physician' has the meaning 
        given that term in section 1861(r).''.

SEC. 4102. DISCLOSURE REQUIREMENTS FOR IN-OFFICE ANCILLARY SERVICES 
              EXCEPTION TO THE PROHIBITION ON PHYSICIAN SELF-REFERRAL 
              FOR CERTAIN IMAGING SERVICES.

    (a) In General.--Section 1877(b)(2) of the Social Security Act (42 
U.S.C. 1395nn(b)(2)) is amended by adding at the end the following new 
sentence: ``Such requirements shall, with respect to magnetic resonance 
imaging, computed tomography, positron emission tomography, and any 
other designated health services specified under subsection (h)(6)(D) 
that the Secretary determines appropriate, include a requirement that 
the referring physician inform the individual in writing at the time of 
the referral that the individual may obtain the services for which the 
individual is being referred from a person other than a person 
described in subparagraph (A)(i) and provide such individual with a 
written list of suppliers (as defined in section 1861(d)) who furnish 
such services in the area in which such individual resides.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to services furnished on or after January 1, 2010.

SEC. 4103. PRESCRIPTION DRUG SAMPLE TRANSPARENCY.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by section 4101, is amended by inserting after 
section 1128G the following new section:

``SEC. 1128H. REPORTING OF INFORMATION RELATING TO DRUG SAMPLES.

    ``(a) In General.--Not later than April 1 of each year (beginning 
with 2012), each manufacturer and authorized distributor of record of 
an applicable drug shall submit to the Secretary (in a form and manner 
specified by the Secretary) the following information with respect to 
the preceding year:
            ``(1) In the case of a manufacturer or authorized 
        distributor of record which makes distributions by mail or 
        common carrier under subsection (d)(2) of section 503 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353), the 
        identity and quantity of drug samples requested and the 
        identity and quantity of drug samples distributed under such 
        subsection during that year, aggregated by--
                    ``(A) the name, address, professional designation, 
                and signature of the practitioner making the request 
                under subparagraph (A)(i) of such subsection, or of any 
                individual who makes or signs for the request on behalf 
                of the practitioner; and
                    ``(B) any other category of information determined 
                appropriate by the Secretary.
            ``(2) In the case of a manufacturer or authorized 
        distributor of record which makes distributions by means other 
        than mail or common carrier under subsection (d)(3) of such 
        section 503, the identity and quantity of drug samples 
        requested and the identity and quantity of drug samples 
        distributed under such subsection during that year, aggregated 
        by--
                    ``(A) the name, address, professional designation, 
                and signature of the practitioner making the request 
                under subparagraph (A)(i) of such subsection, or of any 
                individual who makes or signs for the request on behalf 
                of the practitioner; and
                    ``(B) any other category of information determined 
                appropriate by the Secretary.
    ``(b) Definitions.--In this section:
            ``(1) Applicable drug.--The term `applicable drug' means a 
        drug--
                    ``(A) which is subject to subsection (b) of such 
                section 503; and
                    ``(B) for which payment is available under title 
                XVIII or a State plan under title XIX or XXI (or a 
                waiver of such a plan).
            ``(2) Authorized distributor of record.--The term 
        `authorized distributor of record' has the meaning given that 
        term in subsection (e)(3)(A) of such section.
            ``(3) Manufacturer.--The term `manufacturer' has the 
        meaning given that term for purposes of subsection (d) of such 
        section.''.

         Subtitle C--Nursing Home Transparency and Improvement

             PART I--IMPROVING TRANSPARENCY OF INFORMATION

SEC. 4201. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL DISCLOSABLE 
              PARTIES INFORMATION.

    (a) In General.--Section 1124 of the Social Security Act (42 U.S.C. 
1320a-3) is amended by adding at the end the following new subsection:
    ``(c) Required Disclosure of Ownership and Additional Disclosable 
Parties Information.--
            ``(1) Disclosure.--A facility shall have the information 
        described in paragraph (2) available--
                    ``(A) during the period beginning on the date of 
                the enactment of this subsection and ending on the date 
                such information is made available to the public under 
                section 4201(b) of the America's Healthy Future Act of 
                2009 for submission to the Secretary, the Inspector 
                General of the Department of Health and Human Services, 
                the State in which the facility is located, and the 
                State long-term care ombudsman in the case where the 
                Secretary, the Inspector General, the State, or the 
                State long-term care ombudsman requests such 
                information; and
                    ``(B) beginning on the effective date of the final 
                regulations promulgated under paragraph (3)(A), for 
                reporting such information in accordance with such 
                final regulations.
        Nothing in subparagraph (A) shall be construed as authorizing a 
        facility to dispose of or delete information described in such 
        subparagraph after the effective date of the final regulations 
        promulgated under paragraph (3)(A).
            ``(2) Information described.--
                    ``(A) In general.--The following information is 
                described in this paragraph:
                            ``(i) The information described in 
                        subsections (a) and (b), subject to 
                        subparagraph (C).
                            ``(ii) The identity of and information on--
                                    ``(I) each member of the governing 
                                body of the facility, including the 
                                name, title, and period of service of 
                                each such member;
                                    ``(II) each person or entity who is 
                                an officer, director, member, partner, 
                                trustee, or managing employee of the 
                                facility, including the name, title, 
                                and period of service of each such 
                                person or entity; and
                                    ``(III) each person or entity who 
                                is an additional disclosable party of 
                                the facility.
                            ``(iii) The organizational structure of 
                        each additional disclosable party of the 
                        facility and a description of the relationship 
                        of each such additional disclosable party to 
                        the facility and to one another.
                    ``(B) Special rule where information is already 
                reported or submitted.--To the extent that information 
                reported by a facility to the Internal Revenue Service 
                on Form 990, information submitted by a facility to the 
                Securities and Exchange Commission, or information 
                otherwise submitted to the Secretary or any other 
                Federal agency contains the information described in 
                clauses (i), (ii), or (iii) of subparagraph (A), the 
                facility may provide such Form or such information 
                submitted to meet the requirements of paragraph (1).
                    ``(C) Special rule.--In applying subparagraph 
                (A)(i)--
                            ``(i) with respect to subsections (a) and 
                        (b), `ownership or control interest' shall 
                        include direct or indirect interests, including 
                        such interests in intermediate entities; and
                            ``(ii) subsection (a)(3)(A)(ii) shall 
                        include the owner of a whole or part interest 
                        in any mortgage, deed of trust, note, or other 
                        obligation secured, in whole or in part, by the 
                        entity or any of the property or assets 
                        thereof, if the interest is equal to or exceeds 
                        5 percent of the total property or assets of 
                        the entirety.
            ``(3) Reporting.--
                    ``(A) In general.--Not later than the date that is 
                2 years after the date of the enactment of this 
                subsection, the Secretary shall promulgate final 
                regulations requiring, effective on the date that is 90 
                days after the date on which such final regulations are 
                published in the Federal Register, a facility to report 
                the information described in paragraph (2) to the 
                Secretary in a standardized format, and such other 
                regulations as are necessary to carry out this 
                subsection. Such final regulations shall ensure that 
                the facility certifies, as a condition of participation 
                and payment under the program under title XVIII or XIX, 
                that the information reported by the facility in 
                accordance with such final regulations is, to the 
                maximum extent practicable (as determined by the 
                facility), accurate and current.
                    ``(B) Guidance.--The Secretary shall provide 
                guidance and technical assistance to States on how to 
                adopt the standardized format under subparagraph (A).
            ``(4) No effect on existing reporting requirements.--
        Nothing in this subsection shall reduce, diminish, or alter any 
        reporting requirement for a facility that is in effect as of 
        the date of the enactment of this subsection.
            ``(5) Definitions.--In this subsection:
                    ``(A) Additional disclosable party.--The term 
                `additional disclosable party' means, with respect to a 
                facility, any person or entity who--
                            ``(i) exercises operational, financial, or 
                        managerial control over the facility or a part 
                        thereof, or provides policies or procedures for 
                        any of the operations of the facility, or 
                        provides financial or cash management services 
                        to the facility;
                            ``(ii) leases or subleases real property to 
                        the facility, or owns a whole or part interest 
                        equal to or exceeding 5 percent of the total 
                        value of such real property; or
                            ``(iii) provides management or 
                        administrative services, management or clinical 
                        consulting services, or accounting or financial 
                        services to the facility.
                    ``(B) Facility.--The term `facility' means a 
                disclosing entity which is--
                            ``(i) a skilled nursing facility (as 
                        defined in section 1819(a)); or
                            ``(ii) a nursing facility (as defined in 
                        section 1919(a)).
                    ``(C) Managing employee.--The term `managing 
                employee' means, with respect to a facility, an 
                individual (including a general manager, business 
                manager, administrator, director, or consultant) who 
                directly or indirectly manages, advises, or supervises 
                any element of the practices, finances, or operations 
                of the facility.
                    ``(D) Organizational structure.--The term 
                `organizational structure' means, in the case of--
                            ``(i) a corporation, the officers, 
                        directors, and shareholders of the corporation 
                        who have an ownership interest in the 
                        corporation which is equal to or exceeds 5 
                        percent;
                            ``(ii) a limited liability company, the 
                        members and managers of the limited liability 
                        company (including, as applicable, what 
                        percentage each member and manager has of the 
                        ownership interest in the limited liability 
                        company);
                            ``(iii) a general partnership, the partners 
                        of the general partnership;
                            ``(iv) a limited partnership, the general 
                        partners and any limited partners of the 
                        limited partnership who have an ownership 
                        interest in the limited partnership which is 
                        equal to or exceeds 10 percent;
                            ``(v) a trust, the trustees of the trust;
                            ``(vi) an individual, contact information 
                        for the individual; and
                            ``(vii) any other person or entity, such 
                        information as the Secretary determines 
                        appropriate.''.
    (b) Public Availability of Information.--Not later than the date 
that is 1 year after the date on which the final regulations 
promulgated under section 1124(c)(3)(A) of the Social Security Act, as 
added by subsection (a), are published in the Federal Register, the 
Secretary of Health and Human Services shall make the information 
reported in accordance with such final regulations available to the 
public in accordance with procedures established by the Secretary.
    (c) Conforming Amendments.--
            (1) In general.--
                    (A) Skilled nursing facilities.--Section 1819(d)(1) 
                of the Social Security Act (42 U.S.C. 1395i-3(d)(1)) is 
                amended by striking subparagraph (B) and redesignating 
                subparagraph (C) as subparagraph (B).
                    (B) Nursing facilities.--Section 1919(d)(1) of the 
                Social Security Act (42 U.S.C. 1396r(d)(1)) is amended 
                by striking subparagraph (B) and redesignating 
                subparagraph (C) as subparagraph (B).
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect on the date on which the Secretary makes the 
        information described in subsection (b)(1) available to the 
        public under such subsection.

SEC. 4202. ACCOUNTABILITY REQUIREMENTS FOR SKILLED NURSING FACILITIES 
              AND NURSING FACILITIES.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by section 4103, is amended by inserting after 
section 1128H the following new section:

``SEC. 1128I. ACCOUNTABILITY REQUIREMENTS FOR FACILITIES.

    ``(a) Definition of Facility.--In this section, the term `facility' 
means--
            ``(1) a skilled nursing facility (as defined in section 
        1819(a)); or
            ``(2) a nursing facility (as defined in section 1919(a)).
    ``(b) Effective Compliance and Ethics Programs.--
            ``(1) Requirement.--On or after the date that is 36 months 
        after the date of the enactment of this section, a facility 
        shall, with respect to the entity that operates the facility 
        (in this subparagraph referred to as the `operating 
        organization' or `organization'), have in operation a 
        compliance and ethics program that is effective in preventing 
        and detecting criminal, civil, and administrative violations 
        under this Act and in promoting quality of care consistent with 
        regulations developed under paragraph (2).
            ``(2) Development of regulations.--
                    ``(A) In general.--Not later than the date that is 
                2 years after such date of the enactment, the 
                Secretary, working jointly with the Inspector General 
                of the Department of Health and Human Services, shall 
                promulgate regulations for an effective compliance and 
                ethics program for operating organizations, which may 
                include a model compliance program.
                    ``(B)  Design of regulations.--Such regulations 
                with respect to specific elements or formality of a 
                program may vary with the size of the organization, 
                such that larger organizations should have a more 
                formal program and include established written policies 
                defining the standards and procedures to be followed by 
                its employees. Such requirements may specifically apply 
                to the corporate level management of multi unit nursing 
                home chains.
                    ``(C) Evaluation.--Not later than 3 years after the 
                date of the promulgation of regulations under this 
                paragraph, the Secretary shall complete an evaluation 
                of the compliance and ethics programs required to be 
                established under this subsection. Such evaluation 
                shall determine if such programs led to changes in 
                deficiency citations, changes in quality performance, 
                or changes in other metrics of patient quality of care. 
                The Secretary shall submit to Congress a report on such 
                evaluation and shall include in such report such 
                recommendations regarding changes in the requirements 
                for such programs as the Secretary determines 
                appropriate.
            ``(3) Requirements for compliance and ethics programs.--In 
        this subsection, the term `compliance and ethics program' 
        means, with respect to a facility, a program of the operating 
        organization that--
                    ``(A) has been reasonably designed, implemented, 
                and enforced so that it generally will be effective in 
                preventing and detecting criminal, civil, and 
                administrative violations under this Act and in 
                promoting quality of care; and
                    ``(B) includes at least the required components 
                specified in paragraph (4).
            ``(4) Required components of program.--The required 
        components of a compliance and ethics program of an operating 
        organization are the following:
                    ``(A) The organization must have established 
                compliance standards and procedures to be followed by 
                its employees and other agents that are reasonably 
                capable of reducing the prospect of criminal, civil, 
                and administrative violations under this Act.
                    ``(B) Specific individuals within high-level 
                personnel of the organization must have been assigned 
                overall responsibility to oversee compliance with such 
                standards and procedures and have sufficient resources 
                and authority to assure such compliance.
                    ``(C) The organization must have used due care not 
                to delegate substantial discretionary authority to 
                individuals whom the organization knew, or should have 
                known through the exercise of due diligence, had a 
                propensity to engage in criminal, civil, and 
                administrative violations under this Act.
                    ``(D) The organization must have taken steps to 
                communicate effectively its standards and procedures to 
                all employees and other agents, such as by requiring 
                participation in training programs or by disseminating 
                publications that explain in a practical manner what is 
                required.
                    ``(E) The organization must have taken reasonable 
                steps to achieve compliance with its standards, such as 
                by utilizing monitoring and auditing systems reasonably 
                designed to detect criminal, civil, and administrative 
                violations under this Act by its employees and other 
                agents and by having in place and publicizing a 
                reporting system whereby employees and other agents 
                could report violations by others within the 
                organization without fear of retribution.
                    ``(F) The standards must have been consistently 
                enforced through appropriate disciplinary mechanisms, 
                including, as appropriate, discipline of individuals 
                responsible for the failure to detect an offense.
                    ``(G) After an offense has been detected, the 
                organization must have taken all reasonable steps to 
                respond appropriately to the offense and to prevent 
                further similar offenses, including any necessary 
                modification to its program to prevent and detect 
                criminal, civil, and administrative violations under 
                this Act.
                    ``(H) The organization must periodically undertake 
                reassessment of its compliance program to identify 
                changes necessary to reflect changes within the 
                organization and its facilities.
    ``(c) Quality Assurance and Performance Improvement Program.--
            ``(1) In general.--Not later than December 31, 2011, the 
        Secretary shall establish and implement a quality assurance and 
        performance improvement program (in this subparagraph referred 
        to as the `QAPI program') for facilities, including multi unit 
        chains of facilities. Under the QAPI program, the Secretary 
        shall establish standards relating to quality assurance and 
        performance improvement with respect to facilities and provide 
        technical assistance to facilities on the development of best 
        practices in order to meet such standards. Not later than 1 
        year after the date on which the regulations are promulgated 
        under paragraph (2), a facility must submit to the Secretary a 
        plan for the facility to meet such standards and implement such 
        best practices, including how to coordinate the implementation 
        of such plan with quality assessment and assurance activities 
        conducted under sections 1819(b)(1)(B) and 1919(b)(1)(B), as 
        applicable.
            ``(2) Regulations.--The Secretary shall promulgate 
        regulations to carry out this subsection.''.

SEC. 4203. NURSING HOME COMPARE MEDICARE WEBSITE.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819 of the Social Security Act 
        (42 U.S.C. 1395i-3) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, easily 
                accessible, readily understandable to consumers of 
                long-term care services, and searchable:
                            ``(i) Information that is reported to the 
                        Secretary under section 1124(c)(3).
                            ``(ii) Information on the `Special Focus 
                        Facility program' (or a successor program) 
                        established by the Centers for Medicare and 
                        Medicaid Services, according to procedures 
                        established by the Secretary. Such procedures 
                        shall provide for the inclusion of information 
                        with respect to, and the names and locations 
                        of, those facilities that, since the previous 
                        quarter--
                                    ``(I) were newly enrolled in the 
                                program;
                                    ``(II) are enrolled in the program 
                                and have failed to significantly 
                                improve;
                                    ``(III) are enrolled in the program 
                                and have significantly improved;
                                    ``(IV) have graduated from the 
                                program; and
                                    ``(V) have closed voluntarily or no 
                                longer participate under this title.
                            ``(iii) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under section 1128I(g), 
                        including information on staffing turnover and 
                        tenure, in a format that is clearly 
                        understandable to consumers of long-term care 
                        services and allows such consumers to compare 
                        differences in staffing between facilities and 
                        State and national averages for the facilities. 
                        Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as a plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(iv) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report.
                            ``(v) The standardized complaint form 
                        developed under section 1128I(f), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(vi) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(vii) The number of adjudicated instances 
                        of criminal violations by a facility or the 
                        employees of a facility--
                                    ``(I) that were committed inside 
                                the facility;
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed inside of the facility that 
                                were the violations or crimes of abuse, 
                                neglect, and exploitation, criminal 
                                sexual abuse, or other violations or 
                                crimes that resulted in serious bodily 
                                injury; and
                                    ``(III) the number of civil 
                                monetary penalties levied against the 
                                facility, employees, contractors, and 
                                other agents.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) and (A)(iii) is included on 
                        such website (or a successor website) not later 
                        than the date on which the requirements under 
                        section 1124(c)(3) and section 1128I(g) are 
                        implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups; and
                            ``(iv) any other representatives of 
                        programs or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1819(g)(5) of the Social 
                Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a skilled nursing 
                facility (including any enforcement actions taken by 
                the State) to the Secretary not later than the date on 
                which the State sends such information to the facility. 
                The Secretary shall use the information submitted under 
                the preceding sentence to update the information 
                provided on the Nursing Home Compare Medicare website 
                as expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1819(f) of 
        such Act is amended by adding at the end the following new 
        paragraph:
            ``(8) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for skilled nursing facilities that the 
                Secretary has identified as having substantially failed 
                to meet applicable requirement of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less than once every 6 months.''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919 of the Social Security Act 
        (42 U.S.C. 1396r) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, easily 
                accessible, readily understandable to consumers of 
                long-term care services, and searchable:
                            ``(i) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under section 1128I(g), 
                        including information on staffing turnover and 
                        tenure, in a format that is clearly 
                        understandable to consumers of long-term care 
                        services and allows such consumers to compare 
                        differences in staffing between facilities and 
                        State and national averages for the facilities. 
                        Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(ii) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report.
                            ``(iii) The standardized complaint form 
                        developed under section 1128I(f), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(iv) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(v) The number of adjudicated instances 
                        of criminal violations by a facility or the 
                        employees of a facility--
                                    ``(I) that were committed inside of 
                                the facility; and
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed outside of the facility, that 
                                were violations or crimes that resulted 
                                in the serious bodily injury of an 
                                elder.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) is included on such website 
                        (or a successor website) not later than the 
                        date on which the requirements under section 
                        1128I(g) are implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups;
                            ``(iv) skilled nursing facility employees 
                        and their representatives; and
                            ``(v) any other representatives of programs 
                        or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1919(g)(5) of the Social 
                Security Act (42 U.S.C. 1396r(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a nursing facility 
                (including any enforcement actions taken by the State) 
                to the Secretary not later than the date on which the 
                State sends such information to the facility. The 
                Secretary shall use the information submitted under the 
                preceding sentence to update the information provided 
                on the Nursing Home Compare Medicare website as 
                expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1919(f) of 
        such Act is amended by adding at the end of the following new 
        paragraph:
            ``(10) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for nursing facilities that the Secretary 
                has identified as having substantially failed to meet 
                applicable requirements of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less often than once every 6 months.''.
    (c) Availability of Reports on Surveys, Certifications, and 
Complaint Investigations.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
        section 4201, is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Availability of survey, certification, and 
                complaint investigation reports.--A skilled nursing 
                facility must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 
        4201, is amended by adding at the end the following new 
        subparagraph:
                    ``(V) Availability of survey, certification, and 
                complaint investigation reports.--A nursing facility 
                must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect 1 year after the date of the enactment of 
        this Act.
    (d) Guidance to States on Form 2567 State Inspection Reports and 
Complaint Investigation Reports.--
            (1) Guidance.--The Secretary of Health and Human Services 
        (in this subtitle referred to as the ``Secretary'') shall 
        provide guidance to States on how States can establish 
        electronic links to Form 2567 State inspection reports (or a 
        successor form), complaint investigation reports, and a 
        facility's plan of correction or other response to such Form 
        2567 State inspection reports (or a successor form) on the 
        Internet website of the State that provides information on 
        skilled nursing facilities and nursing facilities and the 
        Secretary shall, if possible, include such information on 
        Nursing Home Compare.
            (2) Requirement.--Section 1902(a)(9) of the Social Security 
        Act (42 U.S.C. 1396a(a)(9)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by striking the semicolon at the end of 
                subparagraph (C) and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) that the State maintain a consumer-oriented 
                website providing useful information to consumers 
                regarding all skilled nursing facilities and all 
                nursing facilities in the State, including for each 
                facility, Form 2567 State inspection reports (or a 
                successor form), complaint investigation reports, the 
                facility's plan of correction, and such other 
                information that the State or the Secretary considers 
                useful in assisting the public to assess the quality of 
                long term care options and the quality of care provided 
                by individual facilities;''.
            (3) Definitions.--In this subsection:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395i-3(a)).
    (e) Development of Consumer Rights Information Page on Nursing Home 
Compare Website.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall ensure that the Department of Health and 
Human Services, as part of the information provided for comparison of 
nursing facilities on the Nursing Home Compare Medicare website 
develops and includes a consumer rights information page that contains 
links to descriptions of, and information with respect to, the 
following:
            (1) The documentation on nursing facilities that is 
        available to the public.
            (2) General information and tips on choosing a nursing 
        facility that meets the needs of the individual.
            (3) General information on consumer rights with respect to 
        nursing facilities.
            (4) The nursing facility survey process (on a national and 
        State-specific basis).
            (5) On a State-specific basis, the services available 
        through the State long-term care ombudsman for such State.

SEC. 4204. REPORTING OF EXPENDITURES.

    Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is 
amended by adding at the end the following new subsection:
    ``(f) Reporting of Direct Care Expenditures.--
            ``(1) In general.--For cost reports submitted under this 
        title for cost reporting periods beginning on or after the date 
        that is 2 years after the date of the enactment of this 
        subsection, skilled nursing facilities shall separately report 
        expenditures for wages and benefits for direct care staff 
        (breaking out (at a minimum) registered nurses, licensed 
        professional nurses, certified nurse assistants, and other 
        medical and therapy staff).
            ``(2) Modification of form.--The Secretary, in consultation 
        with private sector accountants experienced with Medicare and 
        Medicaid nursing facility home cost reports, shall redesign 
        such reports to meet the requirement of paragraph (1) not later 
        than 1 year after the date of the enactment of this subsection.
            ``(3) Categorization by functional accounts.--Not later 
        than 30 months after the date of the enactment of this 
        subsection, the Secretary, working in consultation with the 
        Medicare Payment Advisory Commission, the Medicaid and CHIP 
        Payment and Access Commission, the Inspector General of the 
        Department of Health and Human Services, and other expert 
        parties the Secretary determines appropriate, shall take the 
        expenditures listed on cost reports, as modified under 
        paragraph (1), submitted by skilled nursing facilities and 
        categorize such expenditures, regardless of any source of 
        payment for such expenditures, for each skilled nursing 
        facility into the following functional accounts on an annual 
        basis:
                    ``(A) Spending on direct care services (including 
                nursing, therapy, and medical services).
                    ``(B) Spending on indirect care (including 
                housekeeping and dietary services).
                    ``(C) Capital assets (including building and land 
                costs).
                    ``(D) Administrative services costs.
            ``(4) Availability of information submitted.--The Secretary 
        shall establish procedures to make information on expenditures 
        submitted under this subsection readily available to interested 
        parties upon request, subject to such requirements as the 
        Secretary may specify under the procedures established under 
        this paragraph.''.

SEC. 4205. STANDARDIZED COMPLAINT FORM.

    (a) In General.--Section 1128I of the Social Security Act, as added 
and amended by this Act, is amended by adding at the end the following 
new subsection:
    ``(f) Standardized Complaint Form.--
            ``(1) Development by the secretary.--The Secretary shall 
        develop a standardized complaint form for use by a resident (or 
        a person acting on the resident's behalf) in filing a complaint 
        with a State survey and certification agency and a State long-
        term care ombudsman program with respect to a facility.
            ``(2) Complaint forms and resolution processes.--
                    ``(A) Complaint forms.--The State must make the 
                standardized complaint form developed under paragraph 
                (1) available upon request to--
                            ``(i) a resident of a facility; and
                            ``(ii) any person acting on the resident's 
                        behalf.
                    ``(B) Complaint resolution process.--The State must 
                establish a complaint resolution process in order to 
                ensure that the legal representative of a resident of a 
                facility or other responsible party is not denied 
                access to such resident or otherwise retaliated against 
                if they have complained about the quality of care 
                provided by the facility or other issues relating to 
                the facility. Such complaint resolution process shall 
                include--
                            ``(i) procedures to assure accurate 
                        tracking of complaints received, including 
                        notification to the complainant that a 
                        complaint has been received;
                            ``(ii) procedures to determine the likely 
                        severity of a complaint and for the 
                        investigation of the complaint; and
                            ``(iii) deadlines for responding to a 
                        complaint and for notifying the complainant of 
                        the outcome of the investigation.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed as preventing a resident of a facility (or a 
        person acting on the resident's behalf) from submitting a 
        complaint in a manner or format other than by using the 
        standardized complaint form developed under paragraph (1) 
        (including submitting a complaint orally).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 4206. ENSURING STAFFING ACCOUNTABILITY.

