I 

116TH CONGRESS 

1ST SESSION H. R. 1332 

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

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

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 25, 2019 

Mr. WESTERMAN introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on 

Ways and Means, the Judiciary, Oversight and Reform, Education and 

Labor, Rules, the Budget, Armed Services, and House Administration, 

for a period to be subsequently determined by the Speaker, in each case 

for consideration of such provisions as fall within the jurisdiction of the 

committee concerned 

A BILL 

To address the high costs of health care services, prescription 

drugs, and health insurance coverage in the United 

States, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Fair Care Act of 2019’’. 

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

7 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—PRIVATE-SECTOR HEALTH INSURANCE REFORMS 

Subtitle A—Commercial Health Insurance Provisions 

Sec. 101. Invisible high risk pool reinsurance program; tax on exchange plans. 

Sec. 102. Change in permissible age variation in health insurance premium 

rates. 

Sec. 103. Employer health insurance mandate repeal. 

Sec. 104. Employer benefits reports. 

Sec. 105. Waivers for State innovation. 

Sec. 106. State-operated Exchanges flexibility for open enrollment periods. 

Sec. 107. Enrollment periods. 

Sec. 108. Short-term limited duration insurance. 

Sec. 109. Promoting health plans that cover individuals in more than one State. 

Sec. 110. Restoring the application of antitrust laws to the business of health 

insurance. 

Sec. 111. Health plans created under PPACA or offered through Exchanges to 

be only health plans Federal Government may make available 

to President, Vice President, Members of Congress, and Federal employees. 

Sec. 112. Cost-sharing reductions. 

Sec. 113. Health savings accounts. 

Sec. 114. Adding copper plans to Exchanges. 

Sec. 115. Eliminating FEHBP eligibility for annuitants. 

Subtitle B—Association Health Plans 

Sec. 121. Rules governing association health plans. 

Sec. 122. Clarification of treatment of single employer arrangements. 

Sec. 123. Enforcement provisions relating to association health plans. 

Sec. 124. Cooperation between Federal and State authorities. 

Sec. 125. Effective date and transitional and other rules. 

Subtitle C—Tax-Related Provisions 

Sec. 131. Premium assistance adjustment to reflect age. 

Sec. 132. Repeal of annual fee on health insurance providers. 

Sec. 133. Repeal of medical device excise tax. 

Sec. 134. Inclusion in income of certain costs of employer-provided coverage 

under health plans. 

Sec. 135. Inclusion of certain over-the-counter medical products as qualified 

medical expenses. 

Sec. 136. Repeal of limitation on health flexible spending arrangements. 

Sec. 137. Medicare part D tax deduction. 

Sec. 138. Repeal of net investment income tax. 

Sec. 139. Basis for purposes of determining gain or loss. 

Sec. 140. Deduction for qualified charity care. 

Sec. 141. Limitation on liability for volunteer health care professionals. 

TITLE II—MEDICARE AND MEDICAID REFORMS 

Subtitle A—Medicare and Medicaid Reforms 

Sec. 201. Flexible block grant option for States. 

Sec. 202. Medicaid eligibility determinations. 


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Sec. 203. Lowering safe harbor threshold with respect to State taxes on health 

care providers. 

Sec. 204. Income limitations for refundable credits for coverage under a qualified health plan. 

Subtitle B—Medicare 

Sec. 221. Off-campus provider-based department medicare site neutral payment. 

Sec. 222. Elimination of Medicare eligibility for certain individuals. 

Sec. 223. Medicare coverage of bad debt. 

Subtitle C—Medical Malpractice Reform 

Sec. 231. Encouraging speedy resolution of claims. 

Sec. 232. Compensating patient injury. 

Sec. 233. Maximizing patient recovery. 

Sec. 234. Authorization of payment of future damages to claimants in health 

care lawsuits. 

Sec. 235. Product liability for health care providers. 

Sec. 236. Definitions. 

Sec. 237. Effect on other laws. 

Sec. 238. Rules of construction. 

Sec. 239. Effective date. 

Sec. 240. Limitation on expert witness testimony. 

Sec. 241. Communications following unanticipated outcome. 

Sec. 242. Expert witness qualifications. 

Sec. 243. Affidavit of merit. 

Sec. 244. Notice of intent to commence lawsuit. 

TITLE III—PRESCRIPTION DRUG COMPETITION 

Subtitle A—Eliminating Delays of Generic Drugs and Biosimilar Products 

Sec. 301. Actions for delays of generic drugs and biosimilar biological products. 

Sec. 302. REMS approval process for subsequent filers. 

Subtitle B—Increasing Access to Drugs and Biosimilar Products 

Sec. 311. Expedited development and priority review for generic complex drug 

products. 

Sec. 312. Increasing pharmaceutical options to treat an unmet medical need. 

Sec. 313. Preemption of State barriers to the substitution of biosimilar products. 

Subtitle C—Limiting Exclusivity Periods Delaying Competition 

Sec. 321. Limiting exclusivity periods for drugs treating rare diseases and conditions. 

Sec. 322. Limiting exclusivity for biosimilar products. 

Subtitle D—Congressional Review of Agency Rulemaking 

Sec. 331. Congressional review of the Food and Drug Administration rulemaking. 

Sec. 332. Government Accountability Office study of rules. 

Subtitle E—Medicare Prescription Drug Competition 


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Sec. 341. Medicare drug coverage. 

Sec. 342. PBM transparency and elimination of DIR fees. 

Sec. 343. Sunset of limit on maximum rebate amount for single source drugs 

and innovator multiple source drugs. 

Sec. 344. Regulation of manufacturer-sponsored copay contributions. 

Sec. 345. Data reporting to improve the transparency regarding how 340B hospital covered entities provide care for patients. 

Sec. 346. Requiring 340B drug discount program reports by DSH hospital covered entities on low-income utilization rate of outpatient hospital services. 

TITLE IV—PROVIDER COMPETITION 

Sec. 401. Hospital consolidation. 

Sec. 402. Price transparency. 

Sec. 403. Repealing shared savings incentives from Medicare shared savings 

program. 

Sec. 404. Repeal of health care reform provisions limiting Medicare exception 

to the prohibition on certain physician referrals for hospitals. 

Sec. 405. Advisory group on reducing burden of hospital administrative requirements. 

Sec. 406. Authority of Federal Trade Commission over certain tax-exempt organizations. 

TITLE V—DIGITAL HEALTH CARE 

Sec. 501. Access of individuals to protected health information. 

Sec. 502. Expansion of coverage of telehealth services. 

Sec. 503. STARK and AKS exemptions. 

Sec. 504. STARK technical penalty. 

1 TITLE I—PRIVATE-SECTOR 

2 HEALTH INSURANCE REFORMS 

3 Subtitle A—Commercial Health 

4 Insurance Provisions 

5 SEC. 101. INVISIBLE HIGH RISK POOL REINSURANCE PRO6 GRAM; TAX ON EXCHANGE PLANS. 

7 (a) ESTABLISHMENT.—Not later than January 1, 

8 2021, the Secretary of Health and Human Services shall 

9 establish the Invisible High Risk Pool Reinsurance Pro10 gram (in this section referred to as the ‘‘IHRPR pro11 gram’’). 


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1 (b) STATE GRANTS.—Under the IHRPR program, 

2 the Secretary shall, from amounts appropriated under 

3 subsection (f) for a fiscal year, award grants to States for 

4 such fiscal year, in amounts determined in accordance 

5 with the allocation methodology specified under subsection 

6 (d). Such grants shall be used for the purpose of estab7 lishing or maintaining a qualifying invisible high risk pool 

8 for the State. 

9 (c) FEDERAL DEFAULT.— 

10 (1) IN GENERAL.—In the case of a State that 

11 does not, by a date and in a manner specified by the 

12 Secretary, choose to be awarded a grant under sub13 section (b) for a fiscal year to operate a qualifying 

14 invisible high risk pool for the State, the Secretary 

15 shall, from amounts appropriated under subsection 

16 (f) for such fiscal year, use the allocation determined 

17 for the State under subsection (d) for participation 

18 of such State in the Federal default qualifying invis19 ible high risk pool described in paragraph (2). 

20 (2) FEDERAL DEFAULT QUALIFYING INVISIBLE

21 HIGH RISK POOL.—The Federal default qualifying 

22 high risk pool is, with respect to each State that 

23 chooses not to be awarded a grant under subsection 

24 (b) with respect to a fiscal year for which funds are 

25 appropriated under subsection (f), an invisible high 


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1 risk pool under which health insurance issuers par2 ticipating in the Exchange of such a State, with re3 spect to designated individuals who are enrolled in 

4 health insurance coverage and are expected to expe5 rience higher than average health costs as deter6 mined by the insurer, cede risk to the pool, without 

7 affecting the premium paid by the designated indi8 viduals or their terms of coverage. With respect to 

9 such pool— 

10 (A) high-risk individuals designated for 

11 cession to the pool shall be designated by the 

12 ceding issuer; 

13 (B) the premium amount the ceding issuer 

14 shall pay to the reinsurance pool shall be 90 

15 percent of the premium paid to the issuer for 

16 the coverage; 

17 (C) the ceding issuer shall retain the same 

18 risk under the ceded policies as under any other 

19 policy of the issuer with respect to the first 

20 $10,000 of benefits for each ceded policy in21 volved and will not retain any risk under ceded 

22 policies after such first $10,000 of benefits; and 

23 (D) after a ceding issuer, with respect to 

24 a ceded policy, no longer retains risk under 

25 such policy pursuant to subparagraph (C), the 


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1 negotiated rate under such policy for items and 

2 services shall be payable at the reimbursement 

3 rate under the Medicare program under title 

4 XVIII of the Social Security Act for such items 

5 and services, or in the case of items and serv6 ices for which payment is available under the 

7 policy but not the Medicare program, at a rate 

8 determined by the Secretary. 

9 (d) ALLOCATION METHODOLOGY.—Not later than 

10 June 30, 2020, the Secretary shall specify an allocation 

11 methodology for determining the amount of funds appro12 priated under subsection (f) for a fiscal year to be allo13 cated for each State for purposes of subsections (b) and 

14 (c). Such methodology shall be based on the number of 

15 residents of each State and the general health status of 

16 such residents. 

17 (e) QUALIFYING INVISIBLE HIGH RISK POOL.—For 

18 purposes of this section, the term ‘‘qualifying invisible 

19 high risk pool’’ means, with respect to a State, a method 

20 of designation under which health insurance issuers iden21 tify individuals who experience higher than average health 

22 costs as determined by the State and are enrolled in health 

23 insurance coverage offered in the individual market, and 

24 cede the risk of spending more than $10,000 on health 

25 care services for a single individual to the pool without 


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1 affecting the premium paid by the designated individuals 

2 or their terms of coverage. With respect to such pool, the 

3 State, or an entity operating the pool on behalf of the 

4 State, shall establish— 

5 (1) the premium amount the ceding issuer shall 

6 pay to the reinsurance pool; 

7 (2) the applicable attachment points or coinsur8 ance percentages if the ceding issuer retains any 

9 portion of the risk under ceded policies, except that 

10 the provisions of subparagraphs (C) and (D) of sub11 section (c)(2) shall apply to such high risk pool in 

12 the same manner as such clauses apply to the Fed13 eral default high risk pool; and 

14 (3) the mechanism by which high-risk individ15 uals are designated for cession to the pool, which 

16 may include a list of designated high-cost health 

17 conditions. 

18 (f) APPROPRIATIONS.—There is appropriated to the 

19 Secretary of Health and Human Services 

20 $200,000,000,000 to carry out this section for the period 

21 of fiscal year 2020 through fiscal year 2029. 

22 (g) TAX ON HEALTH INSURANCE PLANS SOLD ON

23 EXCHANGES.— 


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1 (1) IN GENERAL.—Chapter 34 of the Internal 

2 Revenue Code of 1986 is amended by adding at the 

3 end the following new subchapter: 

4 ‘‘Subchapter C—Additional Tax on Health In5 surance Plans Sold by Insurers Offering 

6 Plans on Exchanges 

‘‘Sec. 4401. Additional tax on health insurance plans sold by insurers offering 

plans on exchanges. 

7 ‘‘SEC. 4401. ADDITIONAL TAX ON HEALTH INSURANCE 

8 PLANS SOLD BY INSURERS OFFERING PLANS 

9 ON EXCHANGES. 

10 ‘‘(a) IMPOSITION OF TAX.—There is imposed a tax 

11 of $4 for each policy month of each health insurance policy 

12 sold by insurers offering plans through an Exchange es13 tablished under the Patient Protection and Affordable 

14 Care Act. 

15 ‘‘(b) LIABILITY.—The tax imposed by subsection (a) 

16 shall be paid by the plan sponsor.’’. 

17 (2) CONFORMING AMENDMENT.—The table of 

18 subchapters for chapter 34 of the Internal Revenue 

19 Code of 1986 is amended by adding at the end the 

20 following item: 

‘‘SUBCHAPTER C—ADDITIONAL TAX ON HEALTH INSURANCE PLANS SOLD BY

INSURERS OFFERING PLANS ON EXCHANGES’’. 