    Section 1128I of the Social Security Act, as added and amended by 
this Act, is amended by adding at the end the following new subsection:
    ``(g) Submission of Staffing Information Based on Payroll Data in a 
Uniform Format.--Beginning not later than 2 years after the date of the 
enactment of this subsection, and after consulting with State long-term 
care ombudsman programs, consumer advocacy groups, provider stakeholder 
groups, employees and their representatives, and other parties the 
Secretary deems appropriate, the Secretary shall require a facility to 
electronically submit to the Secretary direct care staffing information 
(including information with respect to agency and contract staff) based 
on payroll and other verifiable and auditable data in a uniform format 
(according to specifications established by the Secretary in 
consultation with such programs, groups, and parties). Such 
specifications shall require that the information submitted under the 
preceding sentence--
            ``(1) specify the category of work a certified employee 
        performs (such as whether the employee is a registered nurse, 
        licensed practical nurse, licensed vocational nurse, certified 
        nursing assistant, therapist, or other medical personnel);
            ``(2) include resident census data and information on 
        resident case mix;
            ``(3) include a regular reporting schedule; and
            ``(4) include information on employee turnover and tenure 
        and on the hours of care provided by each category of certified 
        employees referenced in paragraph (1) per resident per day.
Nothing in this subsection shall be construed as preventing the 
Secretary from requiring submission of such information with respect to 
specific categories, such as nursing staff, before other categories of 
certified employees. Information under this subsection with respect to 
agency and contract staff shall be kept separate from information on 
employee staffing.''.

SEC. 4207. GAO STUDY AND REPORT ON FIVE-STAR QUALITY RATING SYSTEM.

    (a) Study.--The Comptroller General of the United States (in this 
section referred to as the ``Comptroller General'') shall conduct a 
study on the Five-Star Quality Rating System for nursing homes of the 
Centers for Medicare & Medicaid Services. Such study shall include an 
analysis of--
            (1) how such system is being implemented;
            (2) any problems associated with such system or its 
        implementation; and
            (3) how such system could be improved.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Comptroller General shall submit to Congress a report 
containing the results of the study conducted under subsection (a), 
together with recommendations for such legislation and administrative 
action as the Comptroller General determines appropriate.

                     PART II--TARGETING ENFORCEMENT

SEC. 4211. CIVIL MONEY PENALTIES.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(h)(2)(B)(ii) of the Social 
        Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended--
                    (A) by striking ``Penalties.--The Secretary'' and 
                inserting ``penalties.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the Secretary''; and
                    (B) by adding at the end the following new 
                subclauses:
                                    ``(II) Reduction of civil money 
                                penalties in certain circumstances.--
                                Subject to subclause (III), in the case 
                                where a facility self-reports and 
                                promptly corrects a deficiency for 
                                which a penalty was imposed under this 
                                clause not later than 10 calendar days 
                                after the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(III) Prohibitions on reduction 
                                for certain deficiencies.--
                                            ``(aa) Repeat 
                                        deficiencies.--The Secretary 
                                        may not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the Secretary had reduced a 
                                        penalty imposed on the facility 
                                        in the preceding year under 
                                        such subclause with respect to 
                                        a repeat deficiency.
                                            ``(bb) Certain other 
                                        deficiencies.--The Secretary 
                                        may not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the penalty is imposed on the 
                                        facility for a deficiency that 
                                        is found to result in a pattern 
                                        of harm or widespread harm, 
                                        immediately jeopardizes the 
                                        health or safety of a resident 
                                        or residents of the facility, 
                                        or results in the death of a 
                                        resident of the facility.
                                    ``(IV) Collection of civil money 
                                penalties.--In the case of a civil 
                                money penalty imposed under this 
                                clause, the Secretary shall issue 
                                regulations that--
                                            ``(aa) subject to item 
                                        (cc), not later than 30 days 
                                        after the imposition of the 
                                        penalty, provide for the 
                                        facility to have the 
                                        opportunity to participate in 
                                        an independent informal dispute 
                                        resolution process which 
                                        generates a written record 
                                        prior to the collection of such 
                                        penalty;
                                            ``(bb) in the case where 
                                        the penalty is imposed for each 
                                        day of noncompliance, provide 
                                        that a penalty may not be 
                                        imposed for any day during the 
                                        period beginning on the initial 
                                        day of the imposition of the 
                                        penalty and ending on the day 
                                        on which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on 
                                        which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed or the date 
                                        that is 90 days after the date 
                                        of the imposition of the 
                                        penalty;
                                            ``(dd) may provide that 
                                        such amounts collected are kept 
                                        in such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where 
                                        the facility successfully 
                                        appeals the penalty, may 
                                        provide for the return of such 
                                        amounts collected (plus 
                                        interest) to the facility; and
                                            ``(ff) in the case where 
                                        all such appeals are 
                                        unsuccessful, may provide that 
                                        some portion of such amounts 
                                        collected may be used to 
                                        support activities that benefit 
                                        residents, including assistance 
                                        to support and protect 
                                        residents of a facility that 
                                        closes (voluntarily or 
                                        involuntarily) or is 
                                        decertified (including 
                                        offsetting costs of relocating 
                                        residents to home and 
                                        community-based settings or 
                                        another facility), projects 
                                        that support resident and 
                                        family councils and other 
                                        consumer involvement in 
                                        assuring quality care in 
                                        facilities, and facility 
                                        improvement initiatives 
                                        approved by the Secretary 
                                        (including joint training of 
                                        facility staff and surveyors, 
                                        technical assistance for 
                                        facilities implementing quality 
                                        assurance programs, the 
                                        appointment of temporary 
                                        management firms, and other 
                                        activities approved by the 
                                        Secretary).''.
            (2) Conforming amendment.--The second sentence of section 
        1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5)) 
        is amended by inserting ``(ii)(IV),'' after ``(i),''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919(h)(3)(C)(ii) of the Social 
        Security Act (42 U.S.C. 1396r(h)(3)(C)) is amended--
                    (A) by striking ``Penalties.--The Secretary'' and 
                inserting ``penalties.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the Secretary''; and
                    (B) by adding at the end the following new 
                subclauses:
                                    ``(II) Reduction of civil money 
                                penalties in certain circumstances.--
                                Subject to subclause (III), in the case 
                                where a facility self-reports and 
                                promptly corrects a deficiency for 
                                which a penalty was imposed under this 
                                clause not later than 10 calendar days 
                                after the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(III) Prohibitions on reduction 
                                for certain deficiencies.--
                                            ``(aa) Repeat 
                                        deficiencies.--The Secretary 
                                        may not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the Secretary had reduced a 
                                        penalty imposed on the facility 
                                        in the preceding year under 
                                        such subclause with respect to 
                                        a repeat deficiency.
                                            ``(bb) Certain other 
                                        deficiencies.--The Secretary 
                                        may not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the penalty is imposed on the 
                                        facility for a deficiency that 
                                        is found to result in a pattern 
                                        of harm or widespread harm, 
                                        immediately jeopardizes the 
                                        health or safety of a resident 
                                        or residents of the facility, 
                                        or results in the death of a 
                                        resident of the facility.
                                    ``(IV) Collection of civil money 
                                penalties.--In the case of a civil 
                                money penalty imposed under this 
                                clause, the Secretary shall issue 
                                regulations that--
                                            ``(aa) subject to item 
                                        (cc), not later than 30 days 
                                        after the imposition of the 
                                        penalty, provide for the 
                                        facility to have the 
                                        opportunity to participate in 
                                        an independent informal dispute 
                                        resolution process which 
                                        generates a written record 
                                        prior to the collection of such 
                                        penalty;
                                            ``(bb) in the case where 
                                        the penalty is imposed for each 
                                        day of noncompliance, provide 
                                        that a penalty may not be 
                                        imposed for any day during the 
                                        period beginning on the initial 
                                        day of the imposition of the 
                                        penalty and ending on the day 
                                        on which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on 
                                        which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed or the date 
                                        that is 90 days after the date 
                                        of the imposition of the 
                                        penalty;
                                            ``(dd) may provide that 
                                        such amounts collected are kept 
                                        in such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where 
                                        the facility successfully 
                                        appeals the penalty, may 
                                        provide for the return of such 
                                        amounts collected (plus 
                                        interest) to the facility; and
                                            ``(ff) in the case where 
                                        all such appeals are 
                                        unsuccessful, may provide that 
                                        some portion of such amounts 
                                        collected may be used to 
                                        support activities that benefit 
                                        residents, including assistance 
                                        to support and protect 
                                        residents of a facility that 
                                        closes (voluntarily or 
                                        involuntarily) or is 
                                        decertified (including 
                                        offsetting costs of relocating 
                                        residents to home and 
                                        community-based settings or 
                                        another facility), projects 
                                        that support resident and 
                                        family councils and other 
                                        consumer involvement in 
                                        assuring quality care in 
                                        facilities, and facility 
                                        improvement initiatives 
                                        approved by the Secretary 
                                        (including joint training of 
                                        facility staff and surveyors, 
                                        technical assistance for 
                                        facilities implementing quality 
                                        assurance programs, the 
                                        appointment of temporary 
                                        management firms, and other 
                                        activities approved by the 
                                        Secretary).''.
            (2) Conforming amendment.--Section 1919(h)(5)(8) of the 
        Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is amended by 
        inserting ``(ii)(IV),'' after ``(i),''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 4212. NATIONAL INDEPENDENT MONITOR PILOT PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary shall establish a pilot 
        program to develop, test, and implement an independent monitor 
        program to oversee interstate and large intrastate chains of 
        skilled nursing facilities and nursing facilities.
            (2) Selection.--The Secretary shall select chains of 
        skilled nursing facilities and nursing facilities described in 
        paragraph (1) to participate in the pilot program under this 
        section from among those chains that submit an application to 
        the Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            (3) Duration.--The Secretary shall conduct the pilot 
        program under this section for a 2-year period.
            (4) Implementation.--The Secretary shall implement the 
        pilot program under this section not later than 1 year after 
        the date of the enactment of this Act.
    (b) Requirements.--The Secretary shall evaluate chains selected to 
participate in the pilot program under this section based on criteria 
selected by the Secretary, including where evidence suggests that 1 or 
more facilities of the chain are experiencing serious safety and 
quality of care problems. Such criteria may include the evaluation of a 
chain that includes 1 or more facilities participating in the ``Special 
Focus Facility'' program (or a successor program) or 1 or more 
facilities with a record of repeated serious safety and quality of care 
deficiencies.
    (c) Responsibilities.--An independent monitor that enters into a 
contract with the Secretary to participate in the conduct of the pilot 
program under this section shall--
            (1) conduct periodic reviews and prepare root-cause quality 
        and deficiency analyses of a chain to assess if facilities of 
        the chain are in compliance with State and Federal laws and 
        regulations applicable to the facilities;
            (2) undertake sustained oversight of the chain, whether 
        publicly or privately held, to involve the owners of, and any 
        additional disclosable party with respect to a facility of, the 
        chain in facilitating compliance by facilities of the chain 
        with State and Federal laws and regulations applicable to the 
        facilities;
            (3) analyze the management structure, distribution of 
        expenditures, and nurse staffing levels of facilities of the 
        chain in relation to resident census, staff turnover rates, and 
        tenure;
            (4) report findings and recommendations with respect to 
        such reviews, analyses, and oversight to the chain and 
        facilities of the chain, to the Secretary, and to relevant 
        States; and
            (5) publish the results of such reviews, analyses, and 
        oversight.
    (d) Implementation of Recommendations.--
            (1) Receipt of finding by chain.--Not later than 10 days 
        after receipt of a finding of an independent monitor under 
        subsection (c)(4), a chain participating in the pilot program 
        shall submit to the independent monitor a report--
                    (A) outlining corrective actions the chain will 
                take to implement the recommendations in such report; 
                or
                    (B) indicating that the chain will not implement 
                such recommendations, and why it will not do so.
            (2) Receipt of report by independent monitor.--Not later 
        than 10 days after receipt of a report submitted by a chain 
        under paragraph (1), an independent monitor shall finalize its 
        recommendations and submit a report to the chain and facilities 
        of the chain, the Secretary, and the State or States, as 
        appropriate, containing such final recommendations.
    (e) Cost of Appointment.--A chain shall be responsible for a 
portion of the costs associated with the appointment of independent 
monitors under the pilot program under this section. The chain shall 
pay such portion to the Secretary (in an amount and in accordance with 
procedures established by the Secretary).
    (f) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et 
seq.; 1396 et seq.) as may be necessary for the purpose of carrying out 
the pilot program under this section.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (h) Definitions.--In this section:
            (1) Additional disclosable party.--The term ``additional 
        disclosable party'' has the meaning given such term in section 
        1124(c)(5)(A) of the Social Security Act, as added by section 
        4201(a).
            (2) Facility.--The term ``facility'' means a skilled 
        nursing facility or a nursing facility.
            (3) Nursing facility.--The term ``nursing facility'' has 
        the meaning given such term in section 1919(a) of the Social 
        Security Act (42 U.S.C. 1396r(a)).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services, acting through the Assistant 
        Secretary for Planning and Evaluation.
            (5) Skilled nursing facility.--The term ``skilled nursing 
        facility'' has the meaning given such term in section 1819(a) 
        of the Social Security Act (42 U.S.C. 1395(a)).
    (i) Evaluation and Report.--
            (1) Evaluation.--The Inspector General of the Department of 
        Health and Human Services shall evaluate the pilot program 
        conducted under this subsection.
            (2) Report.--Not later than 180 days after the completion 
        of the pilot program under this section, the Inspector General 
        shall submit to Congress and the Secretary a report containing 
        the results of the evaluation conducted under paragraph (1), 
        together with recommendations--
                    (A) as to whether the independent monitor program 
                should be established on a permanent basis;
                    (B) if the Inspector General recommends that such 
                program be so established, on appropriate procedures 
                and mechanisms for such establishment; and
                    (C) for such legislation and administrative action 
                as the Inspector General determines appropriate.

SEC. 4213. NOTIFICATION OF FACILITY CLOSURE.

    (a) In General.--Section 1128I of the Social Security Act, as added 
and amended by this Act, is amended by adding at the end the following 
new subsection:
    ``(h) Notification of Facility Closure.--
            ``(1) In general.--Any individual who is the administrator 
        of a facility must--
                    ``(A) submit to the Secretary, the State long-term 
                care ombudsman, residents of the facility, and the 
                legal representatives of such residents or other 
                responsible parties, written notification of an 
                impending closure--
                            ``(i) subject to clause (ii), not later 
                        than the date that is 60 days prior to the date 
                        of such closure; and
                            ``(ii) in the case of a facility where the 
                        Secretary terminates the facility's 
                        participation under this title, not later than 
                        the date that the Secretary determines 
                        appropriate;
                    ``(B) ensure that the facility does not admit any 
                new residents on or after the date on which such 
                written notification is submitted; and
                    ``(C) include in the notice a plan for the transfer 
                and adequate relocation of the residents of the 
                facility by a specified date prior to closure that has 
                been approved by the State, including assurances that 
                the residents will be transferred to the most 
                appropriate facility or other setting in terms of 
                quality, services, and location, taking into 
                consideration the needs, choice, and best interests of 
                each resident.
            ``(2) Relocation.--
                    ``(A) In general.--The State shall ensure that, 
                before a facility closes, all residents of the facility 
                have been successfully relocated to another facility or 
                an alternative home and community-based setting.
                    ``(B) Continuation of payments until residents 
                relocated.--The Secretary may, as the Secretary 
                determines appropriate, continue to make payments under 
                this title with respect to residents of a facility that 
                has submitted a notification under paragraph (1) during 
                the period beginning on the date such notification is 
                submitted and ending on the date on which the resident 
                is successfully relocated.
            ``(3) Sanctions.--Any individual who is the administrator 
        of a facility that fails to comply with the requirements of 
        paragraph (1)--
                    ``(A) shall be subject to a civil monetary penalty 
                of up to $1,000,000;
                    ``(B) may be subject to exclusion from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)); and
                    ``(C) shall be subject to any other penalties that 
                may be prescribed by law.
            ``(4) Procedure.--The provisions of section 1128A (other 
        than subsections (a) and (b) and the second sentence of 
        subsection (f)) shall apply to a civil money penalty or 
        exclusion under paragraph (3) in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a).''.
    (b) Conforming Amendments.--Section 1819(h)(4) of the Social 
Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
            (1) in the first sentence, by striking ``the Secretary 
        shall terminate'' and inserting ``the Secretary, subject to 
        section 1128I(h), shall terminate''; and
            (2) in the second sentence, by striking ``subsection 
        (c)(2)'' and inserting ``subsection (c)(2) and section 
        1128I(h)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 4214. NATIONAL DEMONSTRATION PROJECTS ON CULTURE CHANGE AND USE OF 
              INFORMATION TECHNOLOGY IN NURSING HOMES.

    (a) In General.--The Secretary shall conduct 2 demonstration 
projects, 1 for the development of best practices in skilled nursing 
facilities and nursing facilities that are involved in the culture 
change movement (including the development of resources for facilities 
to find and access funding in order to undertake culture change) and 1 
for the development of best practices in skilled nursing facilities and 
nursing facilities for the use of information technology to improve 
resident care.
    (b) Conduct of Demonstration Projects.--
            (1) Grant award.--Under each demonstration project 
        conducted under this section, the Secretary shall award 1 or 
        more grants to facility-based settings for the development of 
        best practices described in subsection (a) with respect to the 
        demonstration project involved. Such award shall be made on a 
        competitive basis and may be allocated in 1 lump-sum payment.
            (2) Consideration of special needs of residents.--Each 
        demonstration project conducted under this section shall take 
        into consideration the special needs of residents of skilled 
        nursing facilities and nursing facilities who have cognitive 
        impairment, including dementia.
    (c) Duration and Implementation.--
            (1) Duration.--The demonstration projects shall each be 
        conducted for a period not to exceed 3 years.
            (2) Implementation.--The demonstration projects shall each 
        be implemented not later than 1 year after the date of the 
        enactment of this Act.
    (d) Definitions.--In this section:
            (1) Nursing facility.--The term ``nursing facility'' has 
        the meaning given such term in section 1919(a) of the Social 
        Security Act (42 U.S.C. 1396r(a)).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (3) Skilled nursing facility.--The term ``skilled nursing 
        facility'' has the meaning given such term in section 1819(a) 
        of the Social Security Act (42 U.S.C. 1395(a)).
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (f) Report.--Not later than 9 months after the completion of the 
demonstration project, the Secretary shall submit to Congress a report 
on such project, together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate.

                   PART III--IMPROVING STAFF TRAINING

SEC. 4221. DEMENTIA AND ABUSE PREVENTION TRAINING.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(f)(2)(A)(i)(I) of the Social 
        Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by 
        inserting ``(including, in the case of initial training and, if 
        the Secretary determines appropriate, in the case of ongoing 
        training, dementia management training, and patient abuse 
        prevention training'' before ``, (II)''.
            (2) Clarification of definition of nurse aide.--Section 
        1819(b)(5)(F) of the Social Security Act (42 U.S.C. 1395i-
        3(b)(5)(F)) is amended by adding at the end the following flush 
        sentence:
                ``Such term includes an individual who provides such 
                services through an agency or under a contract with the 
                facility.''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919(f)(2)(A)(i)(I) of the Social 
        Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by 
        inserting ``(including, in the case of initial training and, if 
        the Secretary determines appropriate, in the case of ongoing 
        training, dementia management training, and patient abuse 
        prevention training'' before ``, (II)''.
            (2) Clarification of definition of nurse aide.--Section 
        1919(b)(5)(F) of the Social Security Act (42 U.S.C. 
        1396r(b)(5)(F)) is amended by adding at the end the following 
        flush sentence:
                ``Such term includes an individual who provides such 
                services through an agency or under a contract with the 
                facility.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

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.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary''), shall establish a 
program to identify efficient, effective, and economical procedures for 
long term care facilities or providers to conduct background checks on 
prospective direct patient access employees on a nationwide basis (in 
this subsection, such program shall be referred to as the ``nationwide 
program''). Except for the following modifications, the Secretary shall 
carry out the nationwide program under similar terms and conditions as 
the pilot program under section 307 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 
Stat. 2257), including the prohibition on hiring abusive workers and 
the authorization of the imposition of penalties by a participating 
State under subsection (b)(3)(A) and (b)(6), respectively, of such 
section 307:
            (1) Agreements.--
                    (A) Newly participating states.--The Secretary 
                shall enter into agreements with each State--
                            (i) that the Secretary has not entered into 
                        an agreement with under subsection (c)(1) of 
                        such section 307;
                            (ii) that agrees to conduct background 
                        checks under the nationwide program on a 
                        Statewide basis; and
                            (iii) that submits an application to the 
                        Secretary containing such information and at 
                        such time as the Secretary may specify.
                    (B) Certain previously participating states.--The 
                Secretary shall enter into agreements with each State--
                            (i) that the Secretary has entered into an 
                        agreement with under such subsection (c)(1), 
                        but only in the case where such agreement did 
                        not require the State to conduct background 
                        checks under the program established under 
                        subsection (a) of such section 307 on a 
                        Statewide basis;
                            (ii) that agrees to conduct background 
                        checks under the nationwide program on a 
                        Statewide basis; and
                            (iii) that submits an application to the 
                        Secretary containing such information and at 
                        such time as the Secretary may specify.
            (2) Nonapplication of selection criteria.--The selection 
        criteria required under subsection (c)(3)(B) of such section 
        307 shall not apply.
            (3) Required fingerprint check as part of criminal history 
        background check.--The procedures established under subsection 
        (b)(1) of such section 307 shall--
                    (A) require that the long-term care facility or 
                provider (or the designated agent of the long-term care 
                facility or provider) obtain State and national 
                criminal history background checks on the prospective 
                employee through such means as the Secretary determines 
                appropriate, efficient, and effective that utilize a 
                search of State-based abuse and neglect registries and 
                databases, including the abuse and neglect registries 
                of another State in the case where a prospective 
                employee previously resided in that State, State 
                criminal history records, the records of any 
                proceedings in the State that may contain disqualifying 
                information about prospective employees (such as 
                proceedings conducted by State professional licensing 
                and disciplinary boards and State Medicaid Fraud 
                Control Units), and Federal criminal history records, 
                including a fingerprint check using the Integrated 
                Automated Fingerprint Identification System of the 
                Federal Bureau of Investigation;
                    (B) require States to describe and test methods 
                that reduce duplicative fingerprinting, including 
                providing for the development of ``rap back'' 
                capability by the State such that, if a direct patient 
                access employee of a long-term care facility or 
                provider is convicted of a crime following the initial 
                criminal history background check conducted with 
                respect to such employee, and the employee's 
                fingerprints match the prints on file with the State 
                law enforcement department, the department will 
                immediately inform the State and the State will 
                immediately inform the long-term care facility or 
                provider which employs the direct patient access 
                employee of such conviction; and
                    (C) require that criminal history background checks 
                conducted under the nationwide program remain valid for 
                a period of time specified by the Secretary.
            (4) State requirements.--An agreement entered into under 
        paragraph (1) shall require that a participating State--
                    (A) be responsible for monitoring compliance with 
                the requirements of the nationwide program;
                    (B) have procedures in place to--
                            (i) conduct screening and criminal history 
                        background checks under the nationwide program 
                        in accordance with the requirements of this 
                        section;
                            (ii) monitor compliance by long-term care 
                        facilities and providers with the procedures 
                        and requirements of the nationwide program;
                            (iii) as appropriate, provide for a 
                        provisional period of employment by a long-term 
                        care facility or provider of a direct patient 
                        access employee, not to exceed 60 days, pending 
                        completion of the required criminal history 
                        background check and, in the case where the 
                        employee has appealed the results of such 
                        background check, pending completion of the 
                        appeals process, during which the employee 
                        shall be subject to direct on-site supervision 
                        (in accordance with procedures established by 
                        the State to ensure that a long-term care 
                        facility or provider furnishes such direct on-
                        site supervision);
                            (iv) provide an independent process by 
                        which a provisional employee or an employee may 
                        appeal or dispute the accuracy of the 
                        information obtained in a background check 
                        performed under the nationwide program, 
                        including the specification of criteria for 
                        appeals for direct patient access employees 
                        found to have disqualifying information which 
                        shall include consideration of the passage of 
                        time, extenuating circumstances, demonstration 
                        of rehabilitation, and relevancy of the 
                        particular disqualifying information with 
                        respect to the current employment of the 
                        individual;
                            (v) provide for the designation of a single 
                        State agency as responsible for--
                                    (I) overseeing the coordination of 
                                any State and national criminal history 
                                background checks requested by a long-
                                term care facility or provider (or the 
                                designated agent of the long-term care 
                                facility or provider) utilizing a 
                                search of State and Federal criminal 
                                history records, including a 
                                fingerprint check of such records;
                                    (II) overseeing the design of 
                                appropriate privacy and security 
                                safeguards for use in the review of the 
                                results of any State or national 
                                criminal history background checks 
                                conducted regarding a prospective 
                                direct patient access employee to 
                                determine whether the employee has any 
                                conviction for a relevant crime;
                                    (III) immediately reporting to the 
                                long-term care facility or provider 
                                that requested the criminal history 
                                background check the results of such 
                                review; and
                                    (IV) in the case of an employee 
                                with a conviction for a relevant crime 
                                that is subject to reporting under 
                                section 1128E of the Social Security 
                                Act (42 U.S.C. 1320a-7e), reporting the 
                                existence of such conviction to the 
                                database established under that 
                                section;
                            (vi) determine which individuals are direct 
                        patient access employees (as defined in 
                        paragraph (6)(B)) for purposes of the 
                        nationwide program;
                            (vii) as appropriate, specify offenses, 
                        including convictions for violent crimes, for 
                        purposes of the nationwide program; and
                            (viii) describe and test methods that 
                        reduce duplicative fingerprinting, including 
                        providing for the development of ``rap back'' 
                        capability such that, if a direct patient 
                        access employee of a long-term care facility or 
                        provider is convicted of a crime following the 
                        initial criminal history background check 
                        conducted with respect to such employee, and 
                        the employee's fingerprints match the prints on 
                        file with the State law enforcement 
                        department--
                                    (I) the department will immediately 
                                inform the State agency designated 
                                under clause (v) and such agency will 
                                immediately inform the facility or 
                                provider which employs the direct 
                                patient access employee of such 
                                conviction; and
                                    (II) the State will provide, or 
                                will require the facility to provide, 
                                to the employee a copy of the results 
                                of the criminal history background 
                                check conducted with respect to the 
                                employee at no charge in the case where 
                                the individual requests such a copy.
            (5) Payments.--
                    (A) Newly participating states.--
                            (i) In general.--As part of the application 
                        submitted by a State under paragraph 
                        (1)(A)(iii), the State shall guarantee, with 
                        respect to the costs to be incurred by the 
                        State in carrying out the nationwide program, 
                        that the State will make available (directly or 
                        through donations from public or private 
                        entities) a particular amount of non-Federal 
                        contributions, as a condition of receiving the 
                        Federal match under clause (ii).
                            (ii) Federal match.--The payment amount to 
                        each State that the Secretary enters into an 
                        agreement with under paragraph (1)(A) shall be 
                        3 times the amount that the State guarantees to 
                        make available under clause (i), except that in 
                        no case may the payment amount exceed 
                        $3,000,000.
                    (B) Previously participating states.--
                            (i) In general.--As part of the application 
                        submitted by a State under paragraph 
                        (1)(B)(iii), the State shall guarantee, with 
                        respect to the costs to be incurred by the 
                        State in carrying out the nationwide program, 
                        that the State will make available (directly or 
                        through donations from public or private 
                        entities) a particular amount of non-Federal 
                        contributions, as a condition of receiving the 
                        Federal match under clause (ii).
                            (ii) Federal match.--The payment amount to 
                        each State that the Secretary enters into an 
                        agreement with under paragraph (1)(B) shall be 
                        3 times the amount that the State guarantees to 
                        make available under clause (i), except that in 
                        no case may the payment amount exceed 
                        $1,500,000.
            (6) Definitions.--Under the nationwide program:
                    (A) Conviction for a relevant crime.--The term 
                ``conviction for a relevant crime'' means any Federal 
                or State criminal conviction for--
                            (i) any offense described in section 
                        1128(a) of the Social Security Act (42 U.S.C. 
                        1320a-7); or
                            (ii) such other types of offenses as a 
                        participating State may specify for purposes of 
                        conducting the program in such State.
                    (B) Disqualifying information.--The term 
                ``disqualifying information'' means a conviction for a 
                relevant crime or a finding of patient or resident 
                abuse.
                    (C) Finding of patient or resident abuse.--The term 
                ``finding of patient or resident abuse'' means any 
                substantiated finding by a State agency under section 
                1819(g)(1)(C) or 1919(g)(1)(C) of the Social Security 
                Act (42 U.S.C. 1395i-3(g)(1)(C), 1396r(g)(1)(C)) or a 
                Federal agency that a direct patient access employee 
                has committed--
                            (i) an act of patient or resident abuse or 
                        neglect or a misappropriation of patient or 
                        resident property; or
                            (ii) such other types of acts as a 
                        participating State may specify for purposes of 
                        conducting the program in such State.
                    (D) Direct patient access employee.--The term 
                ``direct patient access employee'' means any individual 
                who has access to a patient or resident of a long-term 
                care facility or provider through employment or through 
                a contract with such facility or provider and has 
                duties that involve (or may involve) one-on-one contact 
                with a patient or resident of the facility or provider, 
                as determined by the State for purposes of the 
                nationwide program. Such term does not include a 
                volunteer unless the volunteer has duties that are 
                equivalent to the duties of a direct patient access 
                employee and those duties involve (or may involve) one-
                on-one contact with a patient or resident of the long-
                term care facility or provider.
                    (E) Long-term care facility or provider.--The term 
                ``long-term care facility or provider'' means the 
                following facilities or providers which receive payment 
                for services under title XVIII or XIX of the Social 
                Security Act:
                            (i) A skilled nursing facility (as defined 
                        in section 1819(a) of the Social Security Act 
                        (42 U.S.C. 1395i-3(a))).
                            (ii) A nursing facility (as defined in 
                        section 1919(a) of such Act (42 U.S.C. 
                        1396r(a))).
                            (iii) A home health agency.
                            (iv) A provider of hospice care (as defined 
                        in section 1861(dd)(1) of such Act (42 U.S.C. 
                        1395x(dd)(1))).
                            (v) A long-term care hospital (as described 
                        in section 1886(d)(1)(B)(iv) of such Act (42 
                        U.S.C. 1395ww(d)(1)(B)(iv))).
                            (vi) A provider of personal care services.
                            (vii) A provider of adult day care.
                            (viii) A residential care provider that 
                        arranges for, or directly provides, long-term 
                        care services, including an assisted living 
                        facility that provides a level of care 
                        established by the Secretary.
                            (ix) An intermediate care facility for the 
                        mentally retarded (as defined in section 
                        1905(d) of such Act (42 U.S.C. 1396d(d))).
                            (x) Any other facility or provider of long-
                        term care services under such titles as the 
                        participating State determines appropriate.
            (7) Evaluation and report.--
                    (A) Evaluation.--
                            (i) In general.--The Inspector General of 
                        the Department of Health and Human Services 
                        shall conduct an evaluation of the nationwide 
                        program.
                            (ii) Inclusion of specific topics.--The 
                        evaluation conducted under clause (i) shall 
                        include the following:
                                    (I) A review of the various 
                                procedures implemented by participating 
                                States for long-term care facilities or 
                                providers, including staffing agencies, 
                                to conduct background checks of direct 
                                patient access employees under the 
                                nationwide program and identification 
                                of the most appropriate, efficient, and 
                                effective procedures for conducting 
                                such background checks.
                                    (II) An assessment of the costs of 
                                conducting such background checks 
                                (including start up and administrative 
                                costs).
                                    (III) A determination of the extent 
                                to which conducting such background 
                                checks leads to any unintended 
                                consequences, including a reduction in 
                                the available workforce for long-term 
                                care facilities or providers.
                                    (IV) An assessment of the impact of 
                                the nationwide program on reducing the 
                                number of incidents of neglect, abuse, 
                                and misappropriation of resident 
                                property to the extent practicable.
                                    (V) An evaluation of other aspects 
                                of the nationwide program, as 
                                determined appropriate by the 
                                Secretary.
                    (B) Report.--Not later than 180 days after the 
                completion of the nationwide program, the Inspector 
                General of the Department of Health and Human Services 
                shall submit a report to Congress containing the 
                results of the evaluation conducted under subparagraph 
                (A).
    (b) Funding.--
            (1) Notification.--The Secretary of Health and Human 
        Services shall notify the Secretary of the Treasury of the 
        amount necessary to carry out the nationwide program under this 
        section for the period of fiscal years 2010 through 2012, 
        except that in no case shall such amount exceed $160,000,000.
            (2) Transfer of funds.--
                    (A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall provide for the transfer to the 
                Secretary of Health and Human Services of the amount 
                specified as necessary to carry out the nationwide 
                program under paragraph (1). Such amount shall remain 
                available until expended.
                    (B) Reservation of funds for conduct of 
                evaluation.--The Secretary may reserve not more than 
                $3,000,000 of the amount transferred under subparagraph 
                (A) to provide for the conduct of the evaluation under 
                subsection (a)(7)(A).

                 Subtitle E--Pharmacy Benefit Managers

SEC. 4401. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIREMENTS.

    Title XI of the Social Security Act (42 U.S.C. 1301 et seq.), as 
amended by sections 1611(c) and 1923, is amended by inserting after 
section 1150B the following new section:

``SEC. 1150C. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIREMENTS.

    ``(a) Provision of Information.--A health benefits plan or any 
entity that provides pharmacy benefits management services on behalf of 
a health benefits plan (in this section referred to as a `PBM') that 
manages prescription drug coverage under a contract with--
            ``(1) a PDP sponsor of a prescription drug plan or an MA 
        organization offering an MA-PD plan under part D of title 
        XVIII; or
            ``(2) a qualified health benefits plan offered through an 
        exchange established by a State under title XXII,
shall provide the information described in subsection (b) to the 
Secretary and, in the case of a PBM, to the plan with which the PBM is 
under contract with, at such times, and in such form and manner, as the 
Secretary shall specify.
    ``(b) Information Described.--The information described in this 
subsection is the following with respect to services provided by a 
health benefits plan or PBM for a contract year:
            ``(1) The percentage of all prescriptions that were 
        provided through retail pharmacies compared to mail order 
        pharmacies, and the percentage of prescriptions for which a 
        generic drug was available and dispensed (generic dispensing 
        rate), by pharmacy type (which includes an independent 
        pharmacy, chain pharmacy, supermarket pharmacy, or mass 
        merchandiser pharmacy that is licensed as a pharmacy by the 
        State and that dispenses medication to the general public), 
        that is paid by the health benefits plan or PBM under the 
        contract.
            ``(2) The aggregate amount, and the type of rebates, 
        discounts, or price concessions (excluding bona fide service 
        fees, which include but are not limited to distribution service 
        fees, inventory management fees, product stocking allowances, 
        and fees associated with administrative services agreements and 
        patient care programs (such as medication compliance programs 
        and patient education programs))that the PBM negotiates that 
        are attributable to patient utilization under the plan, and the 
        aggregate amount of the rebates, discounts, or price 
        concessions that are passed through to the plan sponsor, and 
        the total number of prescriptions that were dispensed.
            ``(3) The aggregate amount of the difference between the 
        amount the health benefits plan pays the PBM and the amount 
        that the PBM pays retail pharmacies, and mail order pharmacies, 
        and the total number of prescriptions that were dispensed.
    ``(c) Confidentiality.--Information disclosed by a health benefits 
plan or PBM under this section is confidential and shall not be 
disclosed by the Secretary or by a plan receiving the information, 
except that the Secretary may disclose the information in a form which 
does not disclose the identity of a specific PBM, plan, or prices 
charged for drugs, for the following purposes:
            ``(1) As the Secretary determines to be necessary to carry 
        out this section or part D of title XVIII.
            ``(2) To permit the Comptroller General to review the 
        information provided.
            ``(3) To permit the Director of the Congressional Budget 
        Office to review the information provided.
            ``(4) To States to carry out title XXII.
    ``(d) Penalties.--The provisions of subsection (b)(3)(C) of section 
1927 shall apply to a health benefits plan or PBM that fails to provide 
information required under subsection (a) on a timely basis or that 
knowingly provides false information in the same manner as such 
provisions apply to a manufacturer with an agreement under that 
section.''.

                    TITLE V--FRAUD, WASTE, AND ABUSE

                Subtitle A--Medicare, Medicaid, and CHIP

SEC. 5001. PROVIDER SCREENING AND OTHER ENROLLMENT REQUIREMENTS UNDER 
              MEDICARE, MEDICAID, AND CHIP.

    (a) Medicare.--Section 1866(j) of the Social Security Act (42 
U.S.C. 1395cc(j)) is amended--
            (1) in paragraph (1)(A), by adding at the end the 
        following: ``Such process shall include screening of providers 
        and suppliers in accordance with paragraph (2), a provisional 
        period of enhanced oversight in accordance with paragraph (3), 
        disclosure requirements in accordance with paragraph (4), the 
        imposition of temporary enrollment moratoria in accordance with 
        paragraph (5), and the establishment of compliance programs in 
        accordance with paragraph (6).'';
            (2) by redesignating paragraph (2) as paragraph (7); and
            (3) by inserting after paragraph (1) the following:
            ``(2) Provider screening.--
                    ``(A) Procedures.--Not later than 180 days after 
                the date of enactment of this paragraph, the Secretary, 
                in consultation with the Inspector General of the 
                Department of Health and Human Services, shall 
                establish procedures under which screening is conducted 
                with respect to providers of medical or other items or 
                services and suppliers under the program under this 
                title, the Medicaid program under title XIX, and the 
                CHIP program under title XXI.
                    ``(B) Level of screening.--The Secretary shall 
                determine the level of screening conducted under this 
                paragraph according to the risk of fraud, waste, and 
                abuse, as determined by the Secretary, with respect to 
                the category of provider of medical or other items or 
                services or supplier. Such screening--
                            ``(i) shall include a licensure check, 
                        which may include such checks across States; 
                        and
                            ``(ii) may, as the Secretary determines 
                        appropriate based on the risk of fraud, waste, 
                        and abuse described in the preceding sentence, 
                        include--
                                    ``(I) a criminal background check;
                                    ``(II) fingerprinting;
                                    ``(III) unscheduled and unannounced 
                                site visits, including preenrollment 
                                site visits;
                                    ``(IV) database checks (including 
                                such checks across States); and
                                    ``(V) such other screening as the 
                                Secretary determines appropriate.
                    ``(C) Application fees.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) or (iii), the Secretary shall 
                        impose a fee on each provider of medical or 
                        other items or services or supplier with 
                        respect to which screening is conducted under 
                        this paragraph in an amount equal to--
                                    ``(I) for 2010, $350; and
                                    ``(II) for 2011 and each subsequent 
                                year, the amount determined under this 
                                clause for the preceding year, adjusted 
                                by the percentage change in the 
                                consumer price index for all urban 
                                consumers (all items; United States 
                                city average) for the 12-month period 
                                ending with June of the previous year.
                            ``(ii) Temporary reduced fee for current 
                        providers of services and suppliers.--In the 
                        case of a provider of medical or other items or 
                        services or supplier who is enrolled in the 
                        program under this title, title XIX, or title 
                        XXI as of the date of enactment of this 
                        paragraph, during the period beginning on such 
                        date of enactment and ending on the date that 
                        is 1 year after such date, the amount of the 
                        fee imposed under this subparagraph shall be 
                        equal to $250. Such fee shall be imposed with 
                        respect to all providers of medical or other 
                        items and services and suppliers described in 
                        the preceding sentence, regardless of whether 
                        the provider or supplier is due for 
                        revalidation of enrollment in the program 
                        during such period.
                            ``(iii) Hardship exception; waiver for 
                        certain medicaid providers.--The Secretary may, 
                        on a case-by-case basis, exempt a provider of 
                        medical or other items or services or supplier 
                        from the imposition of an application fee under 
                        this subparagraph if the Secretary determines 
                        that the imposition of the application fee 
                        would result in a hardship. The Secretary may 
                        waive the application fee under this 
                        subparagraph for providers enrolled in a State 
                        Medicaid program for whom the State 
                        demonstrates that imposition of the fee would 
                        impede beneficiary access to care.
                            ``(iv) Use of funds.--Amounts collected as 
                        a result of the imposition of a fee under this 
                        subparagraph shall be used by the Secretary for 
                        program integrity efforts, including to cover 
                        the costs of conducting screening under this 
                        paragraph and to carry out this subsection and 
                        section 1128J.
                    ``(D) Application and enforcement.--
                            ``(i) New providers of services and 
                        suppliers.--The screening under this paragraph 
                        shall apply, in the case of a provider of 
                        medical or other items or services or supplier 
                        who is not enrolled in the program under this 
                        title, title XIX , or title XXI as of the date 
                        of enactment of this paragraph, on or after the 
                        date that is 1 year after such date of 
                        enactment.
                            ``(ii) Current providers of services and 
                        suppliers.--The screening under this paragraph 
                        shall apply, in the case of a provider of 
                        medical or other items or services or supplier 
                        who is enrolled in the program under this 
                        title, title XIX, or title XXI as of such date 
                        of enactment, on or after the date that is 2 
                        years after such date of enactment.
                            ``(iii) Revalidation of enrollment.--
                        Effective beginning on the date that is 180 
                        days after such date of enactment, the 
                        screening under this paragraph shall apply with 
                        respect to the revalidation of enrollment of a 
                        provider of medical or other items or services 
                        or supplier in the program under this title, 
                        title XIX, or title XXI.
                            ``(iv) Limitation on enrollment and 
                        revalidation of enrollment.--In no case may a 
                        provider of medical or other items or services 
                        or supplier who has not been screened under 
                        this paragraph be initially enrolled or 
                        reenrolled in the program under this title, 
                        title XIX, or title XXI on or after the date 
                        that is 3 years after such date of enactment.
                    ``(E) Expedited rulemaking.--The Secretary may 
                promulgate an interim final rule to carry out this 
                paragraph.
            ``(3) Provisional period of enhanced oversight for new 
        providers of services and suppliers.--
                    ``(A) In general.--The Secretary shall establish 
                procedures to provide for a provisional period of not 
                less than 30 days and not more than 1 year during which 
                new providers of medical or other items or services and 
                suppliers, as the Secretary determines appropriate, 
                including categories of providers or suppliers, would 
                be subject to enhanced oversight, such as prepayment 
                review and payment caps, under the program under this 
                title, the Medicaid program under title XIX. and the 
                CHIP program under title XXI.
                    ``(B) Implementation.--The Secretary may establish 
                by program instruction or otherwise the procedures 
                under this paragraph.
            ``(4) Increased disclosure requirements.--
                    ``(A) Disclosure.--A provider of medical or other 
                items or services or supplier who submits an 
                application for enrollment or revalidation of 
                enrollment in the program under this title , title XIX, 
                or title XXI on or after the date that is 1 year after 
                the date of enactment of this paragraph shall disclose 
                (in a form and manner and at such time as determined by 
                the Secretary) any current or previous affiliation 
                (directly or indirectly) with a provider of medical or 
                other items or services or supplier that has 
                uncollected debt, has been or is subject to a payment 
                suspension under a Federal health care program (as 
                defined in section 1128B(f)), has been excluded from 
                participation under the program under this title, the 
                Medicaid program under title XIX, or the CHIP program 
                under title XXI, or has had its billing privileges 
                denied or revoked.
                    ``(B) Authority to deny enrollment.--If the 
                Secretary determines that such previous affiliation 
                poses an undue risk of fraud, waste, or abuse, the 
                Secretary may deny such application. Such a denial 
                shall be subject to appeal in accordance with paragraph 
                (7).
            ``(5) Authority to adjust payments of providers of services 
        and suppliers with the same tax identification number for past-
        due obligations.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this title, in the case of an applicable 
                provider of services or supplier, the Secretary may 
                make any necessary adjustments to payments to the 
                applicable provider of services or supplier under the 
                program under this title in order to satisfy any past-
                due obligations described in subparagraph (B)(ii) of an 
                obligated provider of services or supplier.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) In general.--The term `applicable 
                        provider of services or supplier' means a 
                        provider of services or supplier that has the 
                        same taxpayer identification number assigned 
                        under section 6109 of the Internal Revenue Code 
                        of 1986 as is assigned to the obligated 
                        provider of services or supplier under such 
                        section, regardless of whether the applicable 
                        provider of services or supplier is assigned a 
                        different billing number or national provider 
                        identification number under the program under 
                        this title than is assigned to the obligated 
                        provider of services or supplier.
                            ``(ii) Obligated provider of services or 
                        supplier.--The term `obligated provider of 
                        services or supplier' means a provider of 
                        services or supplier that owes a past-due 
                        obligation under the program under this title 
                        (as determined by the Secretary).
            ``(6) Temporary moratorium on enrollment of new 
        providers.--
                    ``(A) In general.--The Secretary may impose a 
                temporary moratorium on the enrollment of new providers 
                of services and suppliers, including categories of 
                providers of services and suppliers, in the program 
                under this title, under the Medicaid program under 
                title XIX, or under the CHIP program under title XXI if 
                the Secretary determines such moratorium is necessary 
                to prevent or combat fraud, waste, or abuse under 
                either such program.
                    ``(B) Limitation on review.--There shall be no 
                judicial review under section 1869, section 1878, or 
                otherwise, of a temporary moratorium imposed under 
                subparagraph (A).
            ``(7) Compliance programs.--
                    ``(A) In general.--On or after the date of 
                implementation determined by the Secretary under 
                subparagraph (C), a provider of medical or other items 
                or services or supplier within a particular industry 
                sector or category shall, as a condition of enrollment 
                in the program under this title, title XIX, or title 
                XXI, establish a compliance program that contains the 
                core elements established under subparagraph (B) with 
                respect to that provider or supplier and industry or 
                category.
                    ``(B) Establishment of core elements.--The 
                Secretary, in consultation with the Inspector General 
                of the Department of Health and Human Services, shall 
                establish core elements for a compliance program under 
                subparagraph (A) for providers or suppliers within a 
                particular industry or category.
                    ``(C) Timeline for implementation.--The Secretary 
                shall determine the timeline for the establishment of 
                the core elements under subparagraph (B) and the date 
                of the implementation of subparagraph (A) for providers 
                or suppliers within a particular industry or category. 
                The Secretary shall, in determining such date of 
                implementation, consider the extent to which the 
                adoption of compliance programs by a provider of 
                medical or other items or services or supplier is 
                widespread in a particular industry sector or with 
                respect to a particular provider or supplier 
                category.''.
    (b) Medicaid.--
            (1) State plan amendment.--Section 1902(a) of the Social 
        Security Act (42 U.S.C. 1396a(a)), as amended by sections 
        1601(d) and 1640, is amended--
                    (A) in subsection (a)--
                            (i) by striking ``and'' at the end of 
                        paragraph (74);
                            (ii) by striking the period at the end of 
                        paragraph (75) and inserting a semicolon; and
                            (iii) by inserting after paragraph (75) the 
                        following:
            ``(76) provide that the State shall comply with provider 
        and supplier screening, oversight, and reporting requirements 
        in accordance with subsection (ii);''; and
                    (B) by adding at the end the following:
    ``(ii) Provider and Supplier Screening, Oversight, and Reporting 
Requirements.--For purposes of subsection (a)(75), the requirements of 
this subsection are the following:
            ``(1) Screening.--The State complies with the process for 
        screening providers and suppliers under this title, as 
        established by the Secretary under section 1886(j)(2).
            ``(2) Provisional period of enhanced oversight for new 
        providers and suppliers.--The State complies with procedures to 
        provide for a provisional period of enhanced oversight for new 
        providers and suppliers under this title, as established by the 
        Secretary under section 1886(j)(3).
            ``(3) Disclosure requirements.--The State requires 
        providers and suppliers under the State plan or under a waiver 
        of the plan to comply with the disclosure requirements 
        established by the Secretary under section 1886(j)(4).
            ``(4) Temporary moratorium on enrollment of new providers 
        or suppliers.--
                    ``(A) Temporary moratorium imposed by the 
                secretary.--
                            ``(i) In general.--Subject to clause (ii), 
                        the State complies with any temporary 
                        moratorium on the enrollment of new providers 
                        or suppliers imposed by the Secretary under 
                        section 1886(j)(6).
                            ``(ii) Exception.--A State shall not be 
                        required to comply with a temporary moratorium 
                        described in clause (i) if the State determines 
                        that the imposition of such temporary 
                        moratorium would adversely impact 
                        beneficiaries' access to medical assistance.
                    ``(B) Moratorium on enrollment of providers and 
                suppliers.--At the option of the State, the State 
                imposes, for purposes of entering into participation 
                agreements with providers or suppliers under the State 
                plan or under a waiver of the plan, periods of 
                enrollment moratoria, or numerical caps or other 
                limits, for providers or suppliers identified by the 
                Secretary as being at high-risk for fraud, waste, or 
                abuse as necessary to combat fraud, waste, or abuse, 
                but only if the State determines that the imposition of 
                any such period, cap, or other limits would not 
                adversely impact beneficiaries' access to medical 
                assistance.
            ``(5) Compliance programs.--The State requires providers 
        and suppliers under the State plan or under a waiver of the 
        plan to establish, in accordance with the requirements of 
        section 1866(j)(7), a compliance program that contains the core 
        elements established under subparagraph (B) of that section 
        1866(j)(7) for providers or suppliers within a particular 
        industry or category.
            ``(6) Reporting of adverse provider actions.--The State 
        complies with the national system for reporting criminal and 
        civil convictions, sanctions, negative licensure actions, and 
        other adverse provider actions to the Secretary, through the 
        Administrator of the Centers for Medicare & Medicaid Services, 
        in accordance with regulations of the Secretary.
            ``(7) Enrollment and npi of ordering or referring 
        providers.--The State requires--
                    ``(A) all ordering or referring physicians or other 
                professionals to be enrolled under the State plan or 
                under a waiver of the plan as a participating provider; 
                and
                    ``(B) the national provider identifier of any 
                ordering or referring physician or other professional 
                to be specified on any claim for payment that is based 
                on an order or referral of the physician or other 
                professional.
            ``(8) Other state oversight.--Nothing in this subsection 
        shall be interpreted to preclude or limit the ability of a 
        State to engage in provider and supplier screening or enhanced 
        provider and supplier oversight activities beyond those 
        required by the Secretary.''.
            (2) Disclosure of medicare terminated providers and 
        suppliers to states.--The Administrator of the Centers for 
        Medicare & Medicaid Services shall establish a process for 
        making available to the each State agency with responsibility 
        for administering a State Medicaid plan (or a waiver of such 
        plan) under title XIX of the Social Security Act or a child 
        health plan under title XXI the name, national provider 
        identifier, and other identifying information for any provider 
        of medical or other items or services or supplier under the 
        Medicare program under title XVIII or under the CHIP program 
        under title XXI that is terminated from participation under 
        that program within 30 days of the termination (and, with 
        respect to all such providers or suppliers who are terminated 
        from the Medicare program on the date of enactment of this Act, 
        within 90 days of such date).
            (3) Conforming amendment.--Section 1902(a)(23) of the 
        Social Security Act (42 U.S.C. 1396a), is amended by inserting 
        before the semicolon at the end the following: ``or by a 
        provider or supplier to which a moratorium under subsection 
        (ii)(4) is applied during the period of such moratorium''.
    (c) CHIP.--Section 2107(e)(1) of the Social Security Act (42 U.S.C. 
1397gg(e)(1)), as amended by section 1611(d), is amended--
            (1) by redesignating subparagraphs (D) through (M) as 
        subparagraphs (E) through (N), respectively; and
            (2) by inserting after subparagraph (C), the following:
                    ``(D) Subsections (a)(76) and (ii) of section 1902 
                (relating to provider and supplier screening, 
                oversight, and reporting requirements).''.