21 (3) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall apply with respect to months 

23 beginning after the date of enactment of this Act. 


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1 SEC. 102. CHANGE IN PERMISSIBLE AGE VARIATION IN 

2 HEALTH INSURANCE PREMIUM RATES. 

3 Section 2701(a)(1)(A)(iii) of the Public Health Serv4 ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)) is amended by in5 serting after ‘‘(consistent with section 2707(c))’’ the fol6 lowing: ‘‘or, for plan years beginning on or after January 

7 1, 2020, as the Secretary may implement through interim 

8 final regulation, 5 to 1 for adults (consistent with section 

9 2707(c))’’. 

10 SEC. 103. EMPLOYER HEALTH INSURANCE MANDATE RE11 PEAL. 

12 (a) IN GENERAL.—Chapter 43 of the Internal Rev13 enue Code of 1986 is amended by striking section 4980H. 

14 (b) REPEAL OF RELATED REPORTING REQUIRE15 MENTS.—Subpart D of part III of subchapter A of chap16 ter 61 of such Code is amended by striking section 6056. 

17 (c) CONFORMING AMENDMENTS.— 

18 (1) Section 6724(d)(1)(B) of such Code is 

19 amended by inserting ‘‘or’’ at the end of clause 

20 (xxiii), by striking ‘‘or’’ at the end of clause (xxiv), 

21 and by striking clause (xxv). 

22 (2) Section 6724(d)(2) of such Code is amend23 ed by inserting ‘‘or’’ at the end of subparagraph 

24 (GG) and by striking subparagraph (HH). 


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1 (3) The table of sections for chapter 43 of such 

2 Code is amended by striking the item relating to sec3 tion 4980H. 

4 (4) The table of sections for subpart D of part 

5 III of subchapter A of chapter 61 of such Code is 

6 amended by striking the item relating to section 

7 6056. 

8 (5) Section 1513 of the Patient Protection and 

9 Affordable Care Act is amended by striking sub10 section (c). 

11 (d) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as otherwise pro13 vided in this subsection, the amendments made by 

14 this section shall apply to months and other periods 

15 beginning after December 31, 2020. 

16 (2) REPEAL OF STUDY AND REPORT.—The 

17 amendment made by subsection (c)(5) shall take ef18 fect on the date of the enactment of this Act. 

19 SEC. 104. EMPLOYER BENEFITS REPORTS. 

20 (a) IN GENERAL.—Subject to subsection (b), for each 

21 plan year beginning on or after January 1, 2021, a group 

22 health plan and a health insurance issuer offering group 

23 health insurance coverage shall provide to each individual 

24 enrolled in such plan or such coverage for such plan year 

25 a notification containing the following: 


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1 (1) The amount the sponsor of such group 

2 health plan expended with respect to such individual 

3 under such plan for such plan year (or, in the case 

4 of a health insurance issuer offering group health in5 surance coverage, the amount the employer of such 

6 individual contributed for such coverage for such in7 dividual for such plan year). 

8 (2) The amount the sponsor of such group 

9 health plan expended with respect to such individual 

10 under such plan for each previous plan year (or, in 

11 the case of a health insurance issuer offering group 

12 health insurance coverage, the amount the employer 

13 of such individual contributed for such coverage for 

14 such individual for each previous plan year), if appli15 cable. 

16 (b) LIMITATION.—Subsection (a) shall not apply to 

17 a group health plan, or a health insurance issuer offering 

18 group health insurance coverage, for a plan year if, for 

19 such plan year, the number of individuals enrolled under 

20 such plan or such coverage was less than 100. 

21 (c) PENALTY.—In the case that the Secretary of 

22 Health and Human Services determines that a group 

23 health plan or a health insurance issuer offering group 

24 health insurance failed to provide the notice required 

25 under subsection (a), the Secretary may impose a civil 


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1 monetary penalty on the sponsor of such plan or such 

2 issuer, as applicable, in an amount not to exceed $100 

3 per individual enrolled in such plan or such coverage per 

4 day that such sponsor or issuer failed to provide such noti5 fication to such individual. 

6 (d) DEFINITIONS.—In this section, the terms ‘‘group 

7 health plan’’, ‘‘group health insurance coverage’’, ‘‘health 

8 insurance issuer’’, and ‘‘sponsor’’ have the meaning given 

9 such terms in section 2791 of the Public Health Service 

10 Act (42 U.S.C. 300gg–91). 

11 SEC. 105. WAIVERS FOR STATE INNOVATION. 

12 (a) STREAMLINING THE STATE APPLICATION PROC13 ESS.—Section 1332 of the Patient Protection and Afford14 able Care Act (42 U.S.C. 18052) is amended— 

15 (1) in subsection (a)(1)(C), by striking ‘‘the 

16 law’’ and inserting ‘‘a law or has in effect a certifi17 cation’’; and 

18 (2) in subsection (b)(2)— 

19 (A) in the paragraph heading, by inserting 

20 ‘‘OR CERTIFY’’ after ‘‘LAW’’; 

21 (B) in subparagraph (A)— 

22 (i) by striking ‘‘A law’’ and inserting 

23 the following: 

24 ‘‘(i) LAWS.—A law’’; and 


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1 (ii) by adding at the end the fol2 lowing: 

3 ‘‘(ii) CERTIFICATIONS.—A certifi4 cation described in this paragraph is a doc5 ument, signed by the Governor of the 

6 State, that certifies that such Governor 

7 has the authority under existing Federal 

8 and State law to take action under this 

9 section, including implementation of the 

10 State plan under subsection (a)(1)(B).’’; 

11 and 

12 (C) in subparagraph (B)— 

13 (i) in the subparagraph heading, by 

14 striking ‘‘OF OPT OUT’’; and 

15 (ii) by striking ‘‘may repeal a law’’ 

16 and all that follows through the period at 

17 the end and inserting the following: ‘‘may 

18 terminate the authority provided under the 

19 waiver with respect to the State by— 

20 ‘‘(i) repealing a law described in sub21 paragraph (A)(i); or 

22 ‘‘(ii) terminating a certification de23 scribed in subparagraph (A)(ii), through a 

24 certification for such termination signed by 

25 the Governor of the State.’’. 


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1 (b) PROVIDING EXPEDITED APPROVAL OF STATE

2 WAIVERS.—Section 1332(d) of the Patient Protection and 

3 Affordable Care Act (42 U.S.C. 18052(d)) is amended— 

4 (1) in paragraph (1) by striking ‘‘180’’ and in5 serting ‘‘90’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(3) EXPEDITED DETERMINATION.— 

8 ‘‘(A) IN GENERAL.—With respect to any 

9 application under subsection (a)(1) submitted 

10 on or after the date of this paragraph or any 

11 such application submitted prior to such date of 

12 enactment and under review by the Secretary 

13 on such date of enactment, the Secretary shall 

14 make a determination on such application, 

15 using the criteria for approval otherwise appli16 cable under this section, not later than 45 days 

17 after the receipt of such application, and shall 

18 allow the public notice and comment at the 

19 State and Federal levels described under sub20 section (a)(4) to occur concurrently if such 

21 State application— 

22 ‘‘(i) is submitted in response to an ur23 gent situation, with respect to areas in the 

24 State that the Secretary determines are at 

25 risk for excessive premium increases or 


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1 having no health plans offered in the appli2 cable health insurance market for the cur3 rent or following plan year; or 

4 ‘‘(ii) is for a waiver that is the same 

5 or substantially similar to a waiver that 

6 the Secretary already has approved for an7 other State. 

8 ‘‘(B) APPROVAL.— 

9 ‘‘(i) URGENT SITUATIONS.— 

10 ‘‘(I) PROVISIONAL APPROVAL.—A 

11 waiver approved under the expedited 

12 determination process under subpara13 graph (A)(i) shall be in effect for a 

14 period of 3 years, unless the State re15 quests a shorter duration. 

16 ‘‘(II) FULL APPROVAL.—Subject 

17 to the requirements for approval oth18 erwise applicable under this section, 

19 not later than 1 year before the expi20 ration of a provisional waiver period 

21 described in subclause (I) with respect 

22 to an application described in sub23 paragraph (A)(i), the Secretary shall 

24 make a determination on whether to 

25 extend the approval of such waiver for 


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1 the full term of the waiver requested 

2 by the State, for a total approval pe3 riod not to exceed 6 years. The Sec4 retary may request additional infor5 mation as the Secretary determines 

6 appropriate to make such determina7 tion. 

8 ‘‘(ii) APPROVAL OF SAME OR SIMILAR

9 APPLICATIONS.—An approval of a waiver 

10 under subparagraph (A)(ii) shall be subject 

11 to the terms of subsection (e). 

12 ‘‘(C) GAO STUDY.—Not later than 5 years 

13 after the date of enactment of this paragraph, 

14 the Comptroller General of the United States 

15 shall conduct a review of all waivers approved 

16 pursuant to an application under subparagraph 

17 (A)(ii) to evaluate whether such waivers met 

18 the requirements of subsection (b)(1) and 

19 whether the applications should have qualified 

20 for such expedited process.’’. 

21 (c) PROVIDING CERTAINTY FOR STATE-BASED RE22 FORMS.—Section 1332(e) of the Patient Protection and 

23 Affordable Care Act (42 U.S.C. 18052(e)) is amended by 

24 striking ‘‘No waiver’’ and all that follows through the peVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 riod at the end and inserting the following: ‘‘A waiver 

2 under this section— 

3 ‘‘(1) shall be in effect for a period of 6 years 

4 unless the State requests a shorter duration; 

5 ‘‘(2) may be renewed, subject to the State meet6 ing the criteria for approval otherwise applicable 

7 under this section, for unlimited additional 6-year 

8 periods upon application by the State; and 

9 ‘‘(3) may not be suspended or terminated, in 

10 whole or in part, by the Secretary at any time before 

11 the date of expiration of the waiver period (including 

12 any renewal period under paragraph (2)), unless the 

13 Secretary determines that the State materially failed 

14 to comply with the terms and conditions of the waiv15 er.’’. 

16 (d) ENSURING PATIENT ACCESS TO MORE FLEXIBLE

17 HEALTH PLANS.—Section 1332(b)(1)(B) of the Patient 

18 Protection and Affordable Care Act (42 U.S.C. 

19 18052(b)(1)(B)) is amended by striking ‘‘at least as af20 fordable’’ and inserting ‘‘of comparable affordability, in21 cluding for low-income individuals, individuals with serious 

22 health needs, and other vulnerable populations,’’. 

23 (e) APPLICABILITY.—The amendments made by this 

24 Act to section 1332 of the Patient Protection and Afford25 able Care Act (42 U.S.C. 18052)— 


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1 (1) with respect to applications for waivers 

2 under such section 1332 submitted after the date of 

3 enactment of this Act and applications for such 

4 waivers submitted prior to such date of enactment 

5 and under review by the Secretary on the date of en6 actment, shall take effect on the date of enactment 

7 of this Act; and 

8 (2) with respect to applications for waivers ap9 proved under such section 1332 before the date of 

10 enactment of this Act, shall not require reconsider11 ation of whether such applications meet the require12 ments of such section 1332, except that, at the re13 quest of a State, the Secretary shall recalculate the 

14 amount of funding provided under subsection (a)(3) 

15 of such section. 

16 SEC. 106. STATE-OPERATED EXCHANGES FLEXIBILITY FOR 

17 OPEN ENROLLMENT PERIODS. 

18 Section 1311(c) of the Patient Protection and Afford19 able Care Act (42 U.S.C. 18031(c)) is amended— 

20 (1) in paragraph (6), by striking ‘‘The Sec21 retary’’ and inserting ‘‘Subject to paragraph (7), the 

22 Secretary’’; and 

23 (2) by adding at the end the following new 

24 paragraph: 


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1 ‘‘(7) FLEXIBILITY FOR ENROLLMENT PERI2 ODS.— 

3 ‘‘(A) STATE-OPERATED EXCHANGES OPEN

4 ENROLLMENT PERIODS.—In the case of an Ex5 change operated by a State, beginning with 

6 plan year 2021, the Exchange may provide for 

7 open enrollment periods (after the initial enroll8 ment period) every 12, 24, or 36 months, as de9 termined by the State.’’. 

10 SEC. 107. ENROLLMENT PERIODS. 

11 (a) EXCHANGES.—Paragraph (7) of section 1311(c) 

12 of the Patient Protection and Affordable Care Act (42 

13 U.S.C. 18031(c)), as added by section 106, is amended 

14 by adding at the end the following new subparagraph: 

15 ‘‘(B) ENROLLMENTS OTHER THAN DURING

16 INITIAL, OPEN, AND SPECIAL ENROLLMENT PE17 RIODS.—Beginning with plan year 2021, an Ex18 change may provide for enrollments during pe19 riod in addition to open enrollment periods de20 scribed in subparagraph (A) or paragraph (6) 

21 and special enrollment periods described in 

22 paragraph (6).’’. 