SEC. 5002. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.), as amended by section 4202, is amended by 
inserting after section 1128I the following new section:

``SEC. 1128J. MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    ``(a) Data Matching.--
            ``(1) Integrated data repository.--
                    ``(A) Inclusion of certain data.--
                            ``(i) In general.--The Integrated Data 
                        Repository of the Centers for Medicare & 
                        Medicaid Services shall include, at a minimum, 
                        claims and payment data from the following:
                                    ``(I) The programs under titles 
                                XVIII and XIX (including parts A, B, C, 
                                and D of title XVIII).
                                    ``(II) The program under title XXI.
                                    ``(III) Health-related programs 
                                administered by the Secretary of 
                                Veterans Affairs.
                                    ``(IV) Health-related programs 
                                administered by the Secretary of 
                                Defense.
                                    ``(V) The program of old-age, 
                                survivors, and disability insurance 
                                benefits established under title II.
                                    ``(VI) The Indian Health Service 
                                and the Contract Health Service 
                                program.
                            ``(ii) Priority for inclusion of certain 
                        data.--Inclusion of the data described in 
                        subclause (I) of such clause in the Integrated 
                        Data Repository shall be a priority. Data 
                        described in subclauses (II) through (VI) of 
                        such clause shall be included in the Integrated 
                        Data Repository as appropriate.
                    ``(B) Data sharing and matching.--
                            ``(i) In general.--The Secretary shall 
                        enter into agreements with the individuals 
                        described in clause (ii) under which such 
                        individuals share and match data in the system 
                        of records of the respective agencies of such 
                        individuals with data in the system of records 
                        of the Department of Health and Human Services 
                        for the purpose of identifying potential fraud, 
                        waste, and abuse under the programs under 
                        titles XVIII and XIX.
                            ``(ii) Individuals described.--The 
                        following individuals are described in this 
                        clause:
                                    ``(I) The Commissioner of Social 
                                Security.
                                    ``(II) The Secretary of Veterans 
                                Affairs.
                                    ``(III) The Secretary of Defense.
                                    ``(IV) The Director of the Indian 
                                Health Service.
                            ``(iii) Definition of system of records.--
                        For purposes of this paragraph, the term 
                        `system of records' has the meaning given such 
                        term in section 552a(a)(5) of title 5, United 
                        States Code.
            ``(2) Access to claims and payment databases.--For purposes 
        of conducting law enforcement and oversight activities and to 
        the extent consistent with applicable information, privacy, 
        security, and disclosure laws, including the regulations 
        promulgated under the Health Insurance Portability and 
        Accountability Act of 1996 and section 552a of title 5, United 
        States Code, and subject to any information systems security 
        requirements under such laws or otherwise required by the 
        Secretary, the Inspector General of the Department of Health 
        and Human Services and the Attorney General shall have access 
        to claims and payment data of the Department of Health and 
        Human Services and its contractors related to titles XVIII, 
        XIX, and XXI.
    ``(b) OIG Authority To Obtain Information.--
            ``(1) In general.--Notwithstanding and in addition to any 
        other provision of law, the Inspector General of the Department 
        of Health and Human Services may, for purposes of protecting 
        the integrity of the programs under titles XVIII and XIX, 
        obtain information from any individual (including a beneficiary 
        provided all applicable privacy protections are followed) or 
        entity that--
                    ``(A) is a provider of medical or other items or 
                services, supplier, grant recipient, contractor, or 
                subcontractor; or
                    ``(B) directly or indirectly provides, orders, 
                manufactures, distributes, arranges for, prescribes, 
                supplies, or receives medical or other items or 
                services payable by any Federal health care program (as 
                defined in section 1128B(f)) regardless of how the item 
                or service is paid for, or to whom such payment is 
                made.
            ``(2) Inclusion of certain information.--Information which 
        the Inspector General may obtain under paragraph (1) includes 
        any supporting documentation necessary to validate claims for 
        payment or payments under title XVIII or XIX, including a 
        prescribing physician's medical records for an individual who 
        is prescribed an item or service which is covered under part B 
        of title XVIII, a covered part D drug (as defined in section 
        1860D-2(e)) for which payment is made under an MA-PD plan under 
        part C of such title, or a prescription drug plan under part D 
        of such title, and any records necessary for evaluation of the 
        economy, efficiency, and effectiveness of the programs under 
        titles XVIII and XIX.
    ``(c) Administrative Remedy for Knowing Participation by 
Beneficiary in Health Care Fraud Scheme.--
            ``(1) In general.--In addition to any other applicable 
        remedies, if an applicable individual has knowingly 
        participated in a Federal health care fraud offense or a 
        conspiracy to commit a Federal health care fraud offense, the 
        Secretary shall impose an appropriate administrative penalty 
        commensurate with the offense or conspiracy.
            ``(2) Applicable individual.--For purposes of paragraph 
        (1), the term `applicable individual' means an individual--
                    ``(A) entitled to, or enrolled for, benefits under 
                part A of title XVIII or enrolled under part B of such 
                title;
                    ``(B) eligible for medical assistance under a State 
                plan under title XIX or under a waiver of such plan; or
                    ``(C) eligible for child health assistance under a 
                child health plan under title XXI.
    ``(d) Reporting and Returning of Overpayments.--
            ``(1) In general.--If a person has received an overpayment, 
        the person shall--
                    ``(A) report and return the overpayment to the 
                Secretary, the State, an intermediary, a carrier, or a 
                contractor, as appropriate, at the correct address; and
                    ``(B) notify the Secretary, State, intermediary, 
                carrier, or contractor to whom the overpayment was 
                returned in writing of the reason for the overpayment.
            ``(2) Deadline for reporting and returning overpayments.--
        An overpayment must be reported and returned under paragraph 
        (1) by the later of--
                    ``(A) the date which is 60 days after the date on 
                which the overpayment was identified; or
                    ``(B) the date any corresponding cost report is 
                due, if applicable.
            ``(3) Enforcement.--Any overpayment retained by a person 
        after the deadline for reporting and returning the overpayment 
        under paragraph (2) is an obligation (as defined in section 
        3729(b)(3) of title 31, United States Code) for purposes of 
        section 3729 of such title.
            ``(4) Definitions.--In this subsection:
                    ``(A) Knowing and knowingly.--The terms `knowing' 
                and `knowingly' have the meaning given those terms in 
                section 3729(b) of title 31, United States Code.
                    ``(B) Overpayment.--The term ``overpayment'' means 
                any funds that a person receives or retains under title 
                XVIII or XIX to which the person, after applicable 
                reconciliation, is not entitled under such title.
                    ``(C) Person.--
                            ``(i) In general.--The term `person' means 
                        a provider of services, supplier, medicaid 
                        managed care organization (as defined in 
                        section 1903(m)(1)(A)), Medicare Advantage 
                        organization (as defined in section 
                        1859(a)(1)), or PDP sponsor (as defined in 
                        section 1860D-41(a)(13)).
                            ``(ii) Exclusion.--Such term does not 
                        include a beneficiary.
    ``(e) Inclusion of National Provider Identifier on All Applications 
and Claims.--The Secretary shall promulgate a regulation that requires, 
not later than January 1, 2011, all providers of medical or other items 
or services and suppliers under the programs under titles XVIII and XIX 
that qualify for a national provider identifier to include their 
national provider identifier on all applications to enroll in such 
programs and on all claims for payment submitted under such 
programs.''.
    (b) Access to Data.--
            (1) Medicare part d.--Section 1860D-15(f)(2) of the Social 
        Security Act (42 U.S.C. 1395w-116(f)(2)) is amended by striking 
        ``may be used by'' and all that follows through the period at 
        the end and inserting ``may be used--
                    ``(A) by officers, employees, and contractors of 
                the Department of Health and Human Services for the 
                purposes of, and to the extent necessary in--
                            ``(i) carrying out this section; and
                            ``(ii) conducting oversight, evaluation, 
                        and enforcement under this title; and
                    ``(B) by the Attorney General and the Comptroller 
                General of the United States for the purposes of, and 
                to the extent necessary in, carrying out health 
                oversight activities.''.
            (2) Data matching.--Section 552a(a)(8)(B) of title 5, 
        United States Code, is amended--
                    (A) in clause (vii), by striking ``or'' at the end;
                    (B) in clause (viii), by inserting ``or'' after the 
                semicolon; and
                    (C) by adding at the end the following new clause:
                            ``(ix) matches performed by the Secretary 
                        of Health and Human Services or the Inspector 
                        General of the Department of Health and Human 
                        Services with respect to potential fraud, 
                        waste, and abuse, including matches of a system 
                        of records with non-Federal records;''.
            (3) Matching agreements with the commissioner of social 
        security.--Section 205(r) of the Social Security Act (42 U.S.C. 
        405(r)) is amended by adding at the end the following new 
        paragraph:
            ``(9)(A) The Commissioner of Social Security shall, upon 
        the request of the Secretary or the Inspector General of the 
        Department of Health and Human Services--
                    ``(i) enter into an agreement with the Secretary or 
                such Inspector General for the purpose of matching data 
                in the system of records of the Social Security 
                Administration and the system of records of the 
                Department of Health and Human Services; and
                    ``(ii) include in such agreement safeguards to 
                assure the maintenance of the confidentiality of any 
                information disclosed.
            ``(B) For purposes of this paragraph, the term `system of 
        records' has the meaning given such term in section 552a(a)(5) 
        of title 5, United States Code.''.
    (c) Withholding of Federal Matching Payments for States That Fail 
to Report Enrollee Encounter Data in the Medicaid Statistical 
Information System.--Section 1903(i) of the Social Security Act (42 
U.S.C. 1396b(i)) is amended--
            (1) in paragraph (23), by striking ``or'' at the end;
            (2) in paragraph (24), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following new paragraph:.
            ``(25) with respect to any amounts expended for medical 
        assistance for individuals for whom the State does not report 
        enrollee encounter data (as defined by the Secretary) to the 
        Medicaid Statistical Information System (MSIS) in a timely 
        manner (as determined by the Secretary).''.
    (d) Permissive Exclusions and Civil Monetary Penalties.--
            (1) Permissive exclusions.--Section 1128(b) of the Social 
        Security Act (42 U.S.C. 1320a-7(b)) is amended by adding at the 
        end the following new paragraph:
            ``(16) Making false statements or misrepresentation of 
        material facts.--Any individual or entity that knowingly makes 
        or causes to be made any false statement, omission, or 
        misrepresentation of a material fact in any application, 
        agreement, bid, or contract to participate or enroll as a 
        provider of services or supplier under a Federal health care 
        program (as defined in section 1128B(f)), including Medicare 
        Advantage organizations under part C of title XVIII, 
        prescription drug plan sponsors under part D of title XVIII, 
        medicaid managed care organizations under title XIX, and 
        entities that apply to participate as providers of services or 
        suppliers in such managed care organizations and such plans.''.
            (2) Civil monetary penalties.--
                    (A) In general.--Section 1128A(a) of the Social 
                Security Act (42 U.S.C. 1320a-7a(a)) is amended--
                            (i) in paragraph (1)(D), by striking ``was 
                        excluded'' and all that follows through the 
                        period at the end and inserting ``was excluded 
                        from the Federal health care program (as 
                        defined in section 1128B(f)) under which the 
                        claim was made pursuant to Federal law.'';
                            (ii) in paragraph (6), by striking ``or'' 
                        at the end;
                            (iii) by inserting after paragraph (7), the 
                        following new paragraphs:
            ``(8) orders or prescribes a medical or other item or 
        service during a period in which the person was excluded from a 
        Federal health care program (as so defined), in the case where 
        the person knows or should know that a claim for such medical 
        or other item or service will be made under such a program;
            ``(9) knowingly makes or causes to be made any false 
        statement, omission, or misrepresentation of a material fact in 
        any application, bid, or contract to participate or enroll as a 
        provider of services or a supplier under a Federal health care 
        program (as so defined), including Medicare Advantage 
        organizations under part C of title XVIII, prescription drug 
        plan sponsors under part D of title XVIII, medicaid managed 
        care organizations under title XIX, and entities that apply to 
        participate as providers of services or suppliers in such 
        managed care organizations and such plans;
            ``(10) knows of an overpayment (as defined in paragraph (4) 
        of section 1128J(d)) and does not report and return the 
        overpayment in accordance with such section;'';
                            (iv) in the first sentence--
                                    (I) by striking the ``or'' after 
                                ``prohibited relationship occurs;''; 
                                and
                                    (II) by striking ``act)'' and 
                                inserting ``act; or in cases under 
                                paragraph (9), $50,000 for each false 
                                statement or misrepresentation of a 
                                material fact)''; and
                            (v) in the second sentence, by striking 
                        ``purpose)'' and inserting ``purpose; or in 
                        cases under paragraph (9), an assessment of not 
                        more than 3 times the total amount claimed for 
                        each item or service for which payment was made 
                        based upon the application containing the false 
                        statement or misrepresentation of a material 
                        fact)''.
                    (B) Clarification of treatment of certain 
                charitable and other innocuous programs.--Section 
                1128A(i)(6) of the Social Security Act (42 U.S.C. 
                1320a-7a(i)(6)) is amended--
                            (i) in subparagraph (C), by striking ``or'' 
                        at the end;
                            (ii) in subparagraph (D), as redesignated 
                        by section 4331(e) of the Balanced Budget Act 
                        of 1997 (Public Law 105-33), by striking the 
                        period at the end and inserting a semicolon;
                            (iii) by redesignating subparagraph (D), as 
                        added by section 4523(c) of such Act, as 
                        subparagraph (E) and striking the period at the 
                        end and inserting ``; or''; and
                            (iv) by adding at the end the following new 
                        subparagraphs:
                    ``(F) any other remuneration which promotes access 
                to care and poses a low risk of harm to patients and 
                Federal health care programs (as defined in section 
                1128B(f) and designated by the Secretary under 
                regulations);
                    ``(G) the offer or transfer of items or services 
                for free or less than fair market value by a person, 
                if--
                            ``(i) the items or services consist of 
                        coupons, rebates, or other rewards from a 
                        retailer;
                            ``(ii) the items or services are offered or 
                        transferred on equal terms available to the 
                        general public, regardless of health insurance 
                        status; and
                            ``(iii) the offer or transfer of the items 
                        or services is not tied to the provision of 
                        other items or services reimbursed in whole or 
                        in part by the program under title XVIII or a 
                        State health care program (as defined in 
                        section 1128(h));
                    ``(H) the offer or transfer of items or services 
                for free or less than fair market value by a person, 
                if--
                            ``(i) the items or services are not offered 
                        as part of any advertisement or solicitation;
                            ``(ii) the items or services are not tied 
                        to the provision of other services reimbursed 
                        in whole or in part by the program under title 
                        XVIII or a State health care program (as so 
                        defined);
                            ``(iii) there is a reasonable connection 
                        between the items or services and the medical 
                        care of the individual; and
                            ``(iv) the person provides the items or 
                        services after determining in good faith that 
                        the individual is in financial need; or
                    ``(I) effective on a date specified by the 
                Secretary (but not earlier than January 1, 2011), the 
                waiver by a PDP sponsor of a prescription drug plan 
                under part D of title XVIII or an MA organization 
                offering an MA-PD plan under part C of such title of 
                any copayment for the first fill of a covered part D 
                drug (as defined in section 1860D-2(e)) that is a 
                generic drug for individuals enrolled in the 
                prescription drug plan or MA-PD plan, respectively.''.
    (e) Testimonial Subpoena Authority in Exclusion-only Cases.--
Section 1128(f) of the Social Security Act (42 U.S.C. 1320a-7(f)) is 
amended by adding at the end the following new paragraph:
            ``(4) The provisions of subsections (d) and (e) of section 
        205 shall apply with respect to this section to the same extent 
        as they are applicable with respect to title II. The Secretary 
        may delegate the authority granted by section 205(d) (as made 
        applicable to this section) to the Inspector General of the 
        Department of Health and Human Services for purposes of any 
        investigation under this section.''.
    (f) Revising the Intent Requirement for Health Care Fraud.--Section 
1128B of the Social Security Act (42 U.S.C. 1320a-7b) is amended by 
adding at the end the following new subsection:
    ``(g) With respect to violations of this section, a person need not 
have actual knowledge of this section or specific intent to commit a 
violation of this section.''.
    (g) Surety Bond Requirements.--
            (1) Durable medical equipment.--Section 1834(a)(16)(B) of 
        the Social Security Act (42 U.S.C. 1395m(a)(16)(B)) is amended 
        by inserting ``that the Secretary determines is commensurate 
        with the volume of the billing of the supplier'' before the 
        period at the end.
            (2) Home health agencies.--Section 1861(o)(7)(C) of the 
        Social Security Act (42 U.S.C. 1395x(o)(7)(C)) is amended by 
        inserting ``that the Secretary determines is commensurate with 
        the volume of the billing of the home health agency'' before 
        the semicolon at the end.
            (3) Requirements for certain other providers of services 
        and suppliers.--Section 1862 of the Social Security Act (42 
        U.S.C. 1395y) is amended by adding at the end the following new 
        subsection:
    ``(n) Requirement of a Surety Bond for Certain Providers of 
Services and Suppliers.--
            ``(1) In general.--The Secretary may require a provider of 
        services or supplier described in paragraph (2) to provide the 
        Secretary on a continuing basis with a surety bond in a form 
        specified by the Secretary in an amount (not less than $50,000) 
        that the Secretary determines is commensurate with the volume 
        of the billing of the provider of services or supplier. The 
        Secretary may waive the requirement of a bond under the 
        preceding sentence in the case of a provider of services or 
        supplier that provides a comparable surety bond under State 
        law.
            ``(2) Provider of services or supplier described.--A 
        provider of services or supplier described in this paragraph is 
        a provider of services or supplier the Secretary determines 
        appropriate based on the level of risk involved with respect to 
        the provider of services or supplier, and consistent with the 
        surety bond requirements under sections 1834(a)(16)(B) and 
        1861(o)(7)(C).''.
    (h) Suspension of Medicare and Medicaid Payments Pending 
Investigation of Credible Allegations of Fraud.--
            (1) Medicare.--Section 1862 of the Social Security Act (42 
        U.S.C. 1395y), as amended by subsection (g)(3), is amended by 
        adding at the end the following new subsection:
    ``(o) Suspension of Payments Pending Investigation of Credible 
Allegations of Fraud.--
            ``(1) In general.--The Secretary may suspend payments to a 
        provider of services or supplier under this title pending an 
        investigation of a credible allegation of fraud against the 
        provider of services or supplier, unless the Secretary 
        determines there is good cause not to suspend such payments.
            ``(2) Consultation.--The Secretary shall consult with the 
        Inspector General of the Department of Health and Human 
        Services in determining whether there is a credible allegation 
        of fraud against a provider of services or supplier.
            ``(3) Promulgation of regulations.--The Secretary shall 
        promulgate regulations to carry out this subsection and section 
        1903(i)(2)(C).''.
            (2) Medicaid.--Section 1903(i)(2) of such Act (42 U.S.C. 
        1396b(i)(2)) is amended--
                    (A) in subparagraph (A), by striking ``or'' at the 
                end; and
                    (B) by inserting after subparagraph (B), the 
                following:
                    ``(C) by any individual or entity to whom the State 
                has failed to suspend payments under the plan during 
                any period when there is pending an investigation of a 
                credible allegation of fraud against the individual or 
                entity, as determined by the State in accordance with 
                regulations promulgated by the Secretary for purposes 
                of section 1862(o) and this subparagraph, unless the 
                State determines in accordance with such regulations 
                there is good cause not to suspend such payments; or''.
    (i) Increased Funding to Fight Fraud and Abuse.--
            (1) In general.--Section 1817(k) of the Social Security Act 
        (42 U.S.C. 1395i(k)) is amended--
                    (A) by adding at the end the following new 
                paragraph:
            ``(7) Additional funding.--In addition to the funds 
        otherwise appropriated to the Account from the Trust Fund under 
        paragraphs (3) and (4) and for purposes described in paragraphs 
        (3)(C) and (4)(A), there are hereby appropriated an additional 
        $10,000,000 to such Account from such Trust Fund for each of 
        fiscal years 2011 through 2020. The funds appropriated under 
        this paragraph shall be allocated in the same proportion as the 
        total funding appropriated with respect to paragraphs (3)(A) 
        and (4)(A) was allocated with respect to fiscal year 2010, and 
        shall be available without further appropriation until 
        expended.''; and
                    (B) in paragraph (4)(A), by inserting ``until 
                expended'' after ``appropriation''.
            (2) Indexing of amounts appropriated.--
                    (A) Departments of health and human services and 
                justice.--Section 1817(k)(3)(A)(i) of the Social 
                Security Act (42 U.S.C. 1395i(k)(3)(A)(i)) is amended--
                            (i) in subclause (III), by inserting 
                        ``and'' at the end;
                            (ii) in subclause (IV)--
                                    (I) by striking ``for each of 
                                fiscal years 2007, 2008, 2009, and 
                                2010'' and inserting ``for each fiscal 
                                year after fiscal year 2006''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                            (iii) by striking subclause (V).
                    (B) Office of the inspector general of the 
                department of health and human services.--Section 
                1817(k)(3)(A)(ii) of such Act (42 U.S.C. 
                1395i(k)(3)(A)(ii)) is amended--
                            (i) in subclause (VIII), by inserting 
                        ``and'' at the end;
                            (ii) in subclause (IX)--
                                    (I) by striking ``for each of 
                                fiscal years 2008, 2009, and 2010'' and 
                                inserting ``for each fiscal year after 
                                fiscal year 2007''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                            (iii) by striking subclause (X).
                    (C) Federal bureau of investigation.--Section 
                1817(k)(3)(B) of the Social Security Act (42 U.S.C. 
                1395i(k)(3)(B)) is amended--
                            (i) in clause (vii), by inserting ``and'' 
                        at the end;
                            (ii) in clause (viii)--
                                    (I) by striking ``for each of 
                                fiscal years 2007, 2008, 2009, and 
                                2010'' and inserting ``for each fiscal 
                                year after fiscal year 2006''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                            (iii) by striking clause (ix).
                    (D) Medicare integrity program.--Section 
                1817(k)(4)(C) of the Social Security Act (42 U.S.C. 
                1395i(k)(4)(C)) is amended by adding at the end the 
                following new clause:
                            ``(ii) For each fiscal year after 2010, by 
                        the percentage increase in the consumer price 
                        index for all urban consumers (all items; 
                        United States city average) over the previous 
                        year.''.
    (j) Medicare Integrity Program and Medicaid Integrity Program.--
            (1) Medicare integrity program.--
                    (A) Requirement to provide performance 
                statistics.--Section 1893(c) of the Social Security Act 
                (42 U.S.C. 1395ddd(c)) is amended--
                            (i) in paragraph (3), by striking ``and'' 
                        at the end;
                            (ii) by redesignating paragraph (4) as 
                        paragraph (5); and
                            (iii) by inserting after paragraph (3) the 
                        following new paragraph:
            ``(4) the entity agrees to provide the Secretary and the 
        Inspector General of the Department of Health and Human 
        Services with such performance statistics (including the number 
        and amount of overpayments recovered, the number of fraud 
        referrals, and the return on investment of such activities by 
        the entity) as the Secretary or the Inspector General may 
        request; and''.
                    (B) Evaluations and annual report.--Section 1893 of 
                the Social Security Act (42 U.S.C. 1395ddd) is amended 
                by adding at the end the following new subsection:
    ``(i) Evaluations and Annual Report.--
            ``(1) Evaluations.--The Secretary shall conduct evaluations 
        of eligible entities which the Secretary contracts with under 
        the Program not less frequently than every 3 years.
            ``(2) Annual report.--Not later than 180 days after the end 
        of each fiscal year (beginning with fiscal year 2011), the 
        Secretary shall submit a report to Congress which identifies--
                    ``(A) the use of funds, including funds transferred 
                from the Federal Hospital Insurance Trust Fund under 
                section 1817 and the Federal Supplementary Insurance 
                Trust Fund under section 1841, to carry out this 
                section; and
                    ``(B) the effectiveness of the use of such 
                funds.''.
                    (C) Flexibility in pursuing fraud and abuse.--
                Section 1893(a) of the Social Security Act (42 U.S.C. 
                1395ddd(a)) is amended by inserting ``, or otherwise,'' 
                after ``entities''.
            (2) Medicaid integrity program.--
                    (A) Requirement to provide performance 
                statistics.--Section 1936(c)(2) of the Social Security 
                Act (42 U.S.C. 1396u-6(c)(2)) is amended--
                            (i) by redesignating subparagraph (D) as 
                        subparagraph (E); and
                            (ii) by inserting after subparagraph (C) 
                        the following new subparagraph:
                    ``(D) The entity agrees to provide the Secretary 
                and the Inspector General of the Department of Health 
                and Human Services with such performance statistics 
                (including the number and amount of overpayments 
                recovered, the number of fraud referrals, and the 
                return on investment of such activities by the entity) 
                as the Secretary or the Inspector General may 
                request.''.
                    (B) Evaluations and annual report.--Section 1936(e) 
                of the Social Security Act (42 U.S.C. 1396u-7(e)) is 
                amended--
                            (i) by redesignating paragraph (4) as 
                        paragraph (5); and
                            (ii) by inserting after paragraph (3) the 
                        following new paragraph:
            ``(4) Evaluations.--The Secretary shall conduct evaluations 
        of eligible entities which the Secretary contracts with under 
        the Program not less frequently than every 3 years.''.
    (k) Expanded Application of Hardship Waivers for Exclusions.--
Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
7(c)(3)(B)) is amended by striking ``individuals entitled to benefits 
under part A of title XVIII or enrolled under part B of such title, or 
both'' and inserting ``beneficiaries (as defined in section 
1128A(i)(5)) of that program''.

SEC. 5003. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY 
              AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER 
              DATA BANK.