23 (b) HEALTH PLANS.—Subpart I of part A of title 

24 XXVII of the Public Health Service Act is amended by 

25 adding at the end the following new section: 


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1 ‘‘SEC. 2710. ENROLLMENT OUTSIDE OF INITIAL, OPEN, AND 

2 SPECIAL ENROLLMENT PERIOD. 

3 ‘‘Beginning with plan year 2021, a group health plan 

4 and a health insurance issuer offering group or individual 

5 health insurance coverage may provide for enrollment in 

6 such plan or coverage during periods in addition to initial, 

7 open, or special enrollment periods. In the case that an 

8 individual enrolls in such plan or coverage during a period 

9 pursuant to the previous sentence, the plan or issuer may 

10 charge the individual a one-time enrollment fee.’’. 

11 SEC. 108. SHORT-TERM LIMITED DURATION INSURANCE. 

12 (a) DEFINITION.—Section 2791(b) of the Public 

13 Health Service Act (42 U.S.C. 300gg–91(b)) is amended 

14 by adding at the end the following: 

15 ‘‘(6) SHORT-TERM LIMITED DURATION INSUR16 ANCE.—The term ‘short-term limited duration insur17 ance’ means health insurance coverage provided pur18 suant to a contract with a health insurance issuer 

19 that has an expiration date specified in the contract 

20 (not taking into account any extensions that may be 

21 elected by the policyholder with or without the 

22 issuer’s consent) that is less than 12 months after 

23 the original effective date of the contract.’’. 

24 (b) GUARANTEED RENEWABILITY.—Section 2703 of 

25 the Public Health Service Act (42 U.S.C. 300gg–2) is 

26 amended— 


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1 (1) in subsection (a), by inserting ‘‘or offers 

2 short-term limited duration insurance’’ after ‘‘group 

3 market’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(f) APPLICATION TO SHORT-TERM LIMITED DURA6 TION INSURANCE.— 

7 ‘‘(1) IN GENERAL.—In applying this section in 

8 the case of short-term limited duration insurance— 

9 ‘‘(A) a reference to ‘health insurance cov10 erage’ with respect to such coverage offered in 

11 the individual market shall be deemed to in12 clude short-term limited duration insurance; 

13 and 

14 ‘‘(B) a reference to ‘health insurance 

15 issuer’ with respect to health insurance cov16 erage offered in the individual market shall be 

17 deemed to include an issuer of short-term lim18 ited duration insurance. 

19 ‘‘(2) SPECIAL RULE FOR SHORT-TERM LIMITED

20 DURATION INSURANCE.—In the case of short-term 

21 limited duration insurance, at the time of application 

22 for enrollment in such insurance coverage, an issuer 

23 of such insurance may offer renewability of such 

24 coverage, and an individual may decline renewability 

25 of such coverage in accordance with this section, and 


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1 the contract between such individual and the health 

2 insurance issuer shall specify whether the individual 

3 opted for renewability or no renewability.’’. 

4 (c) APPLICABILITY.—The amendments made by sub5 sections (a) and (b) shall apply with respect to contracts 

6 for short-term limited duration insurance that take effect 

7 on or after January 1, 2020. 

8 SEC. 109. PROMOTING HEALTH PLANS THAT COVER INDI9 VIDUALS IN MORE THAN ONE STATE. 

10 There are appropriated, out of amounts in the Treas11 ury not otherwise appropriated, $10,000,000 to be made 

12 available by December 31, 2020, to the Center for Medi13 care & Medicaid Innovation to fund new research or pilot 

14 programs dedicated to pursuing viable methods of enroll15 ing individuals in health insurance programs that cross 

16 State lines. 

17 SEC. 110. RESTORING THE APPLICATION OF ANTITRUST 

18 LAWS TO THE BUSINESS OF HEALTH INSUR19 ANCE. 

20 (a) AMENDMENT TO MCCARRAN-FERGUSON ACT.— 

21 Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), 

22 commonly known as the McCarran-Ferguson Act, is 

23 amended by adding at the end the following: 

24 ‘‘(c)(1) Nothing contained in this Act shall modify, 

25 impair, or supersede the operation of any of the antitrust 


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1 laws with respect to the business of health insurance (in2 cluding the business of dental insurance and limited-scope 

3 dental benefits). 

4 ‘‘(2) Paragraph (1) shall not apply with respect to 

5 making a contract, or engaging in a combination or con6 spiracy— 

7 ‘‘(A) to collect, compile, or disseminate histor8 ical loss data; 

9 ‘‘(B) to determine a loss development factor ap10 plicable to historical loss data; 

11 ‘‘(C) to perform actuarial services if such con12 tract, combination, or conspiracy does not involve a 

13 restraint of trade; or 

14 ‘‘(D) to develop or disseminate a standard in15 surance policy form (including a standard addendum 

16 to an insurance policy form and standard termi17 nology in an insurance policy form) if such contract, 

18 combination, or conspiracy is not to adhere to such 

19 standard form or require adherence to such standard 

20 form. 

21 ‘‘(3) For purposes of this subsection— 

22 ‘‘(A) the term ‘antitrust laws’ has the meaning 

23 given it in subsection (a) of the first section of the 

24 Clayton Act (15 U.S.C. 12), except that such term 

25 includes section 5 of the Federal Trade Commission 


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1 Act (15 U.S.C. 45) to the extent that such section 

2 5 applies to unfair methods of competition; 

3 ‘‘(B) the term ‘business of health insurance (in4 cluding the business of dental insurance and limited5 scope dental benefits)’ does not include— 

6 ‘‘(i) the business of life insurance (includ7 ing annuities); or 

8 ‘‘(ii) the business of property or casualty 

9 insurance, including but not limited to— 

10 ‘‘(I) any insurance or benefits defined 

11 as ‘excepted benefits’ under paragraph (1), 

12 subparagraph (B) or (C) of paragraph (2), 

13 or paragraph (3) of section 9832(c) of the 

14 Internal Revenue Code of 1986 (26 U.S.C. 

15 9832(c)) whether offered separately or in 

16 combination with insurance or benefits de17 scribed in paragraph (2)(A) of such sec18 tion; and 

19 ‘‘(II) any other line of insurance that 

20 is classified as property or casualty insur21 ance under State law; 

22 ‘‘(C) the term ‘historical loss data’ means infor23 mation respecting claims paid, or reserves held for 

24 claims reported, by any person engaged in the busi25 ness of insurance; and 


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1 ‘‘(D) the term ‘loss development factor’ means 

2 an adjustment to be made to reserves held for losses 

3 incurred for claims reported by any person engaged 

4 in the business of insurance, for the purpose of 

5 bringing such reserves to an ultimate paid basis.’’. 

6 (b) RELATED PROVISION.—For purposes of section 

7 5 of the Federal Trade Commission Act (15 U.S.C. 45) 

8 to the extent such section applies to unfair methods of 

9 competition, section 3(c) of the McCarran-Ferguson Act 

10 shall apply with respect to the business of health insurance 

11 without regard to whether such business is carried on for 

12 profit, notwithstanding the definition of ‘‘Corporation’’ 

13 contained in section 4 of the Federal Trade Commission 

14 Act. 

15 SEC. 111. HEALTH PLANS CREATED UNDER PPACA OR OF16 FERED THROUGH EXCHANGES TO BE ONLY 

17 HEALTH PLANS FEDERAL GOVERNMENT MAY 

18 MAKE AVAILABLE TO PRESIDENT, VICE 

19 PRESIDENT, MEMBERS OF CONGRESS, AND 

20 FEDERAL EMPLOYEES. 

21 Section 1312(d)(3)(D) of the Patient Protection and 

22 Affordable Care Act (42 U.S.C. 18032(d)(3)(D)) is 

23 amended— 

24 (1) in the subparagraph heading, by striking 

25 ‘‘MEMBERS OF CONGRESS’’ and inserting ‘‘PRESIVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 DENT, VICE PRESIDENT, MEMBERS OF CONGRESS, 

2 AND FEDERAL EMPLOYEES’’; 

3 (2) in clause (i), in the matter preceding sub4 clause (I)— 

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

6 congressional staff’’ and inserting ‘‘the Presi7 dent, Vice President, Members of Congress, and 

8 Federal employees’’; and 

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

10 congressional staff’’ and inserting ‘‘the Presi11 dent, the Vice President, a Member of Con12 gress, or a Federal employee’’; and 

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

14 read as follows: 

15 ‘‘(II) FEDERAL EMPLOYEE.—The 

16 term ‘Federal employee’ means— 

17 ‘‘(aa) an ‘employee’, as such 

18 term is defined in section 2105 of 

19 title 5, United States Code; and 

20 ‘‘(bb) includes an individual 

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

22 such section 2105 pertains 

23 (whether or not such individual 

24 satisfies item (aa)).’’. 


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1 SEC. 112. COST-SHARING REDUCTIONS. 

2 (a) COST-SHARING REDUCTION PAYMENTS.—Section 

3 1402 of the Patient Protection and Affordable Care Act 

4 (42 U.S.C. 18071) is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(g) FUNDING.— 

7 ‘‘(1) APPROPRIATIONS.—There is appropriated, 

8 from any money in the Treasury not otherwise ap9 propriated, such sums as may be necessary to, sub10 ject to paragraph (2), provide health benefits cov11 erage through payment to issuers (under this section 

12 or through advance payment by the Secretary of the 

13 Treasury under section 1412(c)(3)) of the amounts 

14 computed under this section for each of plan years 

15 2019 through 2022. 

16 ‘‘(2) ADJUSTMENTS.—Notwithstanding any 

17 other provision of law, payments and other actions 

18 for adjustments to obligations incurred prior to De19 cember 31, 2020, may be made through December 

20 31, 2021. 

21 ‘‘(3) LIMITATION.—Amounts appropriated 

22 under paragraph (1) for each of plan years 2019 

23 through 2022 are subject to the requirements and 

24 limitations under sections 506 and 507 of division H 

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


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1 the same extent as if such amounts for each such 

2 year were appropriated under such division.’’. 

3 (b) ELECTION.—In the case of an election under this 

4 subsection by a State and a certification by the Secretary 

5 of Health and Human Services that such election will not 

6 result in an increase in Federal expenditures, in lieu of 

7 the amounts that would be paid to health insurance 

8 issuers in such State under section 1402 of the Patient 

9 Protection and Affordable Care Act, the Secretary may 

10 pay to such State an amount equal to such amounts. Prior 

11 to such payment, such State shall make such assurances 

12 as the Secretary deems necessary to ensure that such 

13 State shall redistribute such payments to health savings 

14 accounts of individuals— 

15 (1) enrolled in qualified health plans (as defined 

16 in section 36B of the Internal Revenue Code of 

17 1986) offered by such issuers, and 

18 (2) whose income is less than 250 percent of 

19 the Federal poverty line. 

20 SEC. 113. HEALTH SAVINGS ACCOUNTS. 

21 (a) NO HIGH DEDUCTIBLE HEALTH PLANS RE22 QUIRED FOR HEALTH SAVINGS ACCOUNT CONTRIBU23 TIONS.— 

24 (1) IN GENERAL.—Section 223 of the Internal 

25 Revenue Code of 1986 is amended by inserting ‘‘or 


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1 qualified health plan’’ after ‘‘high deductible health 

2 plan’’ each place such term appears. 

3 (2) QUALIFIED HEALTH PLAN DEFINED.—Sec4 tion 223(c) of such Code is amended to read as fol5 lows: 

6 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 

7 section— 

8 ‘‘(1) IN GENERAL.—The term ‘eligible indi9 vidual’ means, with respect to any month, any indi10 vidual if such individual is covered under a qualified 

11 health plan as of the 1st day of such month. 

12 ‘‘(2) QUALIFIED HEALTH PLAN.—The term 

13 ‘qualified health plan’ has the meaning given such 

14 term in section 36B.’’. 

15 (b) PREMIUMS FOR PLANS AS QUALIFIED MEDICAL

16 EXPENSES; TREATMENT OF ABORTIONS.— 

17 (1) IN GENERAL.—Section 223(d)(2)(B) of 

18 such Code is amended to read as follows: 

19 ‘‘(B) ABORTIONS.— 

20 ‘‘(i) PAYMENTS FOR HEALTH INSUR21 ANCE WITH ABORTION COVERAGE.—The 

22 term ‘qualified medical expense’ shall not 

23 include amounts paid for insurance that 

24 includes coverage for abortions. 


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1 ‘‘(ii) PAYMENTS FOR ABORTIONS.— 

2 The term ‘qualified medical expense’ shall 

3 not include amounts paid for an abortion. 

4 ‘‘(iii) EXCEPTION.—Clauses (i) and 

5 (ii) shall not apply to an abortion, or to 

6 coverage for an abortion— 

7 ‘‘(I) if the pregnancy is the result 

8 of an act of rape or incest, or 

9 ‘‘(II) in the case where a woman 

10 suffers from a physical disorder, phys11 ical injury, or physical illness that 

12 would, as certified by a physician, 

13 place the woman in danger of death 

14 unless an abortion is performed, in15 cluding a life-endangering physical 

16 condition caused by or arising from 

17 the pregnancy itself.’’. 

18 (2) CONFORMING AMENDMENT.—Subsection 

19 223(d)(2) is amended by striking subparagraph (C). 

20 SEC. 114. ADDING COPPER PLANS TO EXCHANGES. 

21 (a) IN GENERAL.—Section 1302 of the Patient Pro22 tection and Affordable Care Act (42 U.S.C. 18022) is 

23 amended— 

24 (1) in subsection (a)(3), by inserting ‘‘copper,’’ 

25 after ‘‘either the’’; 


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1 (2) in subsection (c), by adding at the end the 

2 following new paragraph: 

3 ‘‘(5) SPECIAL RULE FOR COPPER PLANS.—A 

4 health plan in the copper level of coverage (as de5 scribed in subsection (d)(1)(E)) shall be deemed to 

6 meet the requirements of this subsection.’’; 

7 (3) in subsection (d)— 

8 (A) in paragraph (1), by adding at the end 

9 the following new subparagraph: 

10 ‘‘(E) COPPER LEVEL.—A plan in the cop11 per level shall provide a level of coverage that 

12 is designed to provide benefits that are actuari13 ally equivalent to 50 percent of the full actu14 arial value of the benefits provided under the 

15 plan.’’; and 

16 (B) in paragraph (4)— 

17 (i) by inserting ‘‘copper,’’ after ‘‘any 

18 reference to a’’; and 

19 (ii) by inserting ‘‘copper,’’ after ‘‘pro20 viding a’’; and 

21 (4) in subsection (e)(1), by inserting ‘‘copper,’’ 

22 after ‘‘not providing a’’. 

23 (b) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply with respect to plan years begin25 ning on or after January 1, 2020. 


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1 SEC. 115. ELIMINATING FEHBP ELIGIBILITY FOR ANNU2 ITANTS. 

3 Section 8905(b) of title 5, United States Code, is 

4 amended— 

5 (1) in the matter preceding paragraph (1), by 

6 striking ‘‘An’’ and inserting ‘‘Consistent with the 

7 last sentence of this subsection, an’’; and 

8 (2) by adding at the end the following: ‘‘. An 

9 individual who is entitled to benefits under part A 

10 of title XVIII of the Social Security Act (42 U.S.C. 

11 1395c et seq.) by reason of section 226 or 226A of 

12 such Act (42 U.S.C. 426, 426–1), or otherwise eligi13 ble to enroll under such part pursuant to section 

14 1818 or 1818A of such Act (42 U.S.C. 1395i–2, 

15 1395i–2a), and who first becomes an annuitant after 

16 the date of enactment of this sentence may not con17 tinue enrollment in any health benefits plan under 

18 this chapter.’’. 

19 Subtitle B—Association Health 

20 Plans 

21 SEC. 121. RULES GOVERNING ASSOCIATION HEALTH 

22 PLANS. 

23 (a) IN GENERAL.—Subtitle B of title I of the Em24 ployee Retirement Income Security Act of 1974 is amend25 ed by adding after part 7 the following new part: 


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1 ‘‘PART 8—RULES GOVERNING ASSOCIATION 

2 HEALTH PLANS 

3 ‘‘SEC. 801. ASSOCIATION HEALTH PLANS. 

4 ‘‘(a) IN GENERAL.—For purposes of this part, the 

5 term ‘association health plan’ means a group health plan 

6 whose sponsor is (or is deemed under this part to be) de7 scribed in subsection (b). 

8 ‘‘(b) SPONSORSHIP.—The sponsor of a group health 

9 plan is described in this subsection if such sponsor— 

10 ‘‘(1) is organized and maintained in good faith, 

11 with a constitution and bylaws specifically stating its 

12 purpose and providing for periodic meetings on at 

13 least an annual basis, as a bona fide trade associa14 tion, a bona fide industry association (including a 

15 rural electric cooperative association or a rural tele16 phone cooperative association), a bona fide profes17 sional association, or a bona fide chamber of com18 merce (or similar bona fide business association, in19 cluding a corporation or similar organization that 

20 operates on a cooperative basis (within the meaning 

21 of section 1381 of the Internal Revenue Code of 

22 1986)), for substantial purposes other than that of 

23 obtaining or providing medical care; 

24 ‘‘(2) is established as a permanent entity which 

25 receives the active support of its members and re26 quires for membership payment on a periodic basis 


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1 of dues or payments necessary to maintain eligibility 

2 for membership in the sponsor; and 

3 ‘‘(3) does not condition membership, such dues 

4 or payments, or coverage under the plan on the 

5 basis of health status-related factors with respect to 

6 the employees of its members (or affiliated mem7 bers), or the dependents of such employees, and does 

8 not condition such dues or payments on the basis of 

9 group health plan participation. 

10 Any sponsor consisting of an association of entities which 

11 meet the requirements of paragraphs (1), (2), and (3) 

12 shall be deemed to be a sponsor described in this sub13 section. 

14 ‘‘SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH 

15 PLANS. 

16 ‘‘(a) IN GENERAL.—The applicable authority shall 

17 prescribe by regulation a procedure under which, subject 

18 to subsection (b), the applicable authority shall certify as19 sociation health plans which apply for certification as 

20 meeting the requirements of this part. 

21 ‘‘(b) STANDARDS.—Under the procedure prescribed 

22 pursuant to subsection (a), in the case of an association 

23 health plan that provides at least one benefit option which 

24 does not consist of health insurance coverage, the applica25 ble authority shall certify such plan as meeting the reVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 quirements of this part only if the applicable authority is 

2 satisfied that the applicable requirements of this part are 

3 met (or, upon the date on which the plan is to commence 

4 operations, will be met) with respect to the plan. 

5 ‘‘(c) REQUIREMENTS APPLICABLE TO CERTIFIED

6 PLANS.—An association health plan with respect to which 

7 certification under this part is in effect shall meet the ap8 plicable requirements of this part, effective on the date 

9 of certification (or, if later, on the date on which the plan 

10 is to commence operations). 

11 ‘‘(d) REQUIREMENTS FOR CONTINUED CERTIFI12 CATION.—The applicable authority may provide by regula13 tion for continued certification of association health plans 

14 under this part. 

15 ‘‘(e) CLASS CERTIFICATION FOR FULLY INSURED

16 PLANS.—The applicable authority shall establish a class 

17 certification procedure for association health plans under 

18 which all benefits consist of health insurance coverage. 

19 Under such procedure, the applicable authority shall pro20 vide for the granting of certification under this part to 

21 the plans in each class of such association health plans 

22 upon appropriate filing under such procedure in connec23 tion with plans in such class and payment of the pre24 scribed fee under section 807(a). 


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1 ‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION

2 HEALTH PLANS.—An association health plan which offers 

3 one or more benefit options which do not consist of health 

4 insurance coverage may be certified under this part only 

5 if such plan consists of any of the following: 

6 ‘‘(1) A plan which offered such coverage on the 

7 date of the enactment of this section. 

8 ‘‘(2) A plan under which the sponsor does not 

9 restrict membership to one or more trades and busi10 nesses or industries and whose eligible participating 

11 employers represent a broad cross-section of trades 

12 and businesses or industries. 

13 ‘‘(3) A plan whose eligible participating employ14 ers represent one or more trades or businesses, or 

15 one or more industries, consisting of any of the fol16 lowing: agriculture; equipment and automobile deal17 erships; barbering and cosmetology; certified public 

18 accounting practices; child care; construction; dance, 

19 theatrical and orchestra productions; disinfecting 

20 and pest control; financial services; fishing; food 

21 service establishments; hospitals; labor organiza22 tions; logging; manufacturing (metals); mining; med23 ical and dental practices; medical laboratories; pro24 fessional consulting services; sanitary services; trans25 portation (local and freight); warehousing; wholeVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 saling/distributing; or any other trade or business or 

2 industry which has been indicated as having average 

3 or above-average risk or health claims experience by 

4 reason of State rate filings, denials of coverage, pro5 posed premium rate levels, or other means dem6 onstrated by such plan in accordance with regula7 tions. 

8 ‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 

9 BOARDS OF TRUSTEES. 

10 ‘‘(a) SPONSOR.—The requirements of this subsection 

11 are met with respect to an association health plan if the 

12 sponsor has met (or is deemed under this part to have 

13 met) the requirements of section 801(b) for a continuous 

14 period of not less than 3 years ending with the date of 

15 the application for certification under this part. 

16 ‘‘(b) BOARD OF TRUSTEES.—The requirements of 

17 this subsection are met with respect to an association 

18 health plan if the following requirements are met: 

19 ‘‘(1) FISCAL CONTROL.—The plan is operated, 

20 pursuant to a trust agreement, by a board of trust21 ees which has complete fiscal control over the plan 

22 and which is responsible for all operations of the 

23 plan. 

24 ‘‘(2) RULES OF OPERATION AND FINANCIAL

25 CONTROLS.—The board of trustees has in effect 


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1 rules of operation and financial controls, based on a 

2 3-year plan of operation, adequate to carry out the 

3 terms of the plan and to meet all requirements of 

4 this title applicable to the plan. 

5 ‘‘(3) RULES GOVERNING RELATIONSHIP TO

6 PARTICIPATING EMPLOYERS AND TO CONTRAC7 TORS.— 

8 ‘‘(A) BOARD MEMBERSHIP.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clauses (ii) and (iii), the members 

11 of the board of trustees are individuals se12 lected from individuals who are the owners, 

13 officers, directors, or employees of the par14 ticipating employers or who are partners in 

15 the participating employers and actively 

16 participate in the business. 

17 ‘‘(ii) LIMITATION.— 

18 ‘‘(I) GENERAL RULE.—Except as 

19 provided in subclauses (II) and (III), 

20 no such member is an owner, officer, 

21 director, or employee of, or partner in, 

22 a contract administrator or other 

23 service provider to the plan. 

24 ‘‘(II) LIMITED EXCEPTION FOR

25 PROVIDERS OF SERVICES SOLELY ON


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1 BEHALF OF THE SPONSOR.—Officers 

2 or employees of a sponsor which is a 

3 service provider (other than a contract 

4 administrator) to the plan may be 

5 members of the board if they con6 stitute not more than 25 percent of 

7 the membership of the board and they 

8 do not provide services to the plan 

9 other than on behalf of the sponsor. 

10 ‘‘(III) TREATMENT OF PRO11 VIDERS OF MEDICAL CARE.—In the 

12 case of a sponsor which is an associa13 tion whose membership consists pri14 marily of providers of medical care, 

15 subclause (I) shall not apply in the 

16 case of any service provider described 

17 in subclause (I) who is a provider of 

18 medical care under the plan. 

19 ‘‘(iii) CERTAIN PLANS EXCLUDED.— 

20 Clause (i) shall not apply to an association 

21 health plan which is in existence on the 

22 date of the enactment of this section. 

23 ‘‘(B) SOLE AUTHORITY.—The board has 

24 sole authority under the plan to approve appli25 cations for participation in the plan and to conVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 tract with a service provider to administer the 

2 day-to-day affairs of the plan. 

3 ‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In 

4 the case of a group health plan which is established and 

5 maintained by a franchiser for a franchise network con6 sisting of its franchisees— 

7 ‘‘(1) the requirements of subsection (a) and sec8 tion 801(a) shall be deemed met if such require9 ments would otherwise be met if the franchiser were 

10 deemed to be the sponsor referred to in section 

11 801(b), such network were deemed to be an associa12 tion described in section 801(b), and each franchisee 

13 were deemed to be a member (of the association and 

14 the sponsor) referred to in section 801(b); and 

15 ‘‘(2) the requirements of section 804(a)(1) shall 

16 be deemed met. 

17 The Secretary may by regulation define for purposes of 

18 this subsection the terms ‘franchiser’, ‘franchise network’, 

19 and ‘franchisee’. 

20 ‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE21 MENTS. 

22 ‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 

23 requirements of this subsection are met with respect to 

24 an association health plan if, under the terms of the 

25 plan— 


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1 ‘‘(1) each participating employer must be— 

2 ‘‘(A) a member of the sponsor, 

3 ‘‘(B) the sponsor, or 

4 ‘‘(C) an affiliated member of the sponsor 

5 with respect to which the requirements of sub6 section (b) are met, 

7 except that, in the case of a sponsor which is a pro8 fessional association or other individual-based asso9 ciation, if at least one of the officers, directors, or 

10 employees of an employer, or at least one of the in11 dividuals who are partners in an employer and who 

12 actively participates in the business, is a member or 

13 such an affiliated member of the sponsor, partici14 pating employers may also include such employer; 

15 and 

16 ‘‘(2) all individuals commencing coverage under 

17 the plan after certification under this part must 

18 be— 

19 ‘‘(A) active or retired owners (including 

20 self-employed individuals), officers, directors, or 

21 employees of, or partners in, participating em22 ployers; or 

23 ‘‘(B) the beneficiaries of individuals de24 scribed in subparagraph (A). 