    (a) Information Reported by Federal Agencies and Health Plans.--
Section 1128E of the Social Security Act (42 U.S.C. 1320a-7e) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) In General.--The Secretary shall maintain a national health 
care fraud and abuse data collection program under this section for the 
reporting of certain final adverse actions (not including settlements 
in which no findings of liability have been made) against health care 
providers, suppliers, or practitioners as required by subsection (b), 
with access as set forth in subsection (d), and shall furnish the 
information collected under this section to the National Practitioner 
Data Bank established pursuant to the Health Care Quality Improvement 
Act of 1986 (42 U.S.C. 11101 et seq.).'';
            (2) by striking subsection (d) and inserting the following:
    ``(d) Access to Reported Information.--
            ``(1) Availability.--The information collected under this 
        section shall be available from the National Practitioner Data 
        Bank to the agencies, authorities, and officials which are 
        provided under section 1921(b) information reported under 
        section 1921(a).
            ``(2) Fees for disclosure.--The Secretary may establish or 
        approve reasonable fees for the disclosure of information under 
        this section. The amount of such a fee may not exceed the costs 
        of processing the requests for disclosure and of providing such 
        information. Such fees shall be available to the Secretary to 
        cover such costs.'';
            (3) by striking subsection (f) and inserting the following:
    ``(f) Appropriate Coordination.--In implementing this section, the 
Secretary shall provide for the maximum appropriate coordination with 
part B of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 
11131 et seq.) and section 1921.''; and
            (4) in subsection (g)--
                    (A) in paragraph (1)(A)--
                            (i) in clause (iii)--
                                    (I) by striking ``or State'' each 
                                place it appears;
                                    (II) by redesignating subclauses 
                                (II) and (III) as subclauses (III) and 
                                (IV), respectively; and
                                    (III) by inserting after subclause 
                                (I) the following new subclause:
                                    ``(II) any dismissal or closure of 
                                the proceedings by reason of the 
                                provider, supplier, or practitioner 
                                surrendering their license or leaving 
                                the State or jurisdiction''; and
                            (ii) by striking clause (iv) and inserting 
                        the following:
                            ``(iv) Exclusion from participation in a 
                        Federal health care program (as defined in 
                        section 1128B(f)).'';
                    (B) in paragraph (3)--
                            (i) by striking subparagraphs (D) and (E); 
                        and
                            (ii) by redesignating subparagraph (F) as 
                        subparagraph (D); and
                    (C) in subparagraph (D) (as so redesignated), by 
                striking ``or State''.
    (b) Information Reported by State Law or Fraud Enforcement 
Agencies.--Section 1921 of the Social Security Act (42 U.S.C. 1396r-2) 
is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``system.--The State'' and 
                        all that follows through the semicolon and 
                        inserting system.--
                    ``(A) Licensing or certification actions.--The 
                State must have in effect a system of reporting the 
                following information with respect to formal 
                proceedings (as defined by the Secretary in 
                regulations) concluded against a health care 
                practitioner or entity by a State licensing or 
                certification agency:'';
                            (ii) by redesignating subparagraphs (A) 
                        through (D) as clauses (i) through (iv), 
                        respectively, and indenting appropriately;
                            (iii) in subparagraph (A)(iii) (as so 
                        redesignated)--
                                    (I) by striking ``the license of'' 
                                and inserting ``license or the right to 
                                apply for, or renew, a license by''; 
                                and
                                    (II) by inserting 
                                ``nonrenewability,'' after ``voluntary 
                                surrender,''; and
                            (iv) by adding at the end the following new 
                        subparagraph:
                    ``(B) Other final adverse actions.--The State must 
                have in effect a system of reporting information with 
                respect to any final adverse action (not including 
                settlements in which no findings of liability have been 
                made) taken against a health care provider, supplier, 
                or practitioner by a State law or fraud enforcement 
                agency.''; and
                    (B) in paragraph (2), by striking ``the authority 
                described in paragraph (1)'' and inserting ``a State 
                licensing or certification agency or State law or fraud 
                enforcement agency'';
            (2) in subsection (b)--
                    (A) by striking paragraph (2) and inserting the 
                following:
            ``(2) to State licensing or certification agencies and 
        Federal agencies responsible for the licensing and 
        certification of health care providers, suppliers, and licensed 
        health care practitioners;'';
                    (B) in each of paragraphs (4) and (6), by inserting 
                ``, but only with respect to information provided 
                pursuant to subsection (a)(1)(A)'' before the comma at 
                the end;
                    (C) by striking paragraph (5) and inserting the 
                following:
            ``(5) to State law or fraud enforcement agencies,'';
                    (D) by redesignating paragraphs (7) and (8) as 
                paragraphs (8) and (9), respectively; and
                    (E) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) to health plans (as defined in section 1128C(c));'';
            (3) by redesignating subsection (d) as subsection (h), and 
        by inserting after subsection (c) the following new 
        subsections:
    ``(d) Disclosure and Correction of Information.--
            ``(1) Disclosure.--With respect to information reported 
        pursuant to subsection (a)(1), the Secretary shall--
                    ``(A) provide for disclosure of the information, 
                upon request, to the health care practitioner who, or 
                the entity that, is the subject of the information 
                reported; and
                    ``(B) establish procedures for the case where the 
                health care practitioner or entity disputes the 
                accuracy of the information reported.
            ``(2) Corrections.--Each State licensing or certification 
        agency and State law or fraud enforcement agency shall report 
        corrections of information already reported about any formal 
        proceeding or final adverse action described in subsection (a), 
        in such form and manner as the Secretary prescribes by 
        regulation.
    ``(e) Fees for Disclosure.--The Secretary may establish or approve 
reasonable fees for the disclosure of information under this section. 
The amount of such a fee may not exceed the costs of processing the 
requests for disclosure and of providing such information. Such fees 
shall be available to the Secretary to cover such costs.
    ``(f) Protection From Liability for Reporting.--No person or 
entity, including any agency designated by the Secretary in subsection 
(b), shall be held liable in any civil action with respect to any 
reporting of information as required under this section, without 
knowledge of the falsity of the information contained in the report.
    ``(g) References.--For purposes of this section:
            ``(1) State licensing or certification agency.--The term 
        `State licensing or certification agency' includes any 
        authority of a State (or of a political subdivision thereof) 
        responsible for the licensing of health care practitioners (or 
        any peer review organization or private accreditation entity 
        reviewing the services provided by health care practitioners) 
        or entities.
            ``(2) State law or fraud enforcement agency.--The term 
        `State law or fraud enforcement agency' includes--
                    ``(A) a State law enforcement agency; and
                    ``(B) a State medicaid fraud control unit (as 
                defined in section 1903(q)).
            ``(3) Final adverse action.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `final adverse action' includes--
                            ``(i) civil judgments against a health care 
                        provider, supplier, or practitioner in State 
                        court related to the delivery of a health care 
                        item or service;
                            ``(ii) State criminal convictions related 
                        to the delivery of a health care item or 
                        service;
                            ``(iii) exclusion from participation in 
                        State health care programs (as defined in 
                        section 1128(h));
                            ``(iv) any licensing or certification 
                        action described in subsection (a)(1)(A) taken 
                        against a supplier by a State licensing or 
                        certification agency; and
                            ``(v) any other adjudicated actions or 
                        decisions that the Secretary shall establish by 
                        regulation.
                    ``(B) Exception.--Such term does not include any 
                action with respect to a malpractice claim.''; and
            (4) in subsection (h), as so redesignated, by striking 
        ``The Secretary'' and all that follows through the period at 
        the end and inserting ``In implementing this section, the 
        Secretary shall provide for the maximum appropriate 
        coordination with part B of the Health Care Quality Improvement 
        Act of 1986 (42 U.S.C. 11131 et seq.) and section 1128E.''.
    (c) Conforming Amendment.--Section 1128C(a)(1) of the Social 
Security Act (42 U.S.C. 1320a-7c(a)(1)) is amended--
            (1) in subparagraph (C), by adding ``and'' after the comma 
        at the end;
            (2) in subparagraph (D), by striking ``, and'' and 
        inserting a period; and
            (3) by striking subparagraph (E).
    (d) Transition Process; Effective Date.--
            (1) In general.--Effective on the date of enactment of this 
        Act, the Secretary of Health and Human Services (in this 
        section referred to as the ``Secretary'') shall implement a 
        transition process under which, by not later than the end of 
        the transition period described in paragraph (5), the Secretary 
        shall cease operating the Healthcare Integrity and Protection 
        Data Bank established under section 1128E of the Social 
        Security Act (as in effect before the effective date specified 
        in paragraph (6)) and shall transfer all data collected in the 
        Healthcare Integrity and Protection Data Bank to the National 
        Practitioner Data Bank established pursuant to the Health Care 
        Quality Improvement Act of 1986 (42 U.S.C. 11101 et seq.). 
        During such transition process, the Secretary shall have in 
        effect appropriate procedures to ensure that data collection 
        and access to the Healthcare Integrity and Protection Data Bank 
        and the National Practitioner Data Bank are not disrupted.
            (2) Regulations.--The Secretary shall promulgate 
        regulations to carry out the amendments made by subsections (a) 
        and (b).
            (3) Funding.--
                    (A) Availability of fees.--Fees collected pursuant 
                to section 1128E(d)(2) of the Social Security Act prior 
                to the effective date specified in paragraph (6) for 
                the disclosure of information in the Healthcare 
                Integrity and Protection Data Bank shall be available 
                to the Secretary, without fiscal year limitation, for 
                payment of costs related to the transition process 
                described in paragraph (1). Any such fees remaining 
                after the transition period is complete shall be 
                available to the Secretary, without fiscal year 
                limitation, for payment of the costs of operating the 
                National Practitioner Data Bank.
                    (B) Availability of additional funds.--In addition 
                to the fees described in subparagraph (A), any funds 
                available to the Secretary or to the Inspector General 
                of the Department of Health and Human Services for a 
                purpose related to combating health care fraud, waste, 
                or abuse shall be available to the extent necessary for 
                operating the Healthcare Integrity and Protection Data 
                Bank during the transition period, including systems 
                testing and other activities necessary to ensure that 
                information formerly reported to the Healthcare 
                Integrity and Protection Data Bank will be accessible 
                through the National Practitioner Data Bank after the 
                end of such transition period.
            (4) Special provision for access to the national 
        practitioner data bank by the department of veterans affairs.--
                    (A) In general.--Notwithstanding any other 
                provision of law, during the 1-year period that begins 
                on the effective date specified in paragraph (6), the 
                information described in subparagraph (B) shall be 
                available from the National Practitioner Data Bank to 
                the Secretary of Veterans Affairs without charge.
                    (B) Information described.--For purposes of 
                subparagraph (A), the information described in this 
                subparagraph is the information that would, but for the 
                amendments made by this section, have been available to 
                the Secretary of Veterans Affairs from the Healthcare 
                Integrity and Protection Data Bank.
            (5) Transition period defined.--For purposes of this 
        subsection, the term ``transition period'' means the period 
        that begins on the date of enactment of this Act and ends on 
        the later of--
                    (A) the date that is 1 year after such date of 
                enactment; or
                    (B) the effective date of the regulations 
                promulgated under paragraph (2).
            (6) Effective date.--The amendments made by subsections 
        (a), (b), and (c) shall take effect on the first day after the 
        final day of the transition period.

SEC. 5004. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO 
              NOT MORE THAN 12 MONTHS.

    (a) Reducing Maximum Period for Submission.--
            (1) Part a.--Section 1814(a) of the Social Security Act (42 
        U.S.C. 1395f(a)(1)) is amended--
                    (A) in paragraph (1), by striking ``period of 3 
                calendar years'' and all that follows through the 
                semicolon and inserting ``period ending 1 calendar year 
                after the date of service;''; and
                    (B) by adding at the end the following new 
                sentence: ``In applying paragraph (1), the Secretary 
                may specify exceptions to the 1 calendar year period 
                specified in such paragraph.''
            (2) Part b.--
                    (A) Section 1842(b)(3) of such Act (42 U.S.C. 
                1395u(b)(3)(B)) is amended--
                            (i) in subparagraph (B), in the flush 
                        language following clause (ii), by striking 
                        ``close of the calendar year following the year 
                        in which such service is furnished (deeming any 
                        service furnished in the last 3 months of any 
                        calendar year to have been furnished in the 
                        succeeding calendar year)'' and inserting 
                        ``period ending 1 calendar year after the date 
                        of service''; and
                            (ii) by adding at the end the following new 
                        sentence: ``In applying subparagraph (B), the 
                        Secretary may specify exceptions to the 1 
                        calendar year period specified in such 
                        subparagraph.''
                    (B) Section 1835(a) of such Act (42 U.S.C. 
                1395n(a)) is amended--
                            (i) in paragraph (1), by striking ``period 
                        of 3 calendar years'' and all that follows 
                        through the semicolon and inserting ``period 
                        ending 1 calendar year after the date of 
                        service;''; and
                            (ii) by adding at the end the following new 
                        sentence: ``In applying paragraph (1), the 
                        Secretary may specify exceptions to the 1 
                        calendar year period specified in such 
                        paragraph.''
    (b) Effective Date.--
            (1) In general.--The amendments made by subsection (a) 
        shall apply to services furnished on or after January 1, 2010.
            (2) Services furnished before 2010.--In the case of 
        services furnished before January 1, 2010, a bill or request 
        for payment under section 1814(a)(1), 1842(b)(3)(B), or 1835(a) 
        shall be filed not later that December 31, 2010.

SEC. 5005. PHYSICIANS WHO ORDER ITEMS OR SERVICES REQUIRED TO BE 
              MEDICARE ENROLLED PHYSICIANS OR ELIGIBLE PROFESSIONALS.

    (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42 
U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and 
inserting ``physician enrolled under section 1866(j) or an eligible 
professional under section 1848(k)(3)(B) that is enrolled under section 
1866(j)''.
    (b) Home Health Services.--
            (1) Part a.--Section 1814(a)(2) of such Act (42 U.S.C. 
        1395(a)(2)) is amended in the matter preceding subparagraph (A) 
        by inserting ``in the case of services described in 
        subparagraph (C), a physician enrolled under section 1866(j) or 
        an eligible professional under section 1848(k)(3)(B),'' before 
        ``or, in the case of services''.
            (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C. 
        1395n(a)(2)) is amended in the matter preceding subparagraph 
        (A) by inserting ``, or in the case of services described in 
        subparagraph (A), a physician enrolled under section 1866(j) or 
        an eligible professional under section 1848(k)(3)(B),'' after 
        ``a physician''.
    (c) Application to Other Items or Services.--The Secretary may 
extend the requirement applied by the amendments made by subsections 
(a) and (b) to durable medical equipment and home health services 
(relating to requiring certifications and written orders to be made by 
enrolled physicians and health professions) to all other categories of 
items or services under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.), including covered part D drugs as defined in 
section 1860D-2(e) of such Act (42 U.S.C. 1395w-102), that are ordered, 
prescribed, or referred by a physician enrolled under section 1866(j) 
of such Act (42 U.S.C. 1395cc(j)) or an eligible professional under 
section 1848(k)(3)(B) of such Act (42 U.S.C. 1395w-4(k)(3)(B)).
    (d) Effective Date.--The amendments made by this section shall 
apply to written orders and certifications made on or after July 1, 
2010.

SEC. 5006. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON 
              REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

    (a) Physicians and Other Suppliers.--Section 1842(h) of the Social 
Security Act (42 U.S.C. 1395u(h)) is amended by adding at the end the 
following new paragraph
    ``(9) The Secretary may revoke enrollment, for a period of not more 
than one year for each act, for a physician or supplier under section 
1866(j) if such physician or supplier fails to maintain and, upon 
request of the Secretary, provide access to documentation relating to 
written orders or requests for payment for durable medical equipment, 
certifications for home health services, or referrals for other items 
or services written or ordered by such physician or supplier under this 
title, as specified by the Secretary.''.
    (b) Providers of Services.--Section 1866(a)(1) of such Act (42 
U.S.C. 1395cc) is further amended--
            (1) in subparagraph (U), by striking at the end ``and'';
            (2) in subparagraph (V), by striking the period at the end 
        and adding ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(W) maintain and, upon request of the Secretary, 
                provide access to documentation relating to written 
                orders or requests for payment for durable medical 
                equipment, certifications for home health services, or 
                referrals for other items or services written or 
                ordered by the provider under this title, as specified 
                by the Secretary.''.
    (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting 
``, ordering, referring for furnishing, or certifying the need for'' 
after ``furnishing''.
    (d) Effective Date.--The amendments made by this section shall 
apply to orders, certifications, and referrals made on or after January 
1, 2010.

SEC. 5007. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE 
              PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH 
              SERVICES OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

    (a) Condition of Payment for Home Health Services.--
            (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
                    (A) by striking ``and such services'' and inserting 
                ``such services''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and, in the case of a certification made 
                by a physician after January 1, 2010, prior to making 
                such certification the physician must document that the 
                physician himself or herself has had a face-to-face 
                encounter (including through use of telehealth, subject 
                to the requirements in section 1834(m), and other than 
                with respect to encounters that are incident to 
                services involved) with the individual within a 
                reasonable timeframe as determined by the Secretary''.
            (2) Part b.--Section 1835(a)(2)(A) of the Social Security 
        Act is amended--
                    (A) by striking ``and'' before ``(iii)''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and (iv) in the case of a certification 
                after January 1, 2010, prior to making such 
                certification the physician must document that the 
                physician has had a face-to-face encounter (including 
                through use of telehealth and other than with respect 
                to encounters that are incident to services involved) 
                with the individual during the 6-month period preceding 
                such certification, or other reasonable timeframe as 
                determined by the Secretary''.
    (b) Condition of Payment for Durable Medical Equipment.--Section 
1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B)) 
is amended by adding at the end the following: ``and shall require that 
such an order be written pursuant to the physician documenting that the 
physician has had a face-to-face encounter (including through use of 
telehealth and other than with respect to encounters that are incident 
to services involved) with the individual involved during the 6-month 
period preceding such written order, or other reasonable timeframe as 
determined by the Secretary''.
    (c) Application to Other Areas Under Medicare.--The Secretary may 
apply the face-to-face encounter requirement described in the 
amendments made by subsections (a) and (b) to other items and services 
for which payment is provided under title XVIII of the Social Security 
Act based upon a finding that such an decision would reduce the risk of 
waste, fraud, or abuse.
    (d) Application to Medicaid.--The requirements pursuant to the 
amendments made by subsections (a) and (b) shall apply in the case of 
physicians making certifications for home health services under title 
XIX of the Social Security Act in the same manner and to the same 
extent as such requirements apply in the case of physicians making such 
certifications under title XVIII of such Act.

SEC. 5008. ENHANCED PENALTIES.

    (a) Civil Monetary Penalties for False Statements or Delaying 
Inspections.--Section 1128A(a) of the Social Security Act (42 U.S.C. 
1320a-7a(a)), as amended by section 5002(d)(2)(A), is amended--
            (1) by inserting after paragraph (10) the following new 
        paragraphs:
            ``(11) knowingly makes, uses, or causes to be made or used, 
        a false record or statement material to a false or fraudulent 
        claim for payment for items and services furnished under a 
        Federal health care program; or
            ``(12) fails to grant timely access, upon reasonable 
        request (as defined by the Secretary in regulations), to the 
        Inspector General of the Department of Health and Human 
        Services, for the purpose of audits, investigations, 
        evaluations, or other statutory functions of the Inspector 
        General of the Department of Health and Human Services;''; and
            (2) in the first sentence (as so amended)--
                    (A) by striking ``or in cases under paragraph (9)'' 
                and inserting ``in cases under paragraph (9)''; and
                    (B) by striking ``a material fact)'' and inserting 
                ``a material fact, in cases under paragraph (11), 
                $50,000 for each false record or statement, or in cases 
                under paragraph (12), $15,000 for each day of the 
                failure described in such paragraph)''.
    (b) Medicare Advantage and Part D Plans.--
            (1) Ensuring timely inspections relating to contracts with 
        ma organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 
        1395w-27(d)(2)) is amended--
                    (A) in subparagraph (A), by inserting ``timely'' 
                before ``inspect''; and
                    (B) in subparagraph (B), by inserting ``timely'' 
                before ``audit and inspect''.
            (2) Marketing violations.--Section 1857(g)(1) of the Social 
        Security Act (42 U.S.C. 1395w--27(g)(1)) is amended--
                    (A) in subparagraph (F), by striking ``or'' at the 
                end;
                    (B) by inserting after subparagraph (G) the 
                following new subparagraphs:
                    ``(H) except as provided under subparagraph (C) or 
                (D) of section 1860D-1(b)(1), enrolls an individual in 
                any plan under this part without the prior consent of 
                the individual or the designee of the individual;
                    ``(I) transfers an individual enrolled under this 
                part from one plan to another without the prior consent 
                of the individual or the designee of the individual or 
                solely for the purpose of earning a commission;
                    ``(J) fails to comply with marketing restrictions 
                described in subsections (h) and (j) of section 1851 or 
                applicable implementing regulations or guidance; or
                    ``(K) employs or contracts with any individual or 
                entity who engages in the conduct described in 
                subparagraphs (A) through (J) of this paragraph;''; and
                    (C) by adding at the end the following new 
                sentence: ``The Secretary may provide, in addition to 
                any other remedies authorized by law, for any of the 
                remedies described in paragraph (2), if the Secretary 
                determines that any employee or agent of such 
                organization, or any provider or supplier who contracts 
                with such organization, has engaged in any conduct 
                described in subparagraphs (A) through (K) of this 
                paragraph.''.
            (3) Provision of false information.--Section 1857(g)(2)(A) 
        of the Social Security Act (42 U.S.C. 1395w--27(g)(2)(A)) is 
        amended by inserting ``except with respect to a determination 
        under subparagraph (E), an assessment of not more than the 
        amount claimed by such plan or plan sponsor based upon the 
        misrepresentation or falsified information involved,'' after 
        ``for each such determination,''.
    (c) Obstruction of Program Audits.--Section 1128(b)(2) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(2)) is amended--
            (1) in the heading, by inserting ``or audit'' after 
        ``investigation''; and
            (2) by striking ``investigation into'' and all that follows 
        through the period and inserting ``investigation or audit 
        related to--''
                            ``(i) any offense described in paragraph 
                        (1) or in subsection (a); or
                            ``(ii) the use of funds received, directly 
                        or indirectly, from any Federal health care 
                        program (as defined in section 1128B(f)).''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to acts committed 
        on or after January 1, 2010.
            (2) Exception.--The amendments made by subsection (b)(1) 
        take effect on the date of enactment of this Act.

SEC. 5009. MEDICARE SELF-REFERRAL DISCLOSURE PROTOCOL.

    (a) Development of Self-Referral Disclosure Protocol.--
            (1) In general.--The Secretary of Health and Human 
        Services, in cooperation with the Inspector General of the 
        Department of Health and Human Services, shall establish, not 
        later than 6 months after the date of the enactment of this 
        Act, a protocol to enable health care providers of services and 
        suppliers to disclose an actual or potential violation of 
        section 1877 of the Social Security Act (42 U.S.C. 1395nn) 
        pursuant to a self-referral disclosure protocol (in this 
        section referred to as an ``SRDP''). The SRDP shall include 
        direction to health care providers of services and suppliers 
        on--
                    (A) a specific person, official, or office to whom 
                such disclosures shall be made; and
                    (B) instruction on the implication of the SRDP on 
                corporate integrity agreements and corporate compliance 
                agreements.
            (2) Publication on internet website of srdp information.--
        The Secretary of Health and Human Services shall post 
        information on the public Internet website of the Centers for 
        Medicare & Medicaid Services to inform relevant stakeholders of 
        how to disclose actual or potential violations pursuant to an 
        SRDP.
            (3) Relation to advisory opinions.--The SRDP shall be 
        separate from the advisory opinion process set forth in 
        regulations implementing section 1877(g) of the Social Security 
        Act.
    (b) Reduction in Amounts Owed.--The Secretary of Health and Human 
Services is authorized to reduce the amount due and owing for all 
violations under section 1877 of the Social Security Act to an amount 
less than that specified in subsection (g) of such section. In 
establishing such amount for a violation, the Secretary may consider 
the following factors:
            (1) The nature and extent of the improper or illegal 
        practice.
            (2) The timeliness of such self-disclosure.
            (3) The cooperation in providing additional information 
        related to the disclosure.
            (4) Such other factors as the Secretary considers 
        appropriate.
    (c) Report.--Not later than 18 months after the date on which the 
SRDP protocol is established under subsection (a)(1), the Secretary 
shall submit to Congress a report on the implementation of this 
section. Such report shall include--
            (1) the number of health care providers of services and 
        suppliers making disclosures pursuant to the SRDP;
            (2) the amounts collected pursuant to the SRDP;
            (3) the types of violations reported under the SRDP; and
            (4) such other information as may be necessary to evaluate 
        the impact of this section.

SEC. 5010. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL EQUIPMENT, 
              PROSTHETICS, ORTHOTICS, AND SUPPLIES COMPETITIVE 
              ACQUISITION PROGRAM.

    (a) Expansion of Round 2 of the DME Competitive Bidding Program.--
Section 1847(a)(1) of the Social Security Act (42 U.S.C. 1395w-3(a)(1)) 
is amended--
            (1) in subparagraph (B)(i)(II), by striking ``70'' and 
        inserting ``91''; and
            (2) in subparagraph (D)(ii)--
                    (A) in subclause (I), by striking ``and'' at the 
                end;
                    (B) by redesignating subclause (II) as subclause 
                (III); and
                    (C) by inserting after subclause (I) the following 
                new subclause:
                                    ``(II) the Secretary shall include 
                                the next 21 largest metropolitan 
                                statistical areas by total population 
                                (after those selected under subclause 
                                (I)) for such round; and''.
    (b) Requirement to Either Competitively Bid Areas or Use 
Competitive Bid Prices by 2016.--Section 1834(a)(1)(F) of the Social 
Security Act (42 U.S.C. 1395m(a)(1)(F)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by inserting ``(and, in the case of covered 
                items furnished on or after January 1, 2016, subject to 
                clause (iii), shall)'' after ``may''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(iii) in the case of covered items 
                        furnished on or after January 1, 2016, the 
                        Secretary may continue to make such adjustments 
                        described in clause (ii) as, under such 
                        competitive acquisition programs, additional 
                        covered items are phased in or information is 
                        updated as contracts under section 1847 are 
                        recompeted in accordance with section 
                        1847(b)(3)(B).''.

SEC. 5011. EXPANSION OF THE RECOVERY AUDIT CONTRACTOR (RAC) PROGRAM.

    (a) Expansion to Medicaid.--
            (1) State plan amendment.--Section 1902(a)(42) of the 
        Social Security Act (42 U.S.C. 1396a(a)(42)) is amended--
                    (A) by striking ``that the records'' and inserting 
                ``that--
                    ``(A) the records'';
                    (B) by inserting ``and'' after the semicolon; and
                    (C) by adding at the end the following:
                    ``(B) not later than December 31, 2010, the State 
                shall--
                            ``(i) establish a program under which the 
                        State contracts (consistent with State law and 
                        in the same manner as the Secretary enters into 
                        contracts with recovery audit contractors under 
                        section 1893(h), subject to such exceptions or 
                        requirements as the Secretary may require for 
                        purposes of this title or a particular State) 
                        with 1 or more recovery audit contractors for 
                        the purpose of identifying underpayments and 
                        overpayments and recouping overpayments under 
                        the State plan and under any waiver of the 
                        State plan with respect to all services for 
                        which payment is made to any entity under such 
                        plan or waiver; and
                            ``(ii) provide assurances satisfactory to 
                        the Secretary that--
                                    ``(I) under such contracts, payment 
                                shall be made to such a contractor only 
                                from amounts recovered;
                                    ``(II) from such amounts recovered, 
                                payment--
                                            ``(aa) shall be made on a 
                                        contingent basis for collecting 
                                        overpayments; and
                                            ``(bb) may be made in such 
                                        amounts as the State may 
                                        specify for identifying 
                                        underpayments;
                                    ``(III) the State has an adequate 
                                process for entities to appeal any 
                                adverse determination made by such 
                                contractors; and
                                    ``(IV) such program is carried out 
                                in accordance with such requirements as 
                                the Secretary shall specify, 
                                including--
                                            ``(aa) for purposes of 
                                        section 1903(a)(7), that 
                                        amounts expended by the State 
                                        to carry out the program shall 
                                        be considered amounts expended 
                                        as necessary for the proper and 
                                        efficient administration of the 
                                        State plan or a waiver of the 
                                        plan;
                                            ``(bb) that section 1903(d) 
                                        shall apply to amounts 
                                        recovered under the program; 
                                        and
                                            ``(cc) that the State and 
                                        any such contractors under 
                                        contract with the State shall 
                                        coordinate such recovery audit 
                                        efforts with other contractors 
                                        or entities performing audits 
                                        of entities receiving payments 
                                        under the State plan or waiver 
                                        in the State, including efforts 
                                        with Federal and State law 
                                        enforcement with respect to the 
                                        Department of Justice, 
                                        including the Federal Bureau of 
                                        Investigations, the Inspector 
                                        General of the Department of 
                                        Health and Human Services, and 
                                        the State medicaid fraud 
                                        control unit; and''.
            (2) Coordination; regulations.--
                    (A) In general.--The Secretary of Health and Human 
                Services, acting through the Administrator of the 
                Centers for Medicare & Medicaid Services, shall 
                coordinate the expansion of the Recovery Audit 
                Contractor program to Medicaid with States, 
                particularly with respect to each State that enters 
                into a contract with a recovery audit contractor for 
                purposes of the State's Medicaid program prior to 
                December 31, 2010.
                    (B) Regulations.--The Secretary of Health and Human 
                Services shall promulgate regulations to carry out this 
                subsection and the amendments made by this subsection, 
                including with respect to conditions of Federal 
                financial participation, as specified by the Secretary.
    (b) Expansion to Medicare Parts C and D.--Section 1893(h) of the 
Social Security Act (42 U.S.C. 1395ddd(h)) is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``part A or B'' and inserting ``this title'';
            (2) in paragraph (2), by striking ``parts A and B'' and 
        inserting ``this title'';
            (3) in paragraph (3), by inserting ``(not later than 
        December 31, 2010, in the case of contracts relating to 
        payments made under part C or D)'' after ``2010'';
            (4) in paragraph (4), in the matter preceding subparagraph 
        (A), by striking ``part A or B'' and inserting ``this title''; 
        and
            (5) by adding at the end the following:
            ``(9) Special rules relating to parts c and d.--The 
        Secretary shall enter into contracts under paragraph (1) to 
        require recovery audit contractors to--
                    ``(A) ensure that each MA plan under part C has an 
                anti- fraud plan in effect and to review the 
                effectiveness of each such anti-fraud plan;
                    ``(B) ensure that each prescription drug plan under 
                part D has an anti- fraud plan in effect and to review 
                the effectiveness of each such anti-fraud plan;
                    ``(C) examine claims for reinsurance payments under 
                section 1860D-15(b) to determine whether prescription 
                drug plans submitting such claims incurred costs in 
                excess of the allowable reinsurance costs permitted 
                under paragraph (2) of that section; and
                    ``(D) review estimates submitted by prescription 
                drug plans by private plans with respect to the 
                enrollment of high cost beneficiaries (as defined by 
                the Secretary) and to compare such estimates with the 
                numbers of such beneficiaries actually enrolled by such 
                plans.''.
    (c) Annual Report.--The Secretary of Health and Human Services, 
acting through the Administrator of the Centers for Medicare & Medicaid 
Services, shall submit an annual report to Congress concerning the 
effectiveness of the Recovery Audit Contractor program under Medicaid 
and Medicare and shall include such reports recommendations for 
expanding or improving the program.

               Subtitle B--Additional Medicaid Provisions

SEC. 5101. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID IF 
              TERMINATED UNDER MEDICARE OR OTHER STATE PLAN.

    Section 1902(a)(39) of the Social Security Act (42 U.S.C. 42 U.S.C. 
1396a(a)) is amended by inserting after ``1128A,'' the following: 
``terminate the participation of any individual or entity in such 
program if (subject to such exceptions as are permitted with respect to 
exclusion under sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation 
of such individual or entity is terminated under title XVIII or any 
other State plan under this title,''.

SEC. 5102. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN 
              OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as 
amended by section 5001(b), is amended by inserting after paragraph 
(75) the following:
            ``(76) provide that the State agency described in paragraph 
        (9) exclude, with respect to a period, any individual or entity 
        from participation in the program under the State plan if such 
        individual or entity owns, controls, or manages an entity that 
        (or if such entity is owned, controlled, or managed by an 
        individual or entity that)--
                    ``(A) has unpaid overpayments (as defined by the 
                Secretary) under this title during such period 
                determined by the Secretary or the State agency to be 
                delinquent;
                    ``(B) is suspended or excluded from participation 
                under or whose participation is terminated under this 
                title during such period; or
                    ``(C) is affiliated with an individual or entity 
                that has been suspended or excluded from participation 
                under this title or whose participation is terminated 
                under this title during such period;''.

SEC. 5103. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
              REQUIRED TO REGISTER UNDER MEDICAID.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)), as amended by section 5102(a), is amended 
by inserting after paragraph (76), the following:
            ``(77) provide that any agent, clearinghouse, or other 
        alternate payee (as defined by the Secretary) that submits 
        claims on behalf of a health care provider must register with 
        the State and the Secretary in a form and manner specified by 
        the Secretary; and''.

SEC. 5104. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER 
              MMIS TO DETECT FRAUD AND ABUSE.

    (a) In General.--Section 1903(r)(1)(F) of the Social Security Act 
(42 U.S.C. 1396b(r)(1)(F)) is amended by inserting after ``necessary'' 
the following: ``and including, for data submitted to the Secretary on 
or after January 1, 2010, data elements from the automated data system 
that the Secretary determines to be necessary for program integrity, 
program oversight, and administration, at such frequency as the 
Secretary shall determine''.
    (b) Managed Care Organizations.--
            (1) In general.--Section 1903(m)(2)(A)(xi) of the Social 
        Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by 
        inserting ``and for the provision of such data to the State at 
        a frequency and level of detail to be specified by the 
        Secretary'' after ``patients''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to contract years beginning on or 
        after January 1, 2010.

SEC. 5105. PROHIBITION ON PAYMENTS TO INSTITUTIONS OR ENTITIES LOCATED 
              OUTSIDE OF THE UNITED STATES.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396b(a)), as 
amended by section 5103, is amended by inserting after paragraph (77) 
the following new paragraph:
            ``(78) provide that the State shall not provide any 
        payments for items or services provided under the State plan or 
        under a waiver to any financial institution or entity located 
        outside of the United States.''.

SEC. 5106. OVERPAYMENTS.

    (a) Extension of Period for Collection of Overpayments Due to 
Fraud.--
            (1) In general.--Section 1903(d)(2) of the Social Security 
        Act (42 U.S.C. 1396b(d)(2)) is amended--
                    (A) in subparagraph (C)--
                            (i) in the first sentence, by striking ``60 
                        days'' and inserting ``1 year''; and
                            (ii) in the second sentence, by striking 
                        ``60 days'' and inserting ``1-year period''; 
                        and
                    (B) in subparagraph (D)--
                            (i) in inserting ``(i)'' after ``(D)''; and
                            (ii) by adding at the end the following:
    ``(ii) In any case where the State is unable to recover a debt 
which represents an overpayment (or any portion thereof) made to a 
person or other entity due to fraud within 1 year of discovery because 
there is not a final determination of the amount of the overpayment 
under an administrative or judicial process (as applicable), including 
as a result of a judgment being under appeal, no adjustment shall be 
made in the Federal payment to such State on account of such 
overpayment (or portion thereof) before the date that is 30 days after 
the date on which a final judgment (including, if applicable, a final 
determination on an appeal) is made.''.
            (2) Effective date.--The amendments made by this subsection 
        take effect on the date of enactment of this Act and apply to 
        overpayments discovered on or after that date.
    (b) Corrective Action.--The Secretary shall promulgate regulations 
that require States to correct Federally identified claims 
overpayments, of an ongoing or recurring nature, with new Medicaid 
Management Information System (MMIS) edits, audits, or other 
appropriate corrective action.

SEC. 5107. MANDATORY STATE USE OF NATIONAL CORRECT CODING INITIATIVE.

    Section 1903(r) of the Social Security Act (42 U.S.C. 1396b(r)) is 
amended--
            (1) in paragraph (1)(B)--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) in clause (iii), by adding ``and'' after the 
                semi-colon; and
                    (C) by adding at the end the following new clause:
                            ``(iv) effective for claims filed on or 
                        after October 1, 2010, incorporate compatible 
                        methodologies of the National Correct Coding 
                        Initiative administered by the Secretary (or 
                        any successor initiative to promote correct 
                        coding and to control improper coding leading 
                        to inappropriate payment) and such other 
                        methodologies of that Initiative (or such other 
                        national correct coding methodologies) as the 
                        Secretary identifies in accordance with 
                        paragraph (4);''; and
            (2) by adding at the end the following new paragraph:
    ``(4) For purposes of paragraph (1)(B)(iv), the Secretary shall do 
the following:
            ``(A) Not later than September 1, 2010:
                    ``(i) Identify those methodologies of the National 
                Correct Coding Initiative administered by the Secretary 
                (or any successor initiative to promote correct coding 
                and to control improper coding leading to inappropriate 
                payment) which are compatible to claims filed under 
                this title.
                    ``(ii) Identify those methodologies of such 
                Initiative (or such other national correct coding 
                methodologies) that should be incorporated into claims 
                filed under this title with respect to items or 
                services for which States provide medical assistance 
                under this title and no national correct coding 
                methodologies have been established under such 
                Initiative with respect to title XVIII.
                    ``(iii) Notify States of--
                            ``(I) the methodologies identified under 
                        subparagraphs (A) and (B) (and of any other 
                        national correct coding methodologies 
                        identified under subparagraph (B)); and
                            ``(II) how States are to incorporate such 
                        methodologies into claims filed under this 
                        title.
            ``(B) Not later than March 1, 2011, submit a report to 
        Congress that includes the notice to States under clause (iii) 
        of subparagraph (A) and an analysis supporting the 
        identification of the methodologies made under clauses (i) and 
        (ii) of subparagraph (A).''.

SEC. 5108. GENERAL EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this subtitle, 
this subtitle and the amendments made by this subtitle take effect on 
January 1, 2011, without regard to whether final regulations to carry 
out such amendments and subtitle have been promulgated by that date.
    (b) Delay if State Legislation Required.--In the case of a State 
plan for medical assistance under title XIX of the Social Security Act 
or a child health plan under title XXI of such Act which the Secretary 
of Health and Human Services determines requires State legislation 
(other than legislation appropriating funds) in order for the plan to 
meet the additional requirement imposed by the amendments made by this 
subtitle, the State plan or child health plan shall not be regarded as 
failing to comply with the requirements of such title solely on the 
basis of its failure to meet this additional requirement before the 
first day of the first calendar quarter beginning after the close of 
the first regular session of the State legislature that begins after 
the date of the enactment of this Act. For purposes of the previous 
sentence, in the case of a State that has a 2-year legislative session, 
each year of such session shall be deemed to be a separate regular 
session of the State legislature.

                      TITLE VI--REVENUE PROVISIONS

                 Subtitle A--Revenue Offset Provisions

SEC. 6001. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH COVERAGE.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986, 
as amended by section 1306, is amended by adding at the end the 
following:

``SEC. 4980I. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH 
              COVERAGE.

    ``(a) Imposition of Tax.--If--
            ``(1) an employee is covered under any applicable employer-
        sponsored coverage of an employer at any time during a taxable 
        period, and
            ``(2) there is any excess benefit with respect to the 
        coverage,
there is hereby imposed a tax equal to 40 percent of the excess 
benefit.
    ``(b) Excess Benefit.--For purposes of this section--
            ``(1) In general.--The term `excess benefit' means, with 
        respect to any applicable employer-sponsored coverage made 
        available by an employer to an employee during any taxable 
        period, the sum of the excess amounts determined under 
        paragraph (2) for months during the taxable period.
            ``(2) Monthly excess amount.--The excess amount determined 
        under this paragraph for any month is the excess (if any) of--
                    ``(A) the aggregate cost of the applicable 
                employer-sponsored coverage of the employee for the 
                month, over
                    ``(B) an amount equal to \1/12\ of the annual 
                limitation under paragraph (3) for the calendar year in 
                which the month occurs.
            ``(3) Annual limitation.--For purposes of this subsection--
                    ``(A) In general.--The annual limitation under this 
                paragraph for any calendar year is the dollar limit 
                determined under subparagraph (C) for the calendar 
                year.
                    ``(B) Applicable annual limitation.--The annual 
                limitation which applies for any month shall be 
                determined on the basis of the type of coverage (as 
                determined under subsection (f)(1)) provided to the 
                employee by the employer as of the beginning of the 
                month.
                    ``(C) Applicable dollar limit.--Except as provided 
                in subparagraph (D)--
                            ``(i) 2013.--In the case of 2013, the 
                        dollar limit under this subparagraph is--
                                    ``(I) in the case of an employee 
                                with self-only coverage, $8,000, and
                                    ``(II) in the case of an employee 
                                with coverage other than self-only 
                                coverage, $21,000.
                            ``(ii) Exception for certain retired 
                        employees and employees engaged in high-risk 
                        professions.--In the case of an individual 
                        receiving retiree coverage who has attained age 
                        55, and an employee (other than such an 
                        individual) who participates in a plan which 
                        covers employees engaged in a high-risk 
                        profession--
                                    ``(I) the dollar amount in clause 
                                (i)(I) (determined after the 
                                application of subparagraph (D)) shall 
                                be increased by $1,850, and
                                    ``(II) the dollar amount in clause 
                                (i)(II) (determined after the 
                                application of such subparagraph) shall 
                                be increased by $5,000.
                            ``(iii) Subsequent years.--In the case of 
                        any calendar year after 2013, the dollar limit 
                        under this subparagraph is an amount equal to 
                        the sum of the applicable dollar amount in 
                        effect for the calendar year preceding such 
                        year under clause (i) and the dollar amount of 
                        any increase under clause (ii) as in effect for 
                        the calendar year preceding such year, except 
                        that each such amount shall be increased by an 
                        amount equal to the product of--
                                    ``(I) such amount, multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such year (determined by 
                                substitituting the calendar year that 
                                is 2 years before such year for `1992' 
                                in subparagraph (B) thereof), increased 
                                by 1 percentage point.
                        If the amount determined under this clause is 
                        not a multiple of $50, such amount shall be 
                        rounded to the nearest multiple of $50.
                    ``(D) Transition rule for states with highest 
                coverage costs.--
                            ``(i) In general.--If an employee is a 
                        resident of a high cost State on the first day 
                        of any month beginning in 2013, 2014, or 2015, 
                        the annual limitation under this paragraph for 
                        such month with respect to such employee shall 
                        be an amount equal to the applicable percentage 
                        of the annual limitation (determined without 
                        regard to this subparagraph or subparagraph 
                        (C)(ii)).
                            ``(ii) Applicable percentage.--The 
                        applicable percentage is 120 percent for 2013, 
                        110 percent for 2014, and 105 percent for 2015.
                            ``(iii) High cost state.--The term `high 
                        cost State' means each of the 17 States which 
                        the Secretary of Health and Human Services, in 
                        consultation with the Secretary, estimates had 
                        the highest average cost during 2012 for 
                        employer-sponsored coverage under health plans. 
                        The Secretary's estimate shall be made on the 
                        basis of aggregate premiums paid in the State 
                        for such health plans, determined using the 
                        most recent data available as of August 31, 
                        2012.
    ``(c) Liability to Pay Tax.--
            ``(1) In general.--Each coverage provider shall pay the tax 
        imposed by subsection (a) on its applicable share of the excess 
        benefit with respect to an employee for any taxable period.
            ``(2) Coverage provider.--For purposes of this subsection, 
        the term `coverage provider' means each of the following:
                    ``(A) Health insurance coverage.--If the applicable 
                employer-sponsored coverage consists of coverage under 
                a group health plan which provides health insurance 
                coverage, the health insurance issuer.
                    ``(B) HSA contributions.--If the applicable 
                employer-sponsored coverage consists of coverage under 
                an arrangement under which the employer makes 
                contributions described in subsection (b) or (d) of 
                section 106, the employer.
                    ``(C) Other coverage.--In the case of any other 
                applicable employer-sponsored coverage, the person that 
                administers the plan benefits.
            ``(3) Applicable share.--For purposes of this subsection, a 
        coverage provider's applicable share of an excess benefit for 
        any taxable period is the amount which bears the same ratio to 
        the amount of such excess benefit as--
                    ``(A) the cost of the applicable employer-sponsored 
                coverage provided by the provider to the employee 
                during such period, bears to
                    ``(B) the aggregate cost of all applicable 
                employer-sponsored coverage provided to the employee by 
                all coverage providers during such period.
            ``(4) Responsibility to calculate tax and applicable 
        shares.--
                    ``(A) In general.--Each employer shall--
                            ``(i) calculate for each taxable period the 
                        amount of the excess benefit subject to the tax 
                        imposed by subsection (a) and the applicable 
                        share of such excess benefit for each coverage 
                        provider, and
                            ``(ii) notify, at such time and in such 
                        manner as the Secretary may prescribe, the 
                        Secretary and each coverage provider of the 
                        amount so determined for the provider.
                    ``(B) Special rule for multiemployer plans.--In the 
                case of applicable employer-sponsored coverage made 
                available to employees through a multiemployer plan (as 
                defined in section 414(f)), the plan sponsor shall make 
                the calculations, and provide the notice, required 
                under subparagraph (A).
    ``(d) Applicable Employer-Sponsored Coverage; Cost.--For purposes 
of this section--
            ``(1) Applicable employer-sponsored coverage.--
                    ``(A) In general.--The term `applicable employer-
                sponsored coverage' means, with respect to any 
                employee, coverage under any group health plan made 
                available to the employee by an employer which is 
                excludable from the employee's gross income under 
                section 106, or would be so excludable if it were 
                employer-provided coverage (within the meaning of such 
                section 106).
                    ``(B) Exceptions.--The term `applicable employer-
                sponsored coverage' shall not include--
                            ``(i) any coverage (whether through 
                        insurance or otherwise) for disability or long-
                        term care, or
                            ``(ii) any coverage described in section 
                        9832(c)(3) the payment for which is not 
                        excludable from gross income and for which a 
                        deduction under section 162(l) is not 
                        allowable.
                    ``(C) Coverage includes employee paid portion.--
                Coverage shall be treated as applicable employer-
                sponsored coverage without regard to whether the 
                employer or employee pays for the coverage.
                    ``(D) Self-employed individual.--In the case of an 
                individual who is an employee within the meaning of 
                section 401(c)(1), coverage under any group health plan 
                providing health insurance coverage shall be treated as 
                applicable employer-sponsored coverage if a deduction 
                is allowable under section 162(l) with respect to all 
                or any portion the cost of the coverage.
                    ``(E) Governmental plans included.--Applicable 
                employer-sponsored coverage shall include coverage 
                under any group health plan established and maintained 
                for its civilian employees by the Government of the 
                United States, by the government of any State or 
                political subdivision thereof, or by any agency or 
                instrumentality of any such government.
            ``(2) Determination of cost.--
                    ``(A) In general.--The cost of applicable employer-
                sponsored coverage shall be determined under rules 
                similar to the rules of section 4980B(f)(4), except 
                that in determining such cost, any portion of the cost 
                of such coverage which is attributable to the tax 
                imposed under this section shall not be taken into 
                account. In the case of such coverage which provides 
                coverage to retired employees, the employer may elect 
                to treat a retired employee who has not attained the 
                age of 65 and a retired employee who has attained the 
                age of 65 as similarly situated beneficiaries.
                    ``(B) Health fsas.--In the case of applicable 
                employer-sponsored coverage consisting of coverage 
                under a flexible spending arrangement (as defined in 
                section 106(c)(2)), the cost of the coverage shall be 
                equal to the sum of--
                            ``(i) the amount of employer contributions 
                        under any salary reduction election under the 
                        arrangement, plus
                            ``(ii) the amount determined under 
                        subparagraph (A) with respect to any 
                        reimbursement under the arrangement in excess 
                        of the contributions described in clause (i).
                    ``(C) Hsas.--In the case of applicable employer-
                sponsored coverage consisting of coverage under an 
                arrangement under which the employer makes 
                contributions described in subsection (b) or (d) of 
                section 106, the cost of the coverage shall be equal to 
                the amount of employer contributions under the 
                arrangement.
                    ``(D) Allocation on a monthly basis.--If cost is 
                determined on other than a monthly basis, the cost 
                shall be allocated to months in a taxable period on 
                such basis as the Secretary may prescribe.
    ``(e) Penalty for Failure to Properly Calculate Excess Benefit.--
            ``(1) In general.--If, for any taxable period, the tax 
        imposed by subsection (a) exceeds the tax determined under such 
        subsection with respect to the total excess benefit calculated 
        by the employer or plan sponsor under subsection (c)(4)--
                    ``(A) each coverage provider shall pay the tax on 
                its applicable share (determined in the same manner as 
                under subsection (c)(4)) of the excess, but no penalty 
                shall be imposed on the provider with respect to such 
                amount, and
                    ``(B) the employer or plan sponsor shall, in 
                addition to any tax imposed by subsection (a), pay a 
                penalty in an amount equal to such excess, plus 
                interest at the underpayment rate determined under 
                section 6621 for the period beginning on the due date 
                for the payment of tax imposed by subsection (a) to 
                which the excess relates and ending on the date of 
                payment of the penalty.
            ``(2) Limitations on penalty.--
                    ``(A) Penalty not to apply where failure not 
                discovered exercising reasonable diligence.--No penalty 
                shall be imposed by paragraph (1)(B) on any failure to 
                properly calculate the excess benefit during any period 
                for which it is established to the satisfaction of the 
                Secretary that the employer or plan sponsor neither 
                knew, nor exercising reasonable diligence would have 
                known, that such failure existed.
                    ``(B) Penalty not to apply to failures corrected 
                within 30 days.--No penalty shall be imposed by 
                paragraph (1)(B) on any such failure if--
                            ``(i) such failure was due to reasonable 
                        cause and not to willful neglect, and
                            ``(ii) such failure is corrected during the 
                        30-day period beginning on the 1st date that 
                        the employer knew, or exercising reasonable 
                        diligence would have known, that such failure 
                        existed.
                    ``(C) Waiver by secretary.--In the case of any such 
                failure which is due to reasonable cause and not to 
                willful neglect, the Secretary may waive part or all of 
                the penalty imposed by paragraph (1), to the extent 
                that the payment of such penalty would be excessive or 
                otherwise inequitable relative to the failure involved.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Coverage determinations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an employee shall be treated as 
                having self-only coverage with respect any applicable 
                employer-sponsored coverage of an employer.
                    ``(B) Coverage under essential benefits package.--
                An employee shall be treated as having coverage other 
                than self-only coverage only if the employee is 
                enrolled in coverage other than self-only coverage in a 
                group health plan which provides at least an essential 
                benefits package (as defined in section 2242 of the 
                Social Security Act).
            ``(2) Employees engaged in high-risk profession.--The term 
        `employees engaged in a high-risk profession' means law 
        enforcement officers, firefighters, members of a rescue squad 
        or ambulance crew, and individuals engaged in the construction, 
        mining, agriculture (not including food processing), forestry, 
        and fishing industries.
            ``(3) Group health plan.--The term `group health plan' has 
        the meaning given such term by section 5000(b)(1).
            ``(4) Health insurance coverage; health insurance issuer.--
                    ``(A) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning given such term by 
                section 9832(b)(1) (applied without regard to 
                subparagraph (B) thereof, except as provided by the 
                Secretary in regulations).
                    ``(B) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning given such term by 
                section 9832(b)(2).
            ``(5) Person that administers the plan benefits.--The term 
        `person that administers the plan benefits' shall include the 
        plan sponsor if the plan sponsor administers benefits under the 
        plan.
            ``(6) Plan sponsor.--The term `plan sponsor' has the 
        meaning given such term in section 3(16)(B) of the Employee 
        Retirement Income Security Act of 1974.
            ``(7) Taxable period.--The term `taxable period' means the 
        calendar year or such shorter period as the Secretary may 
        prescribe. The Secretary may have different taxable periods for 
        employers of varying sizes.
            ``(8) Aggregation rules.--All employers treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        shall be treated as a single employer.
            ``(9) Denial of deduction.--For denial of deduction for the 
        tax imposed by this section, see section 275(a)(6).
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code, as amended by section 1306, is amended by adding at the end 
the following new item:

``Sec. 4980I. Excise tax on high cost employer-sponsored health 
                            coverage.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 6002. INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH COVERAGE ON 
              W-2.

    (a) In General.--Section 6051(a) of the Internal Revenue Code of 
1986 (relating to receipts for employees) is amended by striking 
``and'' at the end of paragraph (12), by striking the period at the end 
of paragraph (13) and inserting ``, and'', and by adding after 
paragraph (13) the following new paragraph:
            ``(14) the aggregate cost (determined under rules similar 
        to the rules of section 4980B(f)(4)) of applicable employer-
        sponsored coverage (as defined in section 4980I(d)(1)), except 
        that this paragraph shall not apply to--
                    ``(A) coverage to which paragraphs (11) and (12) 
                apply, or
                    ``(B) the amount of any salary reduction 
                contributions to a flexible spending arrangement 
                (within the meaning of section 125).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

SEC. 6003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED 
              DRUG OR INSULIN.

    (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: 
``Such term shall include an amount paid for medicine or a drug only if 
such medicine or drug is a prescribed drug (determined without regard 
to whether such drug is available without a prescription) or is 
insulin.''.
    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following: ``Such term shall include an amount paid for medicine or a 
drug only if such medicine or drug is a prescribed drug (determined 
without regard to whether such drug is available without a 
prescription) or is insulin.''.
    (c) Health Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(f) Reimbursements for Medicine Restricted to Prescribed Drugs 
and Insulin.--For purposes of this section and section 105, 
reimbursement for expenses incurred for a medicine or a drug shall be 
treated as a reimbursement for medical expenses only if such medicine 
or drug is a prescribed drug (determined without regard to whether such 
drug is available without a prescription) or is insulin.''.
    (d) Effective Dates.--
            (1) Distributions from savings accounts.--The amendments 
        made by subsections (a) and (b) shall apply to amounts paid 
        with respect to taxable years beginning after December 31, 
        2009.
            (2) Reimbursements.--The amendment made by subsection (c) 
        shall apply to expenses incurred with respect to taxable years 
        beginning after December 31, 2009.

SEC. 6004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM HSAS NOT 
              USED FOR QUALIFIED MEDICAL EXPENSES.

    (a) In General.--Section 223(f)(4)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``10 percent'' and inserting ``20 
percent''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions made after December 31, 2010.

SEC. 6005. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER 
              CAFETERIA PLANS.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
is amended--
            (1) by redesignating subsections (i) and (j) as subsections 
        (j) and (k), respectively, and
            (2) by inserting after subsection (h) the following new 
        subsection:
    ``(i) Limitation on Health Flexible Spending Arrangements.--For 
purposes of this section, if a benefit is provided under a cafeteria 
plan through employer contributions to a health flexible spending 
arrangement, such benefit shall not be treated as a qualified benefit 
unless the cafeteria plan provides that an employee may not elect for 
any taxable year to have salary reduction contributions in excess of 
$2,500 made to such arrangement.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 6006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

    (a) In General.--Section 6041 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsections:
    ``(h) Application to Corporations.--Notwithstanding any regulation 
prescribed by the Secretary before the date of the enactment of this 
subsection, for purposes of this section the term `person' includes any 
corporation that is not an organization exempt from tax under section 
501(a).
    ``(i) Regulations.--The Secretary may prescribe such regulations 
and other guidance as may be appropriate or necessary to carry out the 
purposes of this section, including rules to prevent duplicative 
reporting of transactions.''.
    (b) Payments for Property and Other Gross Proceeds.--Subsection (a) 
of section 6041 of the Internal Revenue Code of 1986 is amended--
            (1) by inserting ``amounts in consideration for property,'' 
        after ``wages,'',
            (2) by inserting ``gross proceeds,'' after ``emoluments, or 
        other'', and
            (3) by inserting ``gross proceeds,'' after ``setting forth 
        the amount of such''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made after December 31, 2011.

SEC. 6007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS.