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1 ‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM2 PLOYEES.—In the case of an association health plan in 

3 existence on the date of the enactment of this section, an 

4 affiliated member of the sponsor of the plan may be of5 fered coverage under the plan as a participating employer 

6 only if— 

7 ‘‘(1) the affiliated member was an affiliated 

8 member on the date of certification under this part; 

9 or 

10 ‘‘(2) during the 12-month period preceding the 

11 date of the offering of such coverage, the affiliated 

12 member has not maintained or contributed to a 

13 group health plan with respect to any of its employ14 ees who would otherwise be eligible to participate in 

15 such association health plan. 

16 ‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re17 quirements of this subsection are met with respect to an 

18 association health plan if, under the terms of the plan, 

19 no participating employer may provide health insurance 

20 coverage in the individual market for any employee not 

21 covered under the plan which is similar to the coverage 

22 contemporaneously provided to employees of the employer 

23 under the plan, if such exclusion of the employee from cov24 erage under the plan is based on a health status-related 

25 factor with respect to the employee and such employee 


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1 would, but for such exclusion on such basis, be eligible 

2 for coverage under the plan. 

3 ‘‘(d) PROHIBITION OF DISCRIMINATION AGAINST

4 EMPLOYERS AND EMPLOYEES ELIGIBLE TO PARTICI5 PATE.—The requirements of this subsection are met with 

6 respect to an association health plan if— 

7 ‘‘(1) under the terms of the plan, all employers 

8 meeting the preceding requirements of this section 

9 are eligible to qualify as participating employers for 

10 all geographically available coverage options, unless, 

11 in the case of any such employer, participation or 

12 contribution requirements of the type referred to in 

13 section 2711 of the Public Health Service Act are 

14 not met; 

15 ‘‘(2) upon request, any employer eligible to par16 ticipate is furnished information regarding all cov17 erage options available under the plan; and 

18 ‘‘(3) the applicable requirements of sections 

19 701, 702, and 703 are met with respect to the plan. 

20 ‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN 

21 DOCUMENTS, CONTRIBUTION RATES, AND 

22 BENEFIT OPTIONS. 

23 ‘‘(a) IN GENERAL.—The requirements of this section 

24 are met with respect to an association health plan if the 

25 following requirements are met: 


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1 ‘‘(1) CONTENTS OF GOVERNING INSTRU2 MENTS.—The instruments governing the plan in3 clude a written instrument, meeting the require4 ments of an instrument required under section 

5 402(a)(1), which— 

6 ‘‘(A) provides that the board of trustees 

7 serves as the named fiduciary required for plans 

8 under section 402(a)(1) and serves in the ca9 pacity of a plan administrator (referred to in 

10 section 3(16)(A)); 

11 ‘‘(B) provides that the sponsor of the plan 

12 is to serve as plan sponsor (referred to in sec13 tion 3(16)(B)); and 

14 ‘‘(C) incorporates the requirements of sec15 tion 806. 

16 ‘‘(2) CONTRIBUTION RATES MUST BE NON17 DISCRIMINATORY.— 

18 ‘‘(A) The contribution rates for any par19 ticipating small employer do not vary on the 

20 basis of any health status-related factor in rela21 tion to employees of such employer or their 

22 beneficiaries and do not vary on the basis of the 

23 type of business or industry in which such em24 ployer is engaged. 


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1 ‘‘(B) Nothing in this title or any other pro2 vision of law shall be construed to preclude an 

3 association health plan, or a health insurance 

4 issuer offering health insurance coverage in 

5 connection with an association health plan, 

6 from— 

7 ‘‘(i) setting contribution rates based 

8 on the claims experience of the plan; or 

9 ‘‘(ii) varying contribution rates for 

10 small employers in a State to the extent 

11 that such rates could vary using the same 

12 methodology employed in such State for 

13 regulating premium rates in the small 

14 group market with respect to health insur15 ance coverage offered in connection with 

16 bona fide associations (within the meaning 

17 of section 2791(d)(3) of the Public Health 

18 Service Act), 

19 subject to the requirements of section 702(b) 

20 relating to contribution rates. 

21 ‘‘(3) FLOOR FOR NUMBER OF COVERED INDI22 VIDUALS WITH RESPECT TO CERTAIN PLANS.—If 

23 any benefit option under the plan does not consist 

24 of health insurance coverage, the plan has as of the 


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1 beginning of the plan year not fewer than 1,000 par2 ticipants and beneficiaries. 

3 ‘‘(4) MARKETING REQUIREMENTS.— 

4 ‘‘(A) IN GENERAL.—If a benefit option 

5 which consists of health insurance coverage is 

6 offered under the plan, State-licensed insurance 

7 agents shall be used to distribute to small em8 ployers coverage which does not consist of 

9 health insurance coverage in a manner com10 parable to the manner in which such agents are 

11 used to distribute health insurance coverage. 

12 ‘‘(B) STATE-LICENSED INSURANCE

13 AGENTS.—For purposes of subparagraph (A), 

14 the term ‘State-licensed insurance agents’ 

15 means one or more agents who are licensed in 

16 a State and are subject to the laws of such 

17 State relating to licensure, qualification, test18 ing, examination, and continuing education of 

19 persons authorized to offer, sell, or solicit 

20 health insurance coverage in such State. 

21 ‘‘(5) REGULATORY REQUIREMENTS.—Such 

22 other requirements as the applicable authority deter23 mines are necessary to carry out the purposes of this 

24 part, which shall be prescribed by the applicable au25 thority by regulation. 


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1 ‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO

2 DESIGN BENEFIT OPTIONS.—Subject to section 514(d), 

3 nothing in this part or any provision of State law (as de4 fined in section 514(c)(1)) shall be construed to preclude 

5 an association health plan, or a health insurance issuer 

6 offering health insurance coverage in connection with an 

7 association health plan, from exercising its sole discretion 

8 in selecting the specific items and services consisting of 

9 medical care to be included as benefits under such plan 

10 or coverage, except (subject to section 514) in the case 

11 of (1) any law to the extent that it is not preempted under 

12 section 731(a)(1) with respect to matters governed by sec13 tion 711, 712, or 713, or (2) any law of the State with 

14 which filing and approval of a policy type offered by the 

15 plan was initially obtained to the extent that such law pro16 hibits an exclusion of a specific disease from such cov17 erage. 

18 ‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS 

19 FOR SOLVENCY FOR PLANS PROVIDING 

20 HEALTH BENEFITS IN ADDITION TO HEALTH 

21 INSURANCE COVERAGE. 

22 ‘‘(a) IN GENERAL.—The requirements of this section 

23 are met with respect to an association health plan if— 

24 ‘‘(1) the benefits under the plan consist solely 

25 of health insurance coverage; or 


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1 ‘‘(2) if the plan provides any additional benefit 

2 options which do not consist of health insurance cov3 erage, the plan— 

4 ‘‘(A) establishes and maintains reserves 

5 with respect to such additional benefit options, 

6 in amounts recommended by the qualified actu7 ary, consisting of— 

8 ‘‘(i) a reserve sufficient for unearned 

9 contributions; 

10 ‘‘(ii) a reserve sufficient for benefit li11 abilities which have been incurred, which 

12 have not been satisfied, and for which risk 

13 of loss has not yet been transferred, and 

14 for expected administrative costs with re15 spect to such benefit liabilities; 

16 ‘‘(iii) a reserve sufficient for any other 

17 obligations of the plan; and 

18 ‘‘(iv) a reserve sufficient for a margin 

19 of error and other fluctuations, taking into 

20 account the specific circumstances of the 

21 plan; and 

22 ‘‘(B) establishes and maintains aggregate 

23 and specific excess/stop loss insurance and sol24 vency indemnification, with respect to such adVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 ditional benefit options for which risk of loss 

2 has not yet been transferred, as follows: 

3 ‘‘(i) The plan shall secure aggregate 

4 excess/stop loss insurance for the plan with 

5 an attachment point which is not greater 

6 than 125 percent of expected gross annual 

7 claims. The applicable authority may by 

8 regulation provide for upward adjustments 

9 in the amount of such percentage in speci10 fied circumstances in which the plan spe11 cifically provides for and maintains re12 serves in excess of the amounts required 

13 under subparagraph (A). 

14 ‘‘(ii) The plan shall secure specific ex15 cess/stop loss insurance for the plan with 

16 an attachment point which is at least equal 

17 to an amount recommended by the plan’s 

18 qualified actuary. The applicable authority 

19 may by regulation provide for adjustments 

20 in the amount of such insurance in speci21 fied circumstances in which the plan spe22 cifically provides for and maintains re23 serves in excess of the amounts required 

24 under subparagraph (A). 


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1 ‘‘(iii) The plan shall secure indem2 nification insurance for any claims which 

3 the plan is unable to satisfy by reason of 

4 a plan termination. 

5 Any person issuing to a plan insurance described in clause 

6 (i), (ii), or (iii) of subparagraph (B) shall notify the Sec7 retary of any failure of premium payment meriting can8 cellation of the policy prior to undertaking such a cancella9 tion. Any regulations prescribed by the applicable author10 ity pursuant to clause (i) or (ii) of subparagraph (B) may 

11 allow for such adjustments in the required levels of excess/ 

12 stop loss insurance as the qualified actuary may rec13 ommend, taking into account the specific circumstances 

14 of the plan. 

15 ‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS

16 RESERVES.—In the case of any association health plan de17 scribed in subsection (a)(2), the requirements of this sub18 section are met if the plan establishes and maintains sur19 plus in an amount at least equal to— 

20 ‘‘(1) $500,000, or 

21 ‘‘(2) such greater amount (but not greater than 

22 $2,000,000) as may be set forth in regulations pre23 scribed by the applicable authority, considering the 

24 level of aggregate and specific excess/stop loss insur25 ance provided with respect to such plan and other 


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1 factors related to solvency risk, such as the plan’s 

2 projected levels of participation or claims, the nature 

3 of the plan’s liabilities, and the types of assets avail4 able to assure that such liabilities are met. 

5 ‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of 

6 any association health plan described in subsection (a)(2), 

7 the applicable authority may provide such additional re8 quirements relating to reserves, excess/stop loss insurance, 

9 and indemnification insurance as the applicable authority 

10 considers appropriate. Such requirements may be provided 

11 by regulation with respect to any such plan or any class 

12 of such plans. 

13 ‘‘(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSUR14 ANCE.—The applicable authority may provide for adjust15 ments to the levels of reserves otherwise required under 

16 subsections (a) and (b) with respect to any plan or class 

17 of plans to take into account excess/stop loss insurance 

18 provided with respect to such plan or plans. 

19 ‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The 

20 applicable authority may permit an association health plan 

21 described in subsection (a)(2) to substitute, for all or part 

22 of the requirements of this section (except subsection 

23 (a)(2)(B)(iii)), such security, guarantee, hold-harmless ar24 rangement, or other financial arrangement as the applica25 ble authority determines to be adequate to enable the plan 


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1 to fully meet all its financial obligations on a timely basis 

2 and is otherwise no less protective of the interests of par3 ticipants and beneficiaries than the requirements for 

4 which it is substituted. The applicable authority may take 

5 into account, for purposes of this subsection, evidence pro6 vided by the plan or sponsor which demonstrates an as7 sumption of liability with respect to the plan. Such evi8 dence may be in the form of a contract of indemnification, 

9 lien, bonding, insurance, letter of credit, recourse under 

10 applicable terms of the plan in the form of assessments 

11 of participating employers, security, or other financial ar12 rangement. 

13 ‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT

14 OF BENEFITS BY CERTAIN PLANS IN DISTRESS.— 

15 ‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSO16 CIATION HEALTH PLAN FUND.— 

17 ‘‘(A) IN GENERAL.—In the case of an as18 sociation health plan described in subsection 

19 (a)(2), the requirements of this subsection are 

20 met if the plan makes payments into the Asso21 ciation Health Plan Fund under this subpara22 graph when they are due. Such payments shall 

23 consist of annual payments in the amount of 

24 $5,000, and, in addition to such annual pay25 ments, such supplemental payments as the SecVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 retary may determine to be necessary under 

2 paragraph (2). Payments under this paragraph 

3 are payable to the Fund at the time determined 

4 by the Secretary. Initial payments are due in 

5 advance of certification under this part. Pay6 ments shall continue to accrue until a plan’s as7 sets are distributed pursuant to a termination 

8 procedure. 

9 ‘‘(B) PENALTIES FOR FAILURE TO MAKE

10 PAYMENTS.—If any payment is not made by a 

11 plan when it is due, a late payment charge of 

12 not more than 100 percent of the payment 

13 which was not timely paid shall be payable by 

14 the plan to the Fund. 

15 ‘‘(C) CONTINUED DUTY OF THE SEC16 RETARY.—The Secretary shall not cease to 

17 carry out the provisions of paragraph (2) on ac18 count of the failure of a plan to pay any pay19 ment when due. 