    (a) Requirements to Qualify as Section 501(c)(3) Charitable 
Hospital Organization.--Section 501 of the Internal Revenue Code of 
1986 (relating to exemption from tax on corporations, certain trusts, 
etc.) is amended by redesignating subsection (r) as subsection (s) and 
by inserting after subsection (q) the following new subsection:
    ``(r) Additional Requirements for Certain Hospitals.--
            ``(1) In general.--A hospital organization to which this 
        subsection applies shall not be treated as described in 
        subsection (c)(3) unless the organization--
                    ``(A) meets the community health needs assessment 
                requirements described in paragraph (3),
                    ``(B) meets the financial assistance policy 
                requirements described in paragraph (4),
                    ``(C) meets the requirements on charges described 
                in paragraph (5), and
                    ``(D) meets the billing and collection requirement 
                described in paragraph (6).
            ``(2) Hospital organizations to which subsection applies.--
                    ``(A) In general.--This subsection shall apply to--
                            ``(i) an organization which operates a 
                        facility which is required by a State to be 
                        licensed, registered, or similarly recognized 
                        as a hospital, and
                            ``(ii) any other organization which the 
                        Secretary determines has the provision of 
                        hospital care as its principal function or 
                        purpose constituting the basis for its 
                        exemption under subsection (c)(3) (determined 
                        without regard to this subsection).
                    ``(B) Organizations with more than 1 hospital 
                facility.--If a hospital organization operates more 
                than 1 hospital facility--
                            ``(i) the organization shall meet the 
                        requirements of this subsection separately with 
                        respect to each such facility, and
                            ``(ii) shall not be treated as described in 
                        subsection (c)(3) with respect to any such 
                        facility for which such requirements are not 
                        separately met.
            ``(3) Community health needs assessments.--
                    ``(A) In general.--An organization meets the 
                requirements of this paragraph with respect to any 
                taxable year only if the organization--
                            ``(i) has conducted a community health 
                        needs assessment which meets the requirements 
                        of subparagraph (B) in such taxable year or in 
                        either of the 2 taxable years immediately 
                        preceding such taxable year,
                            ``(ii) has adopted an implementation 
                        strategy to meet the community health needs 
                        identified through such assessment.
                    ``(B) Community health needs assessment.--A 
                community health needs assessment meets the 
                requirements of this paragraph if such community health 
                needs assessment--
                            ``(i) takes into account input from persons 
                        who represent the broad interests of the 
                        community served by the hospital facility, 
                        including those with special knowledge of or 
                        expertise in public health, and
                            ``(ii) is made widely available to the 
                        public.
            ``(4) Financial assistance policy.--An organization meets 
        the requirements of this paragraph if the organization 
        establishes the following policies:
                    ``(A) Financial assistance policy.--A written 
                financial assistance policy which includes--
                            ``(i) eligibility criteria for financial 
                        assistance, and whether such assistance 
                        includes free or discounted care,
                            ``(ii) the basis for calculating amounts 
                        charged to patients,
                            ``(iii) the method for applying for 
                        financial assistance,
                            ``(iv) in the case of an organization which 
                        does not have a separate billing and 
                        collections policy, the actions the 
                        organization may take in the event of non-
                        payment, including collections action and 
                        reporting to credit agencies, and
                            ``(v) measures to widely publicize the 
                        policy within the community to be served by the 
                        organization.
                    ``(B) Policy relating to emergency medical care.--A 
                written policy requiring the organization to provide, 
                without discrimination, care for emergency medical 
                conditions (within the meaning of section 1867 of the 
                Social Security Act (42 U.S.C. 1395dd)), or other 
                medically necessary care, to individuals regardless of 
                their eligibility under the financial assistance policy 
                described in subparagraph (A).
            ``(5) Limitation on charges.--An organization meets the 
        requirements of this paragraph if the organization--
                    ``(A) limits amounts charged for emergency or other 
                medically necessary care provided to individuals 
                eligible for assistance under the financial assistance 
                policy described in paragraph (4)(A) to not more than 
                the lowest amounts charged to individuals who have 
                insurance covering such care, and
                    ``(B) prohibits the use of gross charges.
            ``(6) Billing and collection requirements.--An organization 
        meets the requirement of this paragraph only if the 
        organization does not engage in extraordinary collection 
        actions before the organization has made reasonable efforts to 
        determine whether the individual is eligible for assistance 
        under the financial assistance policy described in paragraph 
        (4)(A).
            ``(7) Regulatory authority.--The Secretary shall issue such 
        regulations and guidance as may be necessary to carry out the 
        provisions of this subsection, including guidance relating to 
        what constitutes reasonable efforts to determine the 
        eligibility of a patient under a financial assistance policy 
        for purposes of paragraph (6).''.
    (b) Excise Tax for Failures to Meet Hospital Exemption 
Requirements.--
            (1) In general.--Subchapter D of chapter 42 of the Internal 
        Revenue Code of 1986 (relating to failure by certain charitable 
        organizations to meet certain qualification requirements) is 
        amended by adding at the end the following new section:

``SEC. 4959. TAXES ON FAILURES BY HOSPITAL ORGANIZATIONS.

    ``If a hospital organization to which section 501(r) applies fails 
to meet the requirement of section 501(r)(3) for any taxable year, 
there is imposed on the organization a tax equal to $50,000.''.
            (2) Conforming amendment.--The table of sections for 
        subchapter D of chapter 42 of such Code is amended by adding at 
        the end the following new item:

``Sec. 4959. Taxes on failures by hospital organizations.''.
    (c) Mandatory Review of Tax Exemption for Hospitals.--The Secretary 
of the Treasury or the Secretary's delegate shall review at least once 
every 3 years the community benefit activities of each hospital 
organization to which section 501(r) of the Internal Revenue Code of 
1986 (as added by this section) applies.
    (d) Additional Reporting Requirements.--
            (1) Community health needs assessments and audited 
        financial statements.--Section 6033(b) of the Internal Revenue 
        Code of 1986 (relating to certain organizations described in 
        section 501(c)(3)) is amended by striking ``and'' at the end of 
        paragraph (14), by redesignating paragraph (15) as paragraph 
        (16), and by inserting after paragraph (14) the following new 
        paragraph:
            ``(15) in the case of an organization to which the 
        requirements of section 501(r) apply for the taxable year--
                    ``(A) a description of how the organization is 
                addressing the needs identified in each community 
                health needs assessment conducted under section 
                501(r)(3) and a description of any such needs that are 
                not being addressed together with the reasons why such 
                needs are not being addressed, and
                    ``(B) the audited financial statements of such 
                organization (or, in the case of an organization the 
                financial statements of which are included in a 
                consolidated financial statement with other 
                organizations, such consolidated financial 
                statement).''.
            (2) Taxes.--Section 6033(b)(10) of such Code is amended by 
        striking ``and'' at the end of subparagraph (B), by inserting 
        ``and'' at the end of subparagraph (C), and by adding at the 
        end the following new subparagraph:
                    ``(D) section 4959 (relating to taxes on failures 
                by hospital organizations),''.
    (e) Reports.--
            (1) Report on levels of charity care.--The Secretary of the 
        Treasury, in consultation with the Secretary of Health and 
        Human Services, shall submit to the Committees on Ways and 
        Means, Education and Labor, and Energy and Commerce of the 
        House of Representatives and to the Committees on Finance and 
        Health, Education, Labor, and Pensions of the Senate an annual 
        report on the following:
                    (A) Information with respect to private tax-exempt, 
                taxable, and government-owned hospitals regarding--
                            (i) levels of charity care provided,
                            (ii) bad debt expenses,
                            (iii) unreimbursed costs for services 
                        provided with respect to means-tested 
                        government programs, and
                            (iv) unreimbursed costs for services 
                        provided with respect to non-means tested 
                        government programs.
                    (B) Information with respect to private tax-exempt 
                hospitals regarding costs incurred for community 
                benefit activities.
            (2) Report on trends.--
                    (A) Study.--The Secretary of the Treasury, in 
                consultation with the Secretary of Health and Human 
                Services, shall conduct a study on trends in the 
                information required to be reported under paragraph 
                (1).
                    (B) Report.--Not later than 5 years after the date 
                of the enactment of this Act, the Secretary of the 
                Treasury, in consultation with the Secretary of Health 
                and Human Services, shall submit a report on the study 
                conducted under subparagraph (A) to the Committees on 
                Ways and Means, Education and Labor, and Energy and 
                Commerce of the House of Representatives and to the 
                Committees on Finance and Health, Education, Labor, and 
                Pensions of the Senate.
    (f) Effective Dates.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall apply to taxable 
        years beginning after the date of the enactment of this Act.
            (2) Community health needs assessment.--The requirements of 
        section 501(r)(3) of the Internal Revenue Code of 1986, as 
        added by subsection (a), shall apply to taxable years beginning 
        after the date which is 2 years after the date of the enactment 
        of this Act.
            (3) Excise tax.--The amendments made by subsection (b) 
        shall apply to failures occurring after the date of the 
        enactment of this Act.

SEC. 6008. IMPOSITION OF ANNUAL FEE ON BRANDED PRESCRIPTION 
              PHARMACEUTICAL MANUFACTURERS AND IMPORTERS.

    (a) Imposition of Fee.--
            (1) In general.--Each covered entity engaged in the 
        business of manufacturing or importing branded prescription 
        drugs shall pay to the Secretary of the Treasury not later than 
        the annual payment date of each calendar year beginning after 
        2009 a fee in an amount determined under subsection (b).
            (2) Annual payment date.--For purposes of this section, the 
        term ``annual payment date'' means with respect to any calendar 
        year the date determined by the Secretary, but in no event 
        later than September 30 of such calendar year.
    (b) Determination of Fee Amount.--
            (1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to $2,300,000,000 as--
                    (A) the covered entity's branded prescription drug 
                sales taken into account during the preceding calendar 
                year, bear to
                    (B) the aggregate branded prescription drug sales 
                of all covered entities taken into account during such 
                preceding calendar year.
            (2) Sales taken into account.--For purposes of paragraph 
        (1), the branded prescription drug sales taken into account 
        during any calendar year with respect to any covered entity 
        shall be determined in accordance with the following table:

 
   With respect to a covered entity's
  aggregate branded prescription drug      The percentage of such sales
  sales during the calendar year that         taken into account is:
                  are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      10 percent
   than $125,000,000.
  More than $125,000,000 but not more    40 percent
   than $225,000,000.
  More than $225,000,000 but not more    75 percent
   than $400,000,000.
  More than $400,000,000...............  100 percent.
 

            (3) Secretarial determination.--The Secretary of the 
        Treasury shall calculate the amount of each covered entity's 
        fee for any calendar year under paragraph (1). In calculating 
        such amount, the Secretary of the Treasury shall determine such 
        covered entity's branded prescription drug sales on the basis 
        of reports submitted under subsection (g) and through the use 
        of any other source of information available to the Secretary 
        of the Treasury.
    (c) Transfer of Fees to Medicare Part B Trust Fund.--There is 
hereby appropriated to the Federal Supplementary Medical Insurance 
Trust Fund established under section 1841 of the Social Security Act an 
amount equal to the fees received by the Secretary of the Treasury 
under subsection (a).
    (d) Covered Entity.--
            (1) In general.--For purposes of this section, the term 
        ``covered entity'' means any manufacturer or importer with 
        gross receipts from branded prescription drug sales.
            (2) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of 
                section 414 of such Code shall be treated as a single 
                covered entity.
                    (B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 of such Code to this section, 
                section 1563 of such Code shall be applied without 
                regard to subsection (b)(2)(C) thereof.
    (e) Branded Prescription Drug Sales.--For purposes of this 
section--
            (1) In general.--The term ``branded prescription drug 
        sales'' means sales of branded prescription drugs to any 
        specified government program or pursuant to coverage under any 
        such program.
            (2) Branded prescription drugs.--
                    (A) In general.--The term ``branded prescription 
                drug'' means--
                            (i) any prescription drug the application 
                        for which was submitted under section 505(b) of 
                        the Federal Food, Drug, and Cosmetic Act (21 
                        U.S.C. 355(b)), or
                            (ii) any biological product the license for 
                        which was submitted under section 351(a) of the 
                        Public Health Service Act (42 U.S.C. 262(a)).
                    (B) Prescription drug.--For purposes of 
                subparagraph (A)(i), the term ``prescription drug'' 
                means any drug which is subject to section 503(b) of 
                the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                353(b)).
            (3) Exclusion of orphan drug sales.--The term ``branded 
        prescription drug sales'' shall not include sales of any drug 
        or biological product with respect to which a credit was 
        allowed for any taxable year under section 45C of the Internal 
        Revenue Code of 1986. The preceding sentence shall not apply 
        with respect to any such drug or biological product after the 
        date on which such drug or biological product is approved by 
        the Food and Drug Administration for marketing for any 
        indication other than the treatment of the rare disease or 
        condition with respect to which such credit was allowed.
            (4) Specified government program.--The term ``specified 
        government program'' means--
                    (A) the Medicare Part D program under part D of 
                title XVIII of the Social Security Act,
                    (B) the Medicare Part B program under part B of 
                title XVIII of the Social Security Act,
                    (C) the Medicaid program under title XIX of the 
                Social Security Act,
                    (D) any program under which branded prescription 
                drugs are procured by the Department of Veterans 
                Affairs,
                    (E) any program under which branded prescription 
                drugs are procured by the Department of Defense, or
                    (F) the TRICARE retail pharmacy program under 
                section 1074g of title 10, United States Code.
    (f) Tax Treatment of Fees.--The fees imposed by this section--
            (1) for purposes of subtitle F of the Internal Revenue Code 
        of 1986, shall be treated as excise taxes with respect to which 
        only civil actions for refund under procedures of such subtitle 
        shall apply, and
            (2) for purposes of section 275 of such Code shall be 
        considered to be a tax described in section 275(a)(6).
    (g) Reporting Requirement.--Not later than the date determined by 
the Secretary of the Treasury following the end of any calendar year, 
the Secretary of Health and Human Services, the Secretary of Veterans 
Affairs, and the Secretary of Defense shall report to the Secretary of 
the Treasury, in such manner as the Secretary of the Treasury 
prescribes, the total branded prescription drug sales for each covered 
entity with respect to each specified government program under such 
Secretary's jurisdiction using the following methodology:
            (1) Medicare part d program.--The Secretary of Health and 
        Human Services shall report, for each covered entity and for 
        each branded prescription drug of the covered entity covered by 
        the Medicare Part D program, the product of--
                    (A) the per-unit ingredient cost, as reported to 
                the Secretary of Health and Human Services by 
                prescription drug plans and Medicare Advantage 
                prescription drug plans, minus any per-unit rebate, 
                discount, or other price concession provided by the 
                covered entity, as reported to the Secretary of Health 
                and Human Services by the prescription drug plans and 
                Medicare Advantage prescription drug plans, and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicare Part D program.
            (2) Medicare part b program.--The Secretary of Health and 
        Human Services shall report, for each covered entity and for 
        each branded prescription drug of the covered entity covered by 
        the Medicare Part B program under section 1862(a) of the Social 
        Security Act, the product of--
                    (A) the per-unit average sales price (as defined in 
                section 1847A(c) of the Social Security Act) or the 
                per-unit Part B payment rate for a separately paid 
                branded prescription drug without a reported average 
                sales price, and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicare Part B program.
        The Centers for Medicare and Medicaid Services shall establish 
        a process for determining the units and the allocated price for 
        purposes of this section for those branded prescription drugs 
        that are not separately payable or for which National Drug 
        Codes are not reported.
            (3) Medicaid program.--The Secretary of Health and Human 
        Services shall report, for each covered entity and for each 
        branded prescription drug of the covered entity covered under 
        the Medicaid program, the product of--
                    (A) the per-unit ingredient cost paid to pharmacies 
                by States for the branded prescription drug dispensed 
                to Medicaid beneficiaries, minus any per-unit rebate 
                paid by the covered entity under section 1927 of the 
                Social Security Act and any State supplemental rebate, 
                and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicaid program.
            (4) Department of veterans affairs programs.--The Secretary 
        of Veterans Affairs shall report, for each covered entity and 
        for each branded prescription drug of the covered entity the 
        total amount paid for each such branded prescription drug 
        procured by the Department of Veterans Affairs for its 
        beneficiaries.
            (5) Department of defense programs and tricare.--The 
        Secretary of Defense shall report, for each covered entity and 
        for each branded prescription drug of the covered entity, the 
        sum of--
                    (A) the total amount paid for each such branded 
                prescription drug procured by the Department of Defense 
                for its beneficiaries, and
                    (B) for each such branded prescription drug 
                dispensed under the TRICARE retail pharmacy program, 
                the product of--
                            (i) the per-unit ingredient cost, minus any 
                        per-unit rebate paid by the covered entity, and
                            (ii) the number of units of the branded 
                        prescription drug dispensed under such program.
    (h) Secretary.--For purposes of this section, the term 
``Secretary'' includes the Secretary's delegate.
    (i) Guidance.--The Secretary of the Treasury shall publish guidance 
necessary to carry out the purposes of this section.
    (j) Application of Section.--This section shall apply to any 
branded prescription drug sales after December 31, 2008.
    (k) Conforming Amendment.--Section 1841(a) of the Social Security 
Act is amended by inserting ``or section 6008(c) of the America's 
Healthy Future Act of 2009'' after ``this part''.

SEC. 6009. IMPOSITION OF ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS AND 
              IMPORTERS.

    (a) Imposition of Fee.--
            (1) In general.--Each covered entity engaged in the 
        business of manufacturing or importing medical devices shall 
        pay to the Secretary not later than the annual payment date of 
        each calendar year beginning after 2009 a fee in an amount 
        determined under subsection (b).
            (2) Annual payment date.--For purposes of this section, the 
        term ``annual payment date'' means with respect to any calendar 
        year the date determined by the Secretary, but in no event 
        later than September 30 of such calendar year.
    (b) Determination of Fee Amount.--
            (1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to $4,000,000,000 as--
                    (A) the covered entity's gross receipts from 
                medical device sales taken into account during the 
                preceding calendar year, bear to
                    (B) the aggregate gross receipts of all covered 
                entities from medical device sales taken into account 
                during such preceding calendar year.
            (2) Gross receipts from sales taken into account.--For 
        purposes of paragraph (1), the gross receipts from medical 
        device sales taken into account during any calendar year with 
        respect to any covered entity shall be determined in accordance 
        with the following table:

 
   With respect to a covered entity's
 aggregate gross receipts from medical       The percentage of gross
 device sales during the calendar year   receipts taken into account is:
               that are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $25,000,000.
  More than $25,000,000................  100 percent.
 

            (3) Secretarial determination.--The Secretary shall 
        calculate the amount of each covered entity's fee for any 
        calendar year under paragraph (1). In calculating such amount, 
        the Secretary shall determine such covered entity's gross 
        receipts from medical device sales on the basis of reports 
        submitted by the covered entity under subsection (f) and 
        through the use of any other source of information available to 
        the Secretary.
    (c) Covered Entity.--
            (1) In general.--For purposes of this section, the term 
        ``covered entity'' means any manufacturer or importer with 
        gross receipts from medical device sales.
            (2) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of 
                section 414 of such Code shall be treated as a single 
                covered entity.
                    (B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 of such Code to this section, 
                section 1563 of such Code shall be applied without 
                regard to subsection (b)(2)(C) thereof.
    (d) Medical Device Sales.--For purposes of this section--
            (1) In general.--The term ``medical device sales'' means 
        sales for use in the United States of any medical device, other 
        than the sales of a medical device that--
                    (A) has been classified in class II under section 
                513 of the Federal Food, Drug, and Cosmetic Act (21 
                U.S.C. 360c) and is primarily sold to consumers at 
                retail for not more than $100 per unit, or
                    (B) has been classified in class I under such 
                section.
            (2) United states.--For purposes of paragraph (1), the term 
        ``United States'' means the several States, the District of 
        Columbia, the Commonwealth of Puerto Rico, and the possessions 
        of the United States.
            (3) Medical device.--For purposes of paragraph (1), the 
        term ``medical device'' means any device (as defined in section 
        201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        321(h))) intended for humans.
    (e) Tax Treatment of Fees.--The fees imposed by this section--
            (1) for purposes of subtitle F of the Internal Revenue Code 
        of 1986, shall be treated as excise taxes with respect to which 
        only civil actions for refund under procedures of such subtitle 
        shall apply, and
            (2) for purposes of section 275 of such Code shall be 
        considered to be a tax described in section 275(a)(6).
    (f) Reporting Requirement.--Not later than the date determined by 
the Secretary following the end of any calendar year, each covered 
entity shall report to the Secretary, in such manner as the Secretary 
prescribes, the gross receipts from medical device sales of such 
covered entity during such calendar year.
    (g) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.
    (h) Guidance.--The Secretary shall publish guidance necessary to 
carry out the purposes of this section, including identification of 
medical devices described in subsection (d)(1)(A) and with respect to 
the treatment of gross receipts from sales of medical devices to 
another covered entity.
    (i) Application of Section.--This section shall apply to any 
medical device sales after December 31, 2008.

SEC. 6010. IMPOSITION OF ANNUAL FEE ON HEALTH INSURANCE PROVIDERS.

    (a) Imposition of Fee.--
            (1) In general.--Each covered entity engaged in the 
        business of providing health insurance shall pay to the 
        Secretary not later than the annual payment date of each 
        calendar year beginning after 2009 a fee in an amount 
        determined under subsection (b).
            (2) Annual payment date.--For purposes of this section, the 
        term ``annual payment date'' means with respect to any calendar 
        year the date determined by the Secretary, but in no event 
        later than September 30 of such calendar year.
    (b) Determination of Fee Amount.--
            (1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to $6,700,000,000 as--
                    (A) the covered entity's net premiums written 
                during the preceding calendar year with respect to 
                health insurance for any United States health risk, 
                bear to
                    (B) the aggregate net premiums of all covered 
                entities written during such preceding calendar year 
                with respect to such health insurance.
            (2) Secretarial determination.--The Secretary shall 
        calculate the amount of each covered entity's fee for any 
        calendar year under paragraph (1). In calculating such amount, 
        the Secretary shall determine such covered entity's net 
        premiums written with respect to any United States health risk 
        on the basis of reports submitted by the covered entity under 
        subsection (f) and through the use of any other source of 
        information available to the Secretary.
    (c) Covered Entity.--
            (1) In general.--For purposes of this section, the term 
        ``covered entity'' means any entity which provides health 
        insurance for any United States health risk.
            (2) Exclusion.--Such term does not include--
                    (A) any employer to the extent that such employer 
                self-insures its employees' health risks, or
                    (B) any governmental entity.
            (3) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of 
                section 414 of such Code shall be treated as a single 
                covered entity (or employer for purposes of paragraph 
                (2)).
                    (B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 of such Code to this section, 
                section 1563 of such Code shall be applied without 
                regard to subsection (b)(2)(C) thereof.
    (d) United States Health Risk.--For purposes of this section, the 
term ``United States health risk'' means the health risk of any 
individual who is--
            (1) a United States citizen,
            (2) a resident of the United States (within the meaning of 
        section 7701(b)(1)(A) of the Internal Revenue Code of 1986), or
            (3) located in the United States, with respect to the 
        period such individual is so located.
    (e) Tax Treatment of Fees.--The fees imposed by this section--
            (1) for purposes of subtitle F of the Internal Revenue Code 
        of 1986, shall be treated as excise taxes with respect to which 
        only civil actions for refund under procedures of such subtitle 
        shall apply, and
            (2) for purposes of section 275 of such Code shall be 
        considered to be a tax described in section 275(a)(6).
    (f) Reporting Requirement.--Not later than the date determined by 
the Secretary following the end of any calendar year, each covered 
entity shall report to the Secretary, in such manner as the Secretary 
prescribes, the covered entity's net premiums written during such 
calendar year with respect to health insurance for any United States 
health risk.
    (g) Additional Definitions.--For purposes of this section--
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
            (2) United states.--The term ``United States'' means the 
        several States, the District of Columbia, the Commonwealth of 
        Puerto Rico, and the possessions of the United States.
    (h) Guidance.--The Secretary shall publish guidance necessary to 
carry out the purposes of this section.
    (i) Application of Section.--This section shall apply to any net 
premiums written after December 31, 2008, with respect to health 
insurance for any United States health risk.

SEC. 6011. STUDY AND REPORT OF EFFECT ON VETERANS HEALTH CARE.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a 
study on the effect (if any) of the provisions of sections 6008, 6009, 
and 6010 on--
            (1) the cost of medical care provided to veterans, and
            (2) veterans' access to medical devices and branded 
        prescription drugs.
    (b) Report.--The Secretary of Veterans Affairs shall report the 
results of the study under subsection (a) to the Committee on Ways and 
Means of the House of Representatives and to the Committee on Finance 
of the Senate not later than December 31, 2012.

SEC. 6012. ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE 
              PART D SUBSIDY.

    (a) In General.--Section 139A of the Internal Revenue Code of 1986 
is amended by striking the second sentence.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2010.

SEC. 6013. MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL EXPENSES.

    (a) In General.--Subsection (a) of section 213 of the Internal 
Revenue Code of 1986 is amended by striking ``7.5 percent'' and 
inserting ``10 percent''.
    (b) Temporary Waiver of Increase for Certain Seniors.--Section 213 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new subsection:
    ``(f) Special Rule for 2013, 2014, 2015, and 2016.--In the case of 
a taxable year beginning after December 31, 2012, and ending before 
January 1, 2017, subsection (a) shall be applied with respect to a 
taxpayer by substituting `7.5 percent' for `10 percent' if such 
taxpayer or such taxpayer's spouse has attained age 65 before the close 
of such taxable year.''.
    (c) Conforming Amendment.--Section 56(b)(1)(B) of the Internal 
Revenue Code of 1986 is amended by striking ``by substituting `10 
percent' for `7.5 percent''' and inserting ``without regard to 
subsection (f) of such section''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable year beginning after December 31, 2012.

SEC. 6014. LIMITATION ON EXCESSIVE REMUNERATION PAID BY CERTAIN HEALTH 
              INSURANCE PROVIDERS.