20 ‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE

21 EXCESS/STOP LOSS INSURANCE COVERAGE AND IN22 DEMNIFICATION INSURANCE COVERAGE FOR CER23 TAIN PLANS.—In any case in which the applicable 

24 authority determines that there is, or that there is 

25 reason to believe that there will be: (A) A failure to 


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1 take necessary corrective actions under section 

2 809(a) with respect to an association health plan de3 scribed in subsection (a)(2); or (B) a termination of 

4 such a plan under section 809(b) or 810(b)(8) (and, 

5 if the applicable authority is not the Secretary, cer6 tifies such determination to the Secretary), the Sec7 retary shall determine the amounts necessary to 

8 make payments to an insurer (designated by the 

9 Secretary) to maintain in force excess/stop loss in10 surance coverage or indemnification insurance cov11 erage for such plan, if the Secretary determines that 

12 there is a reasonable expectation that, without such 

13 payments, claims would not be satisfied by reason of 

14 termination of such coverage. The Secretary shall, to 

15 the extent provided in advance in appropriation 

16 Acts, pay such amounts so determined to the insurer 

17 designated by the Secretary. 

18 ‘‘(3) ASSOCIATION HEALTH PLAN FUND.— 

19 ‘‘(A) IN GENERAL.—There is established 

20 on the books of the Treasury a fund to be 

21 known as the ‘Association Health Plan Fund’. 

22 The Fund shall be available for making pay23 ments pursuant to paragraph (2). The Fund 

24 shall be credited with payments received pursu25 ant to paragraph (1)(A), penalties received purVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 suant to paragraph (1)(B); and earnings on in2 vestments of amounts of the Fund under sub3 paragraph (B). 

4 ‘‘(B) INVESTMENT.—Whenever the Sec5 retary determines that the moneys of the fund 

6 are in excess of current needs, the Secretary 

7 may request the investment of such amounts as 

8 the Secretary determines advisable by the Sec9 retary of the Treasury in obligations issued or 

10 guaranteed by the United States. 

11 ‘‘(g) EXCESS/STOP LOSS INSURANCE.—For purposes 

12 of this section— 

13 ‘‘(1) AGGREGATE EXCESS/STOP LOSS INSUR14 ANCE.—The term ‘aggregate excess/stop loss insur15 ance’ means, in connection with an association 

16 health plan, a contract— 

17 ‘‘(A) under which an insurer (meeting such 

18 minimum standards as the applicable authority 

19 may prescribe by regulation) provides for pay20 ment to the plan with respect to aggregate 

21 claims under the plan in excess of an amount 

22 or amounts specified in such contract; 

23 ‘‘(B) which is guaranteed renewable; and 


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1 ‘‘(C) which allows for payment of pre2 miums by any third party on behalf of the in3 sured plan. 

4 ‘‘(2) SPECIFIC EXCESS/STOP LOSS INSUR5 ANCE.—The term ‘specific excess/stop loss insur6 ance’ means, in connection with an association 

7 health plan, a contract— 

8 ‘‘(A) under which an insurer (meeting such 

9 minimum standards as the applicable authority 

10 may prescribe by regulation) provides for pay11 ment to the plan with respect to claims under 

12 the plan in connection with a covered individual 

13 in excess of an amount or amounts specified in 

14 such contract in connection with such covered 

15 individual; 

16 ‘‘(B) which is guaranteed renewable; and 

17 ‘‘(C) which allows for payment of pre18 miums by any third party on behalf of the in19 sured plan. 

20 ‘‘(h) INDEMNIFICATION INSURANCE.—For purposes 

21 of this section, the term ‘indemnification insurance’ 

22 means, in connection with an association health plan, a 

23 contract— 

24 ‘‘(1) under which an insurer (meeting such min25 imum standards as the applicable authority may preVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 scribe by regulation) provides for payment to the 

2 plan with respect to claims under the plan which the 

3 plan is unable to satisfy by reason of a termination 

4 pursuant to section 809(b) (relating to mandatory 

5 termination); 

6 ‘‘(2) which is guaranteed renewable and 

7 noncancellable for any reason (except as the applica8 ble authority may prescribe by regulation); and 

9 ‘‘(3) which allows for payment of premiums by 

10 any third party on behalf of the insured plan. 

11 ‘‘(i) RESERVES.—For purposes of this section, the 

12 term ‘reserves’ means, in connection with an association 

13 health plan, plan assets which meet the fiduciary stand14 ards under part 4 and such additional requirements re15 garding liquidity as the applicable authority may prescribe 

16 by regulation. 

17 ‘‘(j) SOLVENCY STANDARDS WORKING GROUP.— 

18 ‘‘(1) IN GENERAL.—Within 90 days after the 

19 date of the enactment of this section, the applicable 

20 authority shall establish a Solvency Standards Work21 ing Group. In prescribing the initial regulations 

22 under this section, the applicable authority shall 

23 take into account the recommendations of such 

24 Working Group. 


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1 ‘‘(2) MEMBERSHIP.—The Working Group shall 

2 consist of not more than 15 members appointed by 

3 the applicable authority. The applicable authority 

4 shall include among persons invited to membership 

5 on the Working Group at least one of each of the 

6 following: 

7 ‘‘(A) A representative of the National As8 sociation of Insurance Commissioners. 

9 ‘‘(B) A representative of the American 

10 Academy of Actuaries. 

11 ‘‘(C) A representative of the State govern12 ments, or their interests. 

13 ‘‘(D) A representative of existing self-in14 sured arrangements, or their interests. 

15 ‘‘(E) A representative of associations of 

16 the type referred to in section 801(b)(1), or 

17 their interests. 

18 ‘‘(F) A representative of multiemployer 

19 plans that are group health plans, or their in20 terests. 

21 ‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE22 LATED REQUIREMENTS. 

23 ‘‘(a) FILING FEE.—Under the procedure prescribed 

24 pursuant to section 802(a), an association health plan 

25 shall pay to the applicable authority at the time of filing 


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1 an application for certification under this part a filing fee 

2 in the amount of $5,000, which shall be available in the 

3 case of the Secretary, to the extent provided in appropria4 tion Acts, for the sole purpose of administering the certifi5 cation procedures applicable with respect to association 

6 health plans. 

7 ‘‘(b) INFORMATION TO BE INCLUDED IN APPLICA8 TION FOR CERTIFICATION.—An application for certifi9 cation under this part meets the requirements of this sec10 tion only if it includes, in a manner and form which shall 

11 be prescribed by the applicable authority by regulation, at 

12 least the following information: 

13 ‘‘(1) IDENTIFYING INFORMATION.—The names 

14 and addresses of— 

15 ‘‘(A) the sponsor; and 

16 ‘‘(B) the members of the board of trustees 

17 of the plan. 

18 ‘‘(2) STATES IN WHICH PLAN INTENDS TO DO

19 BUSINESS.—The States in which participants and 

20 beneficiaries under the plan are to be located and 

21 the number of them expected to be located in each 

22 such State. 

23 ‘‘(3) BONDING REQUIREMENTS.—Evidence pro24 vided by the board of trustees that the bonding re25 quirements of section 412 will be met as of the date 


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1 of the application or (if later) commencement of op2 erations. 

3 ‘‘(4) PLAN DOCUMENTS.—A copy of the docu4 ments governing the plan (including any bylaws and 

5 trust agreements), the summary plan description, 

6 and other material describing the benefits that will 

7 be provided to participants and beneficiaries under 

8 the plan. 

9 ‘‘(5) AGREEMENTS WITH SERVICE PRO10 VIDERS.—A copy of any agreements between the 

11 plan and contract administrators and other service 

12 providers. 

13 ‘‘(6) FUNDING REPORT.—In the case of asso14 ciation health plans providing benefits options in ad15 dition to health insurance coverage, a report setting 

16 forth information with respect to such additional 

17 benefit options determined as of a date within the 

18 120-day period ending with the date of the applica19 tion, including the following: 

20 ‘‘(A) RESERVES.—A statement, certified 

21 by the board of trustees of the plan, and a 

22 statement of actuarial opinion, signed by a 

23 qualified actuary, that all applicable require24 ments of section 806 are or will be met in acVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 cordance with regulations which the applicable 

2 authority shall prescribe. 

3 ‘‘(B) ADEQUACY OF CONTRIBUTION

4 RATES.—A statement of actuarial opinion, 

5 signed by a qualified actuary, which sets forth 

6 a description of the extent to which contribution 

7 rates are adequate to provide for the payment 

8 of all obligations and the maintenance of re9 quired reserves under the plan for the 12- 

10 month period beginning with such date within 

11 such 120-day period, taking into account the 

12 expected coverage and experience of the plan. If 

13 the contribution rates are not fully adequate, 

14 the statement of actuarial opinion shall indicate 

15 the extent to which the rates are inadequate 

16 and the changes needed to ensure adequacy. 

17 ‘‘(C) CURRENT AND PROJECTED VALUE OF

18 ASSETS AND LIABILITIES.—A statement of ac19 tuarial opinion signed by a qualified actuary, 

20 which sets forth the current value of the assets 

21 and liabilities accumulated under the plan and 

22 a projection of the assets, liabilities, income, 

23 and expenses of the plan for the 12-month pe24 riod referred to in subparagraph (B). The inVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 come statement shall identify separately the 

2 plan’s administrative expenses and claims. 

3 ‘‘(D) COSTS OF COVERAGE TO BE

4 CHARGED AND OTHER EXPENSES.—A state5 ment of the costs of coverage to be charged, in6 cluding an itemization of amounts for adminis7 tration, reserves, and other expenses associated 

8 with the operation of the plan. 

9 ‘‘(E) OTHER INFORMATION.—Any other 

10 information as may be determined by the appli11 cable authority, by regulation, as necessary to 

12 carry out the purposes of this part. 

13 ‘‘(c) FILING NOTICE OF CERTIFICATION WITH

14 STATES.—A certification granted under this part to an 

15 association health plan shall not be effective unless written 

16 notice of such certification is filed with the applicable 

17 State authority of each State in which at least 25 percent 

18 of the participants and beneficiaries under the plan are 

19 located. For purposes of this subsection, an individual 

20 shall be considered to be located in the State in which a 

21 known address of such individual is located or in which 

22 such individual is employed. 

23 ‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 

24 of any association health plan certified under this part, 

25 descriptions of material changes in any information which 


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1 was required to be submitted with the application for the 

2 certification under this part shall be filed in such form 

3 and manner as shall be prescribed by the applicable au4 thority by regulation. The applicable authority may re5 quire by regulation prior notice of material changes with 

6 respect to specified matters which might serve as the basis 

7 for suspension or revocation of the certification. 

8 ‘‘(e) REPORTING REQUIREMENTS FOR CERTAIN AS9 SOCIATION HEALTH PLANS.—An association health plan 

10 certified under this part which provides benefit options in 

11 addition to health insurance coverage for such plan year 

12 shall meet the requirements of section 103 by filing an 

13 annual report under such section which shall include infor14 mation described in subsection (b)(6) with respect to the 

15 plan year and, notwithstanding section 104(a)(1)(A), shall 

16 be filed with the applicable authority not later than 90 

17 days after the close of the plan year (or on such later date 

18 as may be prescribed by the applicable authority). The ap19 plicable authority may require by regulation such interim 

20 reports as it considers appropriate. 

21 ‘‘(f) ENGAGEMENT OF QUALIFIED ACTUARY.—The 

22 board of trustees of each association health plan which 

23 provides benefits options in addition to health insurance 

24 coverage and which is applying for certification under this 

25 part or is certified under this part shall engage, on behalf 


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1 of all participants and beneficiaries, a qualified actuary 

2 who shall be responsible for the preparation of the mate3 rials comprising information necessary to be submitted by 

4 a qualified actuary under this part. The qualified actuary 

5 shall utilize such assumptions and techniques as are nec6 essary to enable such actuary to form an opinion as to 

7 whether the contents of the matters reported under this 

8 part— 

9 ‘‘(1) are in the aggregate reasonably related to 

10 the experience of the plan and to reasonable expecta11 tions; and 

12 ‘‘(2) represent such actuary’s best estimate of 

13 anticipated experience under the plan. 

14 The opinion by the qualified actuary shall be made with 

15 respect to, and shall be made a part of, the annual report. 

16 ‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER17 MINATION. 

18 ‘‘Except as provided in section 809(b), an association 

19 health plan which is or has been certified under this part 

20 may terminate (upon or at any time after cessation of ac21 cruals in benefit liabilities) only if the board of trustees, 

22 not less than 60 days before the proposed termination 

23 date— 

24 ‘‘(1) provides to the participants and bene25 ficiaries a written notice of intent to terminate statVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 ing that such termination is intended and the pro2 posed termination date; 

3 ‘‘(2) develops a plan for winding up the affairs 

4 of the plan in connection with such termination in 

5 a manner which will result in timely payment of all 

6 benefits for which the plan is obligated; and 

7 ‘‘(3) submits such plan in writing to the appli8 cable authority. 

9 Actions required under this section shall be taken in such 

10 form and manner as may be prescribed by the applicable 

11 authority by regulation. 

12 ‘‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMI13 NATION. 

14 ‘‘(a) ACTIONS TO AVOID DEPLETION OF RE15 SERVES.—An association health plan which is certified 

16 under this part and which provides benefits other than 

17 health insurance coverage shall continue to meet the re18 quirements of section 806, irrespective of whether such 

19 certification continues in effect. The board of trustees of 

20 such plan shall determine quarterly whether the require21 ments of section 806 are met. In any case in which the 

22 board determines that there is reason to believe that there 

23 is or will be a failure to meet such requirements, or the 

24 applicable authority makes such a determination and so 

25 notifies the board, the board shall immediately notify the 


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1 qualified actuary engaged by the plan, and such actuary 

2 shall, not later than the end of the next following month, 

3 make such recommendations to the board for corrective 

4 action as the actuary determines necessary to ensure com5 pliance with section 806. Not later than 30 days after re6 ceiving from the actuary recommendations for corrective 

7 actions, the board shall notify the applicable authority (in 

8 such form and manner as the applicable authority may 

9 prescribe by regulation) of such recommendations of the 

10 actuary for corrective action, together with a description 

11 of the actions (if any) that the board has taken or plans 

12 to take in response to such recommendations. The board 

13 shall thereafter report to the applicable authority, in such 

14 form and frequency as the applicable authority may speci15 fy to the board, regarding corrective action taken by the 

16 board until the requirements of section 806 are met. 

17 ‘‘(b) MANDATORY TERMINATION.—In any case in 

18 which— 

19 ‘‘(1) the applicable authority has been notified 

20 under subsection (a) (or by an issuer of excess/stop 

21 loss insurance or indemnity insurance pursuant to 

22 section 806(a)) of a failure of an association health 

23 plan which is or has been certified under this part 

24 and is described in section 806(a)(2) to meet the re25 quirements of section 806 and has not been notified 


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1 by the board of trustees of the plan that corrective 

2 action has restored compliance with such require3 ments; and 

4 ‘‘(2) the applicable authority determines that 

5 there is a reasonable expectation that the plan will 

6 continue to fail to meet the requirements of section 

7 806, 

8 the board of trustees of the plan shall, at the direction 

9 of the applicable authority, terminate the plan and, in the 

10 course of the termination, take such actions as the appli11 cable authority may require, including satisfying any 

12 claims referred to in section 806(a)(2)(B)(iii) and recov13 ering for the plan any liability under subsection 

14 (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 

15 that the affairs of the plan will be, to the maximum extent 

16 possible, wound up in a manner which will result in timely 

17 provision of all benefits for which the plan is obligated. 

18 ‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL19 VENT ASSOCIATION HEALTH PLANS PRO20 VIDING HEALTH BENEFITS IN ADDITION TO 

21 HEALTH INSURANCE COVERAGE. 

22 ‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR

23 INSOLVENT PLANS.—Whenever the Secretary determines 

24 that an association health plan which is or has been cer25 tified under this part and which is described in section 


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1 806(a)(2) will be unable to provide benefits when due or 

2 is otherwise in a financially hazardous condition, as shall 

3 be defined by the Secretary by regulation, the Secretary 

4 shall, upon notice to the plan, apply to the appropriate 

5 United States district court for appointment of the Sec6 retary as trustee to administer the plan for the duration 

7 of the insolvency. The plan may appear as a party and 

8 other interested persons may intervene in the proceedings 

9 at the discretion of the court. The court shall appoint such 

10 Secretary trustee if the court determines that the trustee11 ship is necessary to protect the interests of the partici12 pants and beneficiaries or providers of medical care or to 

13 avoid any unreasonable deterioration of the financial con14 dition of the plan. The trusteeship of such Secretary shall 

15 continue until the conditions described in the first sen16 tence of this subsection are remedied or the plan is termi17 nated. 

18 ‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon 

19 appointment as trustee under subsection (a), shall have 

20 the power— 

21 ‘‘(1) to do any act authorized by the plan, this 

22 title, or other applicable provisions of law to be done 

23 by the plan administrator or any trustee of the plan; 


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1 ‘‘(2) to require the transfer of all (or any part) 

2 of the assets and records of the plan to the Sec3 retary as trustee; 

4 ‘‘(3) to invest any assets of the plan which the 

5 Secretary holds in accordance with the provisions of 

6 the plan, regulations prescribed by the Secretary, 

7 and applicable provisions of law; 

8 ‘‘(4) to require the sponsor, the plan adminis9 trator, any participating employer, and any employee 

10 organization representing plan participants to fur11 nish any information with respect to the plan which 

12 the Secretary as trustee may reasonably need in 

13 order to administer the plan; 

14 ‘‘(5) to collect for the plan any amounts due the 

15 plan and to recover reasonable expenses of the trust16 eeship; 

17 ‘‘(6) to commence, prosecute, or defend on be18 half of the plan any suit or proceeding involving the 

19 plan; 

20 ‘‘(7) to issue, publish, or file such notices, state21 ments, and reports as may be required by the Sec22 retary by regulation or required by any order of the 

23 court; 

24 ‘‘(8) to terminate the plan (or provide for its 

25 termination in accordance with section 809(b)) and 


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1 liquidate the plan assets, to restore the plan to the 

2 responsibility of the sponsor, or to continue the 

3 trusteeship; 

4 ‘‘(9) to provide for the enrollment of plan par5 ticipants and beneficiaries under appropriate cov6 erage options; and 

7 ‘‘(10) to do such other acts as may be nec8 essary to comply with this title or any order of the 

9 court and to protect the interests of plan partici10 pants and beneficiaries and providers of medical 

11 care. 

12 ‘‘(c) NOTICE OF APPOINTMENT.—As soon as prac13 ticable after the Secretary’s appointment as trustee, the 

14 Secretary shall give notice of such appointment to— 

15 ‘‘(1) the sponsor and plan administrator; 

16 ‘‘(2) each participant; 

17 ‘‘(3) each participating employer; and 

18 ‘‘(4) if applicable, each employee organization 

19 which, for purposes of collective bargaining, rep20 resents plan participants. 

21 ‘‘(d) ADDITIONAL DUTIES.—Except to the extent in22 consistent with the provisions of this title, or as may be 

23 otherwise ordered by the court, the Secretary, upon ap24 pointment as trustee under this section, shall be subject 

25 to the same duties as those of a trustee under section 704 


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1 of title 11, United States Code, and shall have the duties 

2 of a fiduciary for purposes of this title. 

3 ‘‘(e) OTHER PROCEEDINGS.—An application by the 

4 Secretary under this subsection may be filed notwith5 standing the pendency in the same or any other court of 

6 any bankruptcy, mortgage foreclosure, or equity receiver7 ship proceeding, or any proceeding to reorganize, conserve, 

8 or liquidate such plan or its property, or any proceeding 

9 to enforce a lien against property of the plan. 

10 ‘‘(f) JURISDICTION OF COURT.— 

11 ‘‘(1) IN GENERAL.—Upon the filing of an appli12 cation for the appointment as trustee or the issuance 

13 of a decree under this section, the court to which the 

14 application is made shall have exclusive jurisdiction 

15 of the plan involved and its property wherever lo16 cated with the powers, to the extent consistent with 

17 the purposes of this section, of a court of the United 

18 States having jurisdiction over cases under chapter 

19 11 of title 11, United States Code. Pending an adju20 dication under this section such court shall stay, and 

21 upon appointment by it of the Secretary as trustee, 

22 such court shall continue the stay of, any pending 

23 mortgage foreclosure, equity receivership, or other 

24 proceeding to reorganize, conserve, or liquidate the 

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1 sor, and any other suit against any receiver, conser2 vator, or trustee of the plan, the sponsor, or prop3 erty of the plan or sponsor. Pending such adjudica4 tion and upon the appointment by it of the Sec5 retary as trustee, the court may stay any proceeding 

6 to enforce a lien against property of the plan or the 

7 sponsor or any other suit against the plan or the 

8 sponsor. 

9 ‘‘(2) VENUE.—An action under this section 

10 may be brought in the judicial district where the 

11 sponsor or the plan administrator resides or does 

12 business or where any asset of the plan is situated. 

13 A district court in which such action is brought may 

14 issue process with respect to such action in any 

15 other judicial district. 

16 ‘‘(g) PERSONNEL.—In accordance with regulations 

17 which shall be prescribed by the Secretary, the Secretary 

18 shall appoint, retain, and compensate accountants, actu19 aries, and other professional service personnel as may be 

20 necessary in connection with the Secretary’s service as 

21 trustee under this section. 

22 ‘‘SEC. 811. STATE ASSESSMENT AUTHORITY. 

23 ‘‘(a) IN GENERAL.—Notwithstanding section 514, a 

24 State may impose by law a contribution tax on an associa25 tion health plan described in section 806(a)(2), if the plan 


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1 commenced operations in such State after the date of the 

2 enactment of this section. 

3 ‘‘(b) CONTRIBUTION TAX.—For purposes of this sec4 tion, the term ‘contribution tax’ imposed by a State on 

5 an association health plan means any tax imposed by such 

6 State if— 

7 ‘‘(1) such tax is computed by applying a rate to 

8 the amount of premiums or contributions, with re9 spect to individuals covered under the plan who are 

10 residents of such State, which are received by the 

11 plan from participating employers located in such 

12 State or from such individuals; 

13 ‘‘(2) the rate of such tax does not exceed the 

14 rate of any tax imposed by such State on premiums 

15 or contributions received by insurers or health main16 tenance organizations for health insurance coverage 

17 offered in such State in connection with a group 

18 health plan; 

19 ‘‘(3) such tax is otherwise nondiscriminatory; 

20 and 

21 ‘‘(4) the amount of any such tax assessed on 

22 the plan is reduced by the amount of any tax or as23 sessment otherwise imposed by the State on pre24 miums, contributions, or both received by insurers or 

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1 ance coverage, aggregate excess/stop loss insurance 

2 (as defined in section 806(g)(1)), specific excess/stop 

3 loss insurance (as defined in section 806(g)(2)), 

4 other insurance related to the provision of medical 

5 care under the plan, or any combination thereof pro6 vided by such insurers or health maintenance organi7 zations in such State in connection with such plan. 

8 ‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION. 

9 ‘‘(a) DEFINITIONS.—For purposes of this part— 

10 ‘‘(1) GROUP HEALTH PLAN.—The term ‘group 

11 health plan’ has the meaning provided in section 

12 733(a)(1) (after applying subsection (b) of this sec13 tion). 

14 ‘‘(2) MEDICAL CARE.—The term ‘medical care’ 

15 has the meaning provided in section 733(a)(2). 

16 ‘‘(3) HEALTH INSURANCE COVERAGE.—The 

17 term ‘health insurance coverage’ has the meaning 

18 provided in section 733(b)(1). 

19 ‘‘(4) HEALTH INSURANCE ISSUER.—The term 

20 ‘health insurance issuer’ has the meaning provided 

21 in section 733(b)(2). 

22 ‘‘(5) APPLICABLE AUTHORITY.—The term ‘ap23 plicable authority’ means the Secretary, except that, 

24 in connection with any exercise of the Secretary’s 

25 authority regarding which the Secretary is required 


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1 under section 506(d) to consult with a State, such 

2 term means the Secretary, in consultation with such 

3 State. 

4 ‘‘(6) HEALTH STATUS-RELATED FACTOR.—The 

5 term ‘health status-related factor’ has the meaning 

6 provided in section 733(d)(2). 

7 ‘‘(7) INDIVIDUAL MARKET.— 

8 ‘‘(A) IN GENERAL.—The term ‘individual 

9 market’ means the market for health insurance 

10 coverage offered to individuals other than in 

11 connection with a group health plan. 

12 ‘‘(B) TREATMENT OF VERY SMALL

13 GROUPS.— 

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

15 (ii), such term includes coverage offered in 

16 connection with a group health plan that 

17 has fewer than 2 participants as current 

18 employees or participants described in sec19 tion 732(d)(3) on the first day of the plan 

20 year. 

21 ‘‘(ii) STATE EXCEPTION.—Clause (i) 

22 shall not apply in the case of health insur23 ance coverage offered in a State if such 

24 State regulates the coverage described in 

25 such clause in the same manner and to the 


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1 same extent as coverage in the small group 

2 market (as defined in section 2791(e)(5) of 

3 the Public Health Service Act) is regulated 

4 by such State. 

5 ‘‘(8) PARTICIPATING EMPLOYER.—The term 

6 ‘participating employer’ means, in connection with 

7 an association health plan, any employer, if any indi8 vidual who is an employee of such employer, a part9 ner in such employer, or a self-employed individual 

10 who is such employer (or any dependent, as defined 

11 under the terms of the plan, of such individual) is 

12 or was covered under such plan in connection with 

13 the status of such individual as such an employee, 

14 partner, or self-employed individual in relation to the 

15 plan. 