    (a) In General.--Section 162(m) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
            ``(6) Special rule for application to certain health 
        insurance providers.--
                    ``(A) In general.--No deduction shall be allowed 
                under this chapter--
                            ``(i) in the case of applicable individual 
                        remuneration which is for any disqualified 
                        taxable year beginning after December 31, 2012, 
                        and which is attributable to services performed 
                        by an applicable individual during such taxable 
                        year, to the extent that the amount of such 
                        remuneration exceeds $500,000, or
                            ``(ii) in the case of deferred deduction 
                        remuneration for any taxable year beginning 
                        after December 31, 2012, for services performed 
                        by an applicable individual during any 
                        disqualified taxable year beginning after 
                        December 31, 2009, to the extent that the 
                        amount of such remuneration exceeds $500,000 
                        reduced (but not below zero) by the sum of--
                                    ``(I) the applicable individual 
                                remuneration for such taxable year, 
                                plus
                                    ``(II) the portion of the deferred 
                                deduction remuneration for such 
                                services which was taken into account 
                                under this clause in a preceding 
                                taxable year.
                    ``(B) Disqualified taxable year.--For purposes of 
                this paragraph, the term `disqualified taxable year' 
                means, with respect to any employer, any taxable year 
                for which such employer is a covered health insurance 
                provider.
                    ``(C) Covered health insurance provider.--For 
                purposes of this paragraph--
                            ``(i) In general.--The term `covered health 
                        insurance provider' means--
                                    ``(I) with respect to taxable years 
                                beginning after December 31, 2009, and 
                                before January 1, 2013, any employer 
                                which is a health insurance issuer (as 
                                defined in section 9832(b)(2)) and 
                                which receives premiums from providing 
                                health insurance coverage (as defined 
                                in section 9832(b)(1)), and
                                    ``(II) with respect to taxable 
                                years beginning after December 31, 
                                2012, any employer which is a health 
                                insurance issuer (as defined in section 
                                9832(b)(2)) and with respect to which 
                                not less than 25 percent of the gross 
                                premiums received from providing health 
                                insurance coverage (as defined in 
                                section 9832(b)(1)) is from essential 
                                health benefits coverage (as defined in 
                                section 5000A(f)(1)).
                            ``(ii) Aggregation rules.--Two or more 
                        persons who are treated as a single employer 
                        under subsection (b), (c), (m), or (o) of 
                        section 414 shall be treated as a single 
                        employer, except that in applying section 
                        1563(a) for purposes of any such subsection, 
                        paragraphs (2) and (3) thereof shall be 
                        disregarded.
                    ``(D) Applicable individual remuneration.--For 
                purposes of this paragraph, the term `applicable 
                individual remuneration' means, with respect to any 
                applicable individual for any disqualified taxable 
                year, the aggregate amount allowable as a deduction 
                under this chapter for such taxable year (determined 
                without regard to this subsection) for remuneration (as 
                defined in paragraph (4)(D)) for services performed by 
                such individual (whether or not during the taxable 
                year). Such term shall not include any deferred 
                deduction remuneration with respect to services 
                performed during the disqualified taxable year.
                    ``(E) Deferred deduction remuneration.--For 
                purposes of this paragraph, the term and `deferred 
                deduction remuneration' means remuneration which would 
                be applicable individual remuneration for services 
                performed in a disqualified taxable year but for the 
                fact that the deduction under this chapter (determined 
                without regard to this paragraph) for such remuneration 
                is allowable in a subsequent taxable year.
                    ``(F) Applicable individual.--For purposes of this 
                paragraph, the term `applicable individual' means, with 
                respect to any covered health insurance provider for 
                any disqualified taxable year, any individual--
                            ``(i) who is an officer, director, or 
                        employee in such taxable year, or
                            ``(ii) who provides services for or on 
                        behalf of such covered health insurance 
                        provider during such taxable year.
                    ``(G) Coordination.--Rules similar to the rules of 
                subparagraphs (F) and (G) of paragraph (4) shall apply 
                for purposes of this paragraph.
                    ``(H) Regulatory authority.--The Secretary may 
                prescribe such guidance, rules, or regulations as are 
                necessary to carry out the purposes of this 
                paragraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2009, with respect to 
services performed after such date.

                      Subtitle B--Other Provisions

SEC. 6021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN TRIBAL 
              GOVERNMENTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139C the following new section:

``SEC. 139D. INDIAN HEALTH CARE BENEFITS.

    ``(a) General Rule.--Except as otherwise provided in this section, 
gross income does not include the value of any qualified Indian health 
care benefit.
    ``(b) Qualified Indian Health Care Benefit.--For purposes of this 
section, the term `qualified Indian health care benefit' means--
            ``(1) any health service or benefit provided or purchased, 
        directly or indirectly, by the Indian Health Service through a 
        grant to or a contract or compact with an Indian tribe or 
        tribal organization, or through a third-party program funded by 
        the Indian Health Service,
            ``(2) medical care provided or purchased by, or amounts to 
        reimburse for such medical care provided by, an Indian tribe or 
        tribal organization for, or to, a member of an Indian tribe, 
        including a spouse or dependent of such a member,
            ``(3) coverage under accident or health insurance (or an 
        arrangement having the effect of accident or health insurance), 
        or an accident or health plan, provided by an Indian tribe or 
        tribal organization for medical care to a member of an Indian 
        tribe, include a spouse or dependent of such a member, and
            ``(4) any other medical care provided by an Indian tribe or 
        tribal organization that supplements, replaces, or substitutes 
        for a program or service relating to medical care provided by 
        the Federal government to Indian tribes or members of such a 
        tribe.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Indian tribe.--The term `Indian tribe' has the 
        meaning given such term by section 45A(c)(6).
            ``(2) Tribal organization.--The term `tribal organization' 
        has the meaning given such term by section 4(l) of the Indian 
        Self-Determination and Education Assistance Act.
            ``(3) Medical care.--The term `medical care' has the same 
        meaning as when used in section 213.
            ``(4) Accident or health insurance; accident or health 
        plan.--The terms `accident or health insurance' and `accident 
        or health plan' have the same meaning as when used in section 
        105.
            ``(5) Dependent.--The term `dependent' has the meaning 
        given such term by section 152, determined without regard to 
        subsections (b)(1), (b)(2), and (d)(1)(B) thereof.
    ``(d) Denial of Double Benefit.--Gross income of a beneficiary of 
any qualified Indian health care benefit shall include the amount of 
any such benefit which is not includible in gross income of such 
beneficiary, or for which a deduction is allowable to such beneficiary, 
under any other provision of this chapter.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to section 139C the 
following new item:

``Sec. 139D. Indian health care benefits.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to benefits and coverage provided after the date of the enactment 
of this Act.
    (d) No Inference.--Nothing in the amendments made by this section 
shall be construed to create an inference with respect to the exclusion 
from gross income of--
            (1) benefits provided by an Indian tribe or tribal 
        organization that are not within the scope of this section, and
            (2) benefits provided prior to the date of the enactment of 
        this Act.

SEC. 6022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS FOR SMALL 
              BUSINESSES.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
(relating to cafeteria plans), as amended by this Act, is amended by 
redesignating subsections (j) and (k) as subsections (k) and (l), 
respectively, and by inserting after subsection (i) the following new 
subsection:
    ``(j) Simple Cafeteria Plans for Small Businesses.--
            ``(1) In general.--An eligible employer maintaining a 
        simple cafeteria plan with respect to which the requirements of 
        this subsection are met for any year shall be treated as 
        meeting any applicable nondiscrimination requirement during 
        such year.
            ``(2) Simple cafeteria plan.--For purposes of this 
        subsection, the term `simple cafeteria plan' means a cafeteria 
        plan--
                    ``(A) which is established and maintained by an 
                eligible employer, and
                    ``(B) with respect to which the contribution 
                requirements of paragraph (3), and the eligibility and 
                participation requirements of paragraph (4), are met.
            ``(3) Contributions requirements.--
                    ``(A) In general.--The requirements of this 
                paragraph are met if, under the plan the employer is 
                required, without regard to whether a qualified 
                employee makes any salary reduction contribution, to 
                make a contribution to provide qualified benefits under 
                the plan on behalf of each qualified employee in an 
                amount equal to--
                            ``(i) a uniform percentage (not less than 2 
                        percent) of the employee's compensation for the 
                        plan year, or
                            ``(ii) an amount which is not less than the 
                        lesser of--
                                    ``(I) 6 percent of the employee's 
                                compensation for the plan year, or
                                    ``(II) twice the amount of the 
                                salary reduction contributions of each 
                                qualified employee.
                    ``(B) Matching contributions on behalf of highly 
                compensated and key employees.--The requirements of 
                subparagraph (A)(ii) shall not be treated as met if, 
                under the plan, the rate of contributions with respect 
                to any salary reduction contribution of a highly 
                compensated or key employee at any rate of contribution 
                is greater than that with respect to an employee who is 
                not a highly compensated or key employee.
                    ``(C) Additional contributions.--Subject to 
                subparagraph (B), nothing in this paragraph shall be 
                treated as prohibiting an employer from making 
                contributions to provide qualified benefits under the 
                plan in addition to contributions required under 
                subparagraph (A).
                    ``(D) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Salary reduction contribution.--The 
                        term `salary reduction contribution' means, 
                        with respect to a cafeteria plan, any amount 
                        which is contributed to the plan at the 
                        election of the employee and which is not 
                        includible in gross income by reason of this 
                        section.
                            ``(ii) Qualified employee.--The term 
                        `qualified employee' means, with respect to a 
                        cafeteria plan, any employee who is not a 
                        highly compensated or key employee and who is 
                        eligible to participate in the plan.
                            ``(iii) Highly compensated employee.--The 
                        term `highly compensated employee' has the 
                        meaning given such term by section 414(q).
                            ``(iv) Key employee.--The term `key 
                        employee' has the meaning given such term by 
                        section 416(i).
            ``(4) Minimum eligibility and participation requirements.--
                    ``(A) In general.--The requirements of this 
                paragraph shall be treated as met with respect to any 
                year if, under the plan--
                            ``(i) all employees who had at least 1,000 
                        hours of service for the preceding plan year 
                        are eligible to participate, and
                            ``(ii) each employee eligible to 
                        participate in the plan may, subject to terms 
                        and conditions applicable to all participants, 
                        elect any benefit available under the plan.
                    ``(B) Certain employees may be excluded.--For 
                purposes of subparagraph (A)(i), an employer may elect 
                to exclude under the plan employees--
                            ``(i) who have not attained the age of 21 
                        before the close of a plan year,
                            ``(ii) who have less than 1 year of service 
                        with the employer as of any day during the plan 
                        year,
                            ``(iii) who are covered under an agreement 
                        which the Secretary of Labor finds to be a 
                        collective bargaining agreement if there is 
                        evidence that the benefits covered under the 
                        cafeteria plan were the subject of good faith 
                        bargaining between employee representatives and 
                        the employer, or
                            ``(iv) who are described in section 
                        410(b)(3)(C) (relating to nonresident aliens 
                        working outside the United States).
                A plan may provide a shorter period of service or 
                younger age for purposes of clause (i) or (ii).
            ``(5) Eligible employer.--For purposes of this subsection--
                    ``(A) In general.--The term `eligible employer' 
                means, with respect to any year, any employer if such 
                employer employed an average of 100 or fewer employees 
                on business days during either of the 2 preceding 
                years. For purposes of this subparagraph, a year may 
                only be taken into account if the employer was in 
                existence throughout the year.
                    ``(B) Employers not in existence during preceding 
                year.--If an employer was not in existence throughout 
                the preceding year, the determination under 
                subparagraph (A) shall be based on the average number 
                of employees that it is reasonably expected such 
                employer will employ on business days in the current 
                year.
                    ``(C) Growing employers retain treatment as small 
                employer.--
                            ``(i) In general.--If--
                                    ``(I) an employer was an eligible 
                                employer for any year (a `qualified 
                                year'), and
                                    ``(II) such employer establishes a 
                                simple cafeteria plan for its employees 
                                for such year,
                        then, notwithstanding the fact the employer 
                        fails to meet the requirements of subparagraph 
                        (A) for any subsequent year, such employer 
                        shall be treated as an eligible employer for 
                        such subsequent year with respect to employees 
                        (whether or not employees during a qualified 
                        year) of any trade or business which was 
                        covered by the plan during any qualified year.
                            ``(ii) Exception.--This subparagraph shall 
                        cease to apply if the employer employs an 
                        average of 200 or more employees on business 
                        days during any year preceding any such 
                        subsequent year.
                    ``(D) Special rules.--
                            ``(i) Predecessors.--Any reference in this 
                        paragraph to an employer shall include a 
                        reference to any predecessor of such employer.
                            ``(ii) Aggregation rules.--All persons 
                        treated as a single employer under subsection 
                        (a) or (b) of section 52, or subsection (n) or 
                        (o) of section 414, shall be treated as one 
                        person.
            ``(6) Applicable nondiscrimination requirement.--For 
        purposes of this subsection, the term `applicable 
        nondiscrimination requirement' means any requirement under 
        subsection (b) of this section, section 79(d), section 105(h), 
        or paragraph (2), (3), (4), or (8) of section 129(d).
            ``(7) Compensation.--The term `compensation' has the 
        meaning given such term by section 414(s).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2010.

SEC. 6023. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48C the following new section:

``SEC. 48D. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying 
therapeutic discovery project credit for any taxable year is an amount 
equal to 50 percent of the qualified investment for such taxable year 
with respect to any qualifying therapeutic discovery project of an 
eligible taxpayer.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the aggregate 
        amount of the costs paid or incurred in such taxable year for 
        expenses necessary for and directly related to the conduct of a 
        qualifying therapeutic discovery project.
            ``(2) Limitation.--The amount which is treated as qualified 
        investment for all taxable years with respect to any qualifying 
        therapeutic discovery project shall not exceed the amount 
        certified by the Secretary as eligible for the credit under 
        this section.
            ``(3) Exclusions.--The qualified investment for any taxable 
        year with respect to any qualifying therapeutic discovery 
        project shall not take into account any cost--
                    ``(A) for remuneration for an employee described in 
                section 162(m)(3),
                    ``(B) for interest expenses,
                    ``(C) for facility maintenance expenses,
                    ``(D) which is identified as a service cost under 
                section 1.263A-1(e)(4) of title 26, Code of Federal 
                Regulations, or
                    ``(E) for any other expense as determined by the 
                Secretary as appropriate to carry out the purposes of 
                this section.
            ``(4) Certain progress expenditure rules made applicable.--
        In the case of costs described in paragraph (1) that are paid 
        for property of a character subject to an allowance for 
        depreciation, rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before the date 
        of the enactment of the Revenue Reconciliation Act of 1990) 
        shall apply for purposes of this section.
            ``(5) Application of subsection.--An investment shall be 
        considered a qualified investment under this subsection only if 
        such investment is made in a taxable year beginning in 2009 or 
        2010.
    ``(c) Definitions.--
            ``(1) Qualifying therapeutic discovery project.--The term 
        `qualifying therapeutic discovery project' means a project 
        which is designed--
                    ``(A) to treat or prevent diseases or conditions by 
                conducting pre-clinical activities, clinical trials, 
                and clinical studies, or carrying out research 
                protocols, for the purpose of securing approval of a 
                product under section 505(b) of the Federal Food, Drug, 
                and Cosmetic Act or section 351(a) of the Public Health 
                Service Act,
                    ``(B) to diagnose diseases or conditions or to 
                determine molecular factors related to diseases or 
                conditions by developing molecular diagnostics to guide 
                therapeutic decisions, or
                    ``(C) to develop a product, process, or technology 
                to further the delivery or administration of 
                therapeutics.
            ``(2) Eligible taxpayer.--
                    ``(A) In general.--The term `eligible taxpayer' 
                means a taxpayer which employs not more than 250 
                employees in all businesses of the taxpayer at the time 
                of the submission of the application under subsection 
                (d)(2).
                    ``(B) Aggregation rules.--All persons treated as a 
                single employer under subsection (a) or (b) of section 
                52, or subsection (m) or (o) of section 414, shall be 
                so treated for purposes of this paragraph.
            ``(3) Facility maintenance expenses.--The term `facility 
        maintenance expenses' means costs paid or incurred to maintain 
        a facility, including--
                    ``(A) mortgage or rent payments,
                    ``(B) insurance payments,
                    ``(C) utility and maintenance costs, and
                    ``(D) costs of employment of maintenance personnel.
    ``(d) Qualifying Therapeutic Discovery Project Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Not later than 60 days after the 
                date of the enactment of this section, the Secretary, 
                in consultation with the Secretary of Health and Human 
                Services, shall establish a qualifying therapeutic 
                discovery project program to consider and award 
                certifications for qualified investments eligible for 
                credits under this section to qualifying therapeutic 
                discovery project sponsors.
                    ``(B) Limitation.--The total amount of credits that 
                may be allocated under the program shall not exceed 
                $1,000,000,000 for the 2-year period beginning with 
                2009.
            ``(2) Certification.--
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application containing such information as the 
                Secretary may require during the period beginning on 
                the date the Secretary establishes the program under 
                paragraph (1).
                    ``(B) Time for review of applications.--The 
                Secretary shall take action to approve or deny any 
                application under subparagraph (A) within 30 days of 
                the submission of such application.
                    ``(C) Multi-year applications.--An application for 
                certification under subparagraph (A) may include a 
                request for an allocation of credits for more than 1 of 
                the years described in paragraph (1)(B).
            ``(3) Selection criteria.--In determining the qualifying 
        therapeutic discovery projects with respect to which qualified 
        investments may be certified under this section, the 
        Secretary--
                    ``(A) shall take into consideration only those 
                projects that show reasonable potential--
                            ``(i) to result in new therapies--
                                    ``(I) to treat areas of unmet 
                                medical need, or
                                    ``(II) to prevent, detect, or treat 
                                chronic or acute diseases and 
                                conditions,
                            ``(ii) to reduce long-term health care 
                        costs in the United States, or
                            ``(iii) to significantly advance the goal 
                        of curing cancer within the 30-year period 
                        beginning on the date the Secretary establishes 
                        the program under paragraph (1), and
                    ``(B) shall take into consideration which projects 
                have the greatest potential--
                            ``(i) to create and sustain (directly or 
                        indirectly) high quality, high-paying jobs in 
                        the United States, and
                            ``(ii) to advance United States 
                        competitiveness in the fields of life, 
                        biological, and medical sciences.
            ``(4) Disclosure of allocations.--The Secretary shall, upon 
        making a certification under this subsection, publicly disclose 
        the identity of the applicant and the amount of the credit with 
        respect to such applicant.
    ``(e) Special Rules.--
            ``(1) Basis adjustment.--For purposes of this subtitle, if 
        a credit is allowed under this section for an expenditure 
        related to property of a character subject to an allowance for 
        depreciation, the basis of such property shall be reduced by 
        the amount of such credit.
            ``(2) Denial of double benefit.--
                    ``(A) Bonus depreciation.--A credit shall not be 
                allowed under this section for any investment for which 
                bonus depreciation is allowed under section 168(k), 
                1400L(b)(1), or 1400N(d)(1).
                    ``(B) Deductions.--No deduction under this subtitle 
                shall be allowed for the portion of the expenses 
                otherwise allowable as a deduction taken into account 
                in determining the credit under this section for the 
                taxable year which is equal to the amount of the credit 
                determined for such taxable year under subsection (a) 
                attributable to such portion. This subparagraph shall 
                not apply to expenses related to property of a 
                character subject to an allowance for depreciation the 
                basis of which is reduced under paragraph (1), or which 
                are described in section 280C(g).
                    ``(C) Credit for research activities.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), any expenses taken into account 
                        under this section for a taxable year shall not 
                        be taken into account for purposes of 
                        determining the credit allowable under section 
                        41 or 45C for such taxable year.
                            ``(ii) Expenses included in determining 
                        base period research expenses.--Any expenses 
                        for any taxable year which are qualified 
                        research expenses (within the meaning of 
                        section 41(b)) shall be taken into account in 
                        determining base period research expenses for 
                        purposes of applying section 41 to subsequent 
                        taxable years.
    ``(f) Coordination With Department of Treasury Loans.--In the case 
of any investment with respect to which the Secretary makes a loan 
under section 6023(e) of the America's Healthy Future Act of 2009--
            ``(1) Denial of credit.--No credit shall be determined 
        under this section with respect to such investment for the 
        taxable year in which such loan is made or any subsequent 
        taxable year.
            ``(2) Recapture of credits for progress expenditures made 
        before loan.--If a credit was determined under this section 
        with respect to such investment for any taxable year ending 
        before such loan is made--
                    ``(A) the tax imposed under subtitle A on the 
                taxpayer for the taxable year in which such loan is 
                made shall be increased by so much of such credit as 
                was allowed under section 38,
                    ``(B) the general business carryforwards under 
                section 39 shall be adjusted so as to recapture the 
                portion of such credit which was not so allowed, and
                    ``(C) the amount of such loan shall be determined 
                without regard to any reduction in the basis of any 
                property of a character subject to an allowance for 
                depreciation by reason of such credit.''.
    (b) Inclusion as Part of Investment Credit.--Section 46 of the 
Internal Revenue Code of 1986 is amended--
            (1) by adding a comma at the end of paragraph (2),
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``, and'', and
            (3) by adding at the end the following new paragraph:
            ``(6) the qualifying therapeutic discovery project 
        credit.''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
        1986 is amended--
                    (A) by striking ``and'' at the end of clause (iv),
                    (B) by striking the period at the end of clause (v) 
                and inserting ``, and'', and
                    (C) by adding at the end the following new clause:
                            ``(vi) the basis of any property to which 
                        paragraph (1) of section 48D(e) applies which 
                        is part of a qualifying therapeutic discovery 
                        project under such section 48D.''.
            (2) Section 280C of such Code is amended by adding at the 
        end the following new subsection:
    ``(g) Qualifying Therapeutic Discovery Project Credit.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified investment (as defined in section 
        48D(b)) otherwise allowable as a deduction for the taxable year 
        which--
                    ``(A) would be qualified research expenses (as 
                defined in section 41(b)), basic research expenses (as 
                defined in section 41(e)(2)), or qualified clinical 
                testing expenses (as defined in section 45C(b)) if the 
                credit under section 41 or section 45C were allowed 
                with respect to such expenses for such taxable year, 
                and
                    ``(B) is equal to the amount of the credit 
                determined for such taxable year under section 48D(a), 
                reduced by--
                            ``(i) the amount disallowed as a deduction 
                        by reason of section 48D(e)(2)(B), and
                            ``(ii) the amount of any basis reduction 
                        under section 48D(e)(1).
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--In the case of expenses described in 
        paragraph (1)(A) taken into account in determining the credit 
        under section 48D for the taxable year, if--
                    ``(A) the amount of the portion of the credit 
                determined under such section with respect to such 
                expenses, exceeds
                    ``(B) the amount allowable as a deduction for such 
                taxable year for such expenses (determined without 
                regard to paragraph (1)),
        the amount chargeable to capital account for the taxable year 
        for such expenses shall be reduced by the amount of such 
        excess.
            ``(3) Controlled groups.--Paragraph (3) of subsection (b) 
        shall apply for purposes of this subsection.''.
    (d) Clerical Amendment.--The table of sections for subpart E of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 48C the 
following new item:

``Sec. 48D. Qualifying therapeutic discovery project credit.''.
    (e) Loans for Qualified Investments in Therapeutic Discovery 
Projects in Lieu of Tax Credits.--
            (1) In general.--Upon application, the Secretary of the 
        Treasury shall, subject to the requirements of this subsection, 
        provide a loan to each person who makes a qualified investment 
        in a qualifying therapeutic discovery project in the amount of 
        50 percent of such investment. No loan shall be made under this 
        subsection with respect to any investment unless such 
        investment is made during a taxable year beginning in 2009 or 
        2010. The Secretary of the Treasury may by regulations 
        prescribe terms for any loan made under this paragraph.
            (2) Application.--
                    (A) In general.--At the stated election of the 
                applicant, an application for certification under 
                section 48D(d)(2) of the Internal Revenue Code of 1986 
                for a credit under such section for the taxable year of 
                the applicant which begins in 2009 shall be considered 
                to be an application for a loan under paragraph (1) for 
                such taxable year.
                    (B) Taxable years beginning in 2010.--An 
                application for a loan under paragraph (1) for a 
                taxable year beginning in 2010 shall be submitted--
                            (i) not earlier than the day after the last 
                        day of such taxable year, and
                            (ii) not later than the due date (including 
                        extensions) for filing the return of tax for 
                        such taxable year.
                    (C) Information to be submitted.--An application 
                for a loan under paragraph (1) shall include such 
                information and be in such form as the Secretary may 
                require to state the amount of the credit allowable 
                (but for the receipt of a loan under this subsection) 
                under section 48D for the taxable year for the 
                qualified investment with respect to which such 
                application is made.
            (3) Time for payment of loan proceeds.--
                    (A) In general.--The Secretary of the Treasury 
                shall make payment of the amount of any loan under 
                paragraph (1) during the 30-day period beginning on the 
                later of--
                            (i) the date of the application for such 
                        loan, or
                            (ii) the date the qualified investment for 
                        which the loan is being made is made.
                    (B) Regulations.--In the case of investments of an 
                ongoing nature, the Secretary shall issue regulations 
                to determine the date on which a qualified investment 
                shall be deemed to have been made for purposes of this 
                paragraph.
            (4) Qualified investment.--For purposes of this subsection, 
        the term ``qualified investment'' means a qualified investment 
        that is certified under section 48D(d) of the Internal Revenue 
        Code of 1986 for purposes of the credit under such section 48D.
            (5) Application of certain rules.--
                    (A) In general.--In making loans under this 
                subsection, the Secretary of the Treasury shall apply 
                rules similar to the rules of section 50 of the 
                Internal Revenue Code of 1986. In applying such rules, 
                any increase in tax under chapter 1 of such Code by 
                reason of an investment ceasing to be a qualified 
                investment shall be imposed on the person to whom the 
                loan was made.
                    (B) Special rules.--
                            (i) Recapture of excessive loan amounts.--
                        If the amount of a loan made under this 
                        subsection exceeds the amount allowable as a 
                        loan under this subsection, such excess shall 
                        be recaptured under subparagraph (A) as if the 
                        investment to which such excess portion of the 
                        loan relates had ceased to be a qualified 
                        investment immediately after such loan was 
                        made.
                            (ii) Loan information not treated as return 
                        information.--In no event shall the amount of a 
                        loan made under paragraph (1), the identity of 
                        the person to whom such loan was made, or a 
                        description of the investment with respect to 
                        which such loan was made be treated as return 
                        information for purposes of section 6103 of the 
                        Internal Revenue Code of 1986.
            (6) Exception for certain non-taxpayers.--The Secretary of 
        the Treasury shall not make any loan under this subsection to--
                    (A) any Federal, State, or local government (or any 
                political subdivision, agency, or instrumentality 
                thereof),
                    (B) any organization described in section 501(c) of 
                the Internal Revenue Code of 1986 and exempt from tax 
                under section 501(a) of such Code,
                    (C) any entity referred to in paragraph (4) of 
                section 54(j) of such Code, or
                    (D) any partnership or other pass-thru entity any 
                partner (or other holder of an equity or profits 
                interest) of which is described in subparagraph (A), 
                (B) or (C).
        In the case of a partnership or other pass-thru entity 
        described in subparagraph (D), partners and other holders of 
        any equity or profits interest shall provide to such 
        partnership or entity such information as the Secretary of the 
        Treasury may require to carry out the purposes of this 
        paragraph.
            (7) Secretary.--Any reference in this subsection to the 
        Secretary of the Treasury shall be treated as including the 
        Secretary's delegate.
            (8) Other terms.--Any term used in this subsection which is 
        also used in section 48D of the Internal Revenue Code of 1986 
        shall have the same meaning for purposes of this subsection as 
        when used in such section.
            (9) Denial of double benefit.--No credit shall be allowed 
        under section 46(6) of the Internal Revenue Code of 1986 by 
        reason of section 48D of such Code for any investment for which 
        a loan is awarded under this subsection.
            (10) Appropriations.--There is hereby appropriated to the 
        Secretary of the Treasury such sums as may be necessary to 
        carry out this subsection.
            (11) Termination.--The Secretary of the Treasury shall not 
        make any loan to any person under this subsection unless the 
        application of such person for such loan is received before 
        January 1, 2013.
    (f) Effective Date.--The amendments made by subsections (a) through 
(d) of this section shall apply to amounts paid or incurred after 
December 31, 2008, in taxable years beginning after such date.
                                                       Calendar No. 184

111th CONGRESS

  1st Session

                                S. 1796

                          [Report No. 111-89]

_______________________________________________________________________

                                 A BILL

To provide affordable, quality health care for all Americans and reduce 
      the growth in health care spending, and for other purposes.

_______________________________________________________________________

                            October 19, 2009

                 Read twice and placed on the calendar
```