16 ‘‘(9) APPLICABLE STATE AUTHORITY.—The 

17 term ‘applicable State authority’ means, with respect 

18 to a health insurance issuer in a State, the State in19 surance commissioner or official or officials des20 ignated by the State to enforce the requirements of 

21 title XXVII of the Public Health Service Act for the 

22 State involved with respect to such issuer. 

23 ‘‘(10) QUALIFIED ACTUARY.—The term ‘quali24 fied actuary’ means an individual who is a member 

25 of the American Academy of Actuaries. 


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1 ‘‘(11) AFFILIATED MEMBER.—The term ‘affili2 ated member’ means, in connection with a sponsor— 

3 ‘‘(A) a person who is otherwise eligible to 

4 be a member of the sponsor but who elects an 

5 affiliated status with the sponsor, 

6 ‘‘(B) in the case of a sponsor with mem7 bers which consist of associations, a person who 

8 is a member of any such association and elects 

9 an affiliated status with the sponsor, or 

10 ‘‘(C) in the case of an association health 

11 plan in existence on the date of the enactment 

12 of this section, a person eligible to be a member 

13 of the sponsor or one of its member associa14 tions. 

15 ‘‘(12) LARGE EMPLOYER.—The term ‘large em16 ployer’ means, in connection with a group health 

17 plan with respect to a plan year, an employer who 

18 employed an average of at least 51 employees on 

19 business days during the preceding calendar year 

20 and who employs at least 2 employees on the first 

21 day of the plan year. 

22 ‘‘(13) SMALL EMPLOYER.—The term ‘small em23 ployer’ means, in connection with a group health 

24 plan with respect to a plan year, an employer who 

25 is not a large employer. 


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1 ‘‘(b) RULES OF CONSTRUCTION.— 

2 ‘‘(1) EMPLOYERS AND EMPLOYEES.—For pur3 poses of determining whether a plan, fund, or pro4 gram is an employee welfare benefit plan which is an 

5 association health plan, and for purposes of applying 

6 this title in connection with such plan, fund, or pro7 gram so determined to be such an employee welfare 

8 benefit plan— 

9 ‘‘(A) in the case of a partnership, the term 

10 ‘employer’ (as defined in section 3(5)) includes 

11 the partnership in relation to the partners, and 

12 the term ‘employee’ (as defined in section 3(6)) 

13 includes any partner in relation to the partner14 ship; and 

15 ‘‘(B) in the case of a self-employed indi16 vidual, the term ‘employer’ (as defined in sec17 tion 3(5)) and the term ‘employee’ (as defined 

18 in section 3(6)) shall include such individual. 

19 ‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED

20 AS EMPLOYEE WELFARE BENEFIT PLANS.—In the 

21 case of any plan, fund, or program which was estab22 lished or is maintained for the purpose of providing 

23 medical care (through the purchase of insurance or 

24 otherwise) for employees (or their dependents) cov25 ered thereunder and which demonstrates to the SecVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 retary that all requirements for certification under 

2 this part would be met with respect to such plan, 

3 fund, or program if such plan, fund, or program 

4 were a group health plan, such plan, fund, or pro5 gram shall be treated for purposes of this title as an 

6 employee welfare benefit plan on and after the date 

7 of such demonstration.’’. 

8 (b) CONFORMING AMENDMENTS TO PREEMPTION

9 RULES.— 

10 (1) Section 514(b)(6) of such Act (29 U.S.C. 

11 1144(b)(6)) is amended by adding at the end the 

12 following new subparagraph: 

13 ‘‘(E) The preceding subparagraphs of this paragraph 

14 do not apply with respect to any State law in the case 

15 of an association health plan which is certified under part 

16 8.’’. 

17 (2) Section 514 of such Act (29 U.S.C. 1144) 

18 is amended— 

19 (A) in subsection (b)(4), by striking ‘‘Sub20 section (a)’’ and inserting ‘‘Subsections (a) and 

21 (f)’’; 

22 (B) in subsection (b)(5), by striking ‘‘sub23 section (a)’’ in subparagraph (A) and inserting 

24 ‘‘subsection (a) of this section and subsections 

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1 ing ‘‘subsection (a)’’ in subparagraph (B) and 

2 inserting ‘‘subsection (a) of this section or sub3 section (a)(2)(B) or (b) of section 805’’; and 

4 (C) by adding at the end the following new 

5 subsection: 

6 ‘‘(f)(1) Except as provided in subsection (b)(4), the 

7 provisions of this title shall supersede any and all State 

8 laws insofar as they may now or hereafter preclude, or 

9 have the effect of precluding, a health insurance issuer 

10 from offering health insurance coverage in connection with 

11 an association health plan which is certified under part 

12 8. 

13 ‘‘(2) Except as provided in paragraphs (4) and (5) 

14 of subsection (b) of this section— 

15 ‘‘(A) In any case in which health insurance cov16 erage of any policy type is offered under an associa17 tion health plan certified under part 8 to a partici18 pating employer operating in such State, the provi19 sions of this title shall supersede any and all laws 

20 of such State insofar as they may preclude a health 

21 insurance issuer from offering health insurance cov22 erage of the same policy type to other employers op23 erating in the State which are eligible for coverage 

24 under such association health plan, whether or not 


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1 such other employers are participating employers in 

2 such plan. 

3 ‘‘(B) In any case in which health insurance cov4 erage of any policy type is offered in a State under 

5 an association health plan certified under part 8 and 

6 the filing, with the applicable State authority (as de7 fined in section 812(a)(9)), of the policy form in 

8 connection with such policy type is approved by such 

9 State authority, the provisions of this title shall su10 persede any and all laws of any other State in which 

11 health insurance coverage of such type is offered, in12 sofar as they may preclude, upon the filing in the 

13 same form and manner of such policy form with the 

14 applicable State authority in such other State, the 

15 approval of the filing in such other State. 

16 ‘‘(3) Nothing in subsection (b)(6)(E) or the preceding 

17 provisions of this subsection shall be construed, with re18 spect to health insurance issuers or health insurance cov19 erage, to supersede or impair the law of any State— 

20 ‘‘(A) providing solvency standards or similar 

21 standards regarding the adequacy of insurer capital, 

22 surplus, reserves, or contributions, or 

23 ‘‘(B) relating to prompt payment of claims. 


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1 ‘‘(4) For additional provisions relating to association 

2 health plans, see subsections (a)(2)(B) and (b) of section 

3 805. 

4 ‘‘(5) For purposes of this subsection, the term ‘asso5 ciation health plan’ has the meaning provided in section 

6 801(a), and the terms ‘health insurance coverage’, ‘par7 ticipating employer’, and ‘health insurance issuer’ have 

8 the meanings provided such terms in section 812, respec9 tively.’’. 

10 (3) Section 514(b)(6)(A) of such Act (29 

11 U.S.C. 1144(b)(6)(A)) is amended— 

12 (A) in clause (i)(II), by striking ‘‘and’’ at 

13 the end; 

14 (B) in clause (ii), by inserting ‘‘and which 

15 does not provide medical care (within the mean16 ing of section 733(a)(2)),’’ after ‘‘arrange17 ment,’’, and by striking ‘‘title.’’ and inserting 

18 ‘‘title, and’’; and 

19 (C) by adding at the end the following new 

20 clause: 

21 ‘‘(iii) subject to subparagraph (E), in the case 

22 of any other employee welfare benefit plan which is 

23 a multiple employer welfare arrangement and which 

24 provides medical care (within the meaning of section 


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1 733(a)(2)), any law of any State which regulates in2 surance may apply.’’. 

3 (4) Section 514(d) of such Act (29 U.S.C. 

4 1144(d)) is amended— 

5 (A) by striking ‘‘Nothing’’ and inserting 

6 ‘‘(1) Except as provided in paragraph (2), noth7 ing’’; and 

8 (B) by adding at the end the following new 

9 paragraph: 

10 ‘‘(2) Nothing in any other provision of law enacted 

11 on or after the date of the enactment of this paragraph 

12 shall be construed to alter, amend, modify, invalidate, im13 pair, or supersede any provision of this title, except by 

14 specific cross-reference to the affected section.’’. 

15 (c) PLAN SPONSOR.—Section 3(16)(B) of such Act 

16 (29 U.S.C. 102(16)(B)) is amended by adding at the end 

17 the following new sentence: ‘‘Such term also includes a 

18 person serving as the sponsor of an association health plan 

19 under part 8.’’. 

20 (d) DISCLOSURE OF SOLVENCY PROTECTIONS RE21 LATED TO SELF-INSURED AND FULLY INSURED OPTIONS

22 UNDER ASSOCIATION HEALTH PLANS.—Section 102(b) 

23 of such Act (29 U.S.C. 102(b)) is amended by adding at 

24 the end the following: ‘‘An association health plan shall 

25 include in its summary plan description, in connection 


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1 with each benefit option, a description of the form of sol2 vency or guarantee fund protection secured pursuant to 

3 this Act or applicable State law, if any.’’. 

4 (e) SAVINGS CLAUSE.—Section 731(c) of such Act is 

5 amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 

6 (f) REPORT TO THE CONGRESS REGARDING CERTIFI7 CATION OF SELF-INSURED ASSOCIATION HEALTH

8 PLANS.—Not later than January 1, 2022, the Secretary 

9 of Labor shall report to the Committee on Education and 

10 Labor of the House of Representatives and the Committee 

11 on Health, Education, Labor, and Pensions of the Senate 

12 the effect association health plans have had, if any, on 

13 reducing the number of uninsured individuals. 

14 (g) CLERICAL AMENDMENT.—The table of contents 

15 in section 1 of the Employee Retirement Income Security 

16 Act of 1974 is amended by inserting after the item relat17 ing to section 734 the following new items: 

‘‘PART 8. RULES GOVERNING ASSOCIATION HEALTH PLANS

‘‘801. Association health plans. 

‘‘802. Certification of association health plans. 

‘‘803. Requirements relating to sponsors and boards of trustees. 

‘‘804. Participation and coverage requirements. 

‘‘805. Other requirements relating to plan documents, contribution rates, and 

benefit options. 

‘‘806. Maintenance of reserves and provisions for solvency for plans providing 

health benefits in addition to health insurance coverage. 

‘‘807. Requirements for application and related requirements. 

‘‘808. Notice requirements for voluntary termination. 

‘‘809. Corrective actions and mandatory termination. 

‘‘810. Trusteeship by the Secretary of insolvent association health plans providing health benefits in addition to health insurance coverage. 

‘‘811. State assessment authority. 

‘‘812. Definitions and rules of construction.’’. 


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1 SEC. 122. CLARIFICATION OF TREATMENT OF SINGLE EM2 PLOYER ARRANGEMENTS. 

3 Section 3(40)(B) of the Employee Retirement Income 

4 Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amend5 ed— 

6 (1) in clause (i), by inserting after ‘‘control 

7 group,’’ the following: ‘‘except that, in any case in 

8 which the benefit referred to in subparagraph (A) 

9 consists of medical care (as defined in section 

10 812(a)(2)), two or more trades or businesses, wheth11 er or not incorporated, shall be deemed a single em12 ployer for any plan year of such plan, or any fiscal 

13 year of such other arrangement, if such trades or 

14 businesses are within the same control group during 

15 such year or at any time during the preceding 1-year 

16 period,’’; 

17 (2) in clause (iii), by striking ‘‘(iii) the deter18 mination’’ and inserting the following: 

19 ‘‘(iii)(I) in any case in which the benefit re20 ferred to in subparagraph (A) consists of medical 

21 care (as defined in section 812(a)(2)), the deter22 mination of whether a trade or business is under 

23 ‘common control’ with another trade or business 

24 shall be determined under regulations of the Sec25 retary applying principles consistent and coextensive 

26 with the principles applied in determining whether 


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1 employees of two or more trades or businesses are 

2 treated as employed by a single employer under sec3 tion 4001(b), except that, for purposes of this para4 graph, an interest of greater than 25 percent may 

5 not be required as the minimum interest necessary 

6 for common control, or 

7 ‘‘(II) in any other case, the determination’’; 

8 (3) by redesignating clauses (iv) and (v) as 

9 clauses (v) and (vi), respectively; and 

10 (4) by inserting after clause (iii) the following 

11 new clause: 

12 ‘‘(iv) in any case in which the benefit referred 

13 to in subparagraph (A) consists of medical care (as 

14 defined in section 812(a)(2)), in determining, after 

15 the application of clause (i), whether benefits are 

16 provided to employees of two or more employers, the 

17 arrangement shall be treated as having only one par18 ticipating employer if, after the application of clause 

19 (i), the number of individuals who are employees and 

20 former employees of any one participating employer 

21 and who are covered under the arrangement is 

22 greater than 75 percent of the aggregate number of 

23 all individuals who are employees or former employ24 ees of participating employers and who are covered 

25 under the arrangement,’’. 


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1 SEC. 123. ENFORCEMENT PROVISIONS RELATING TO ASSO2 CIATION HEALTH PLANS. 

3 (a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL

4 MISREPRESENTATIONS.—Section 501 of the Employee 

5 Retirement Income Security Act of 1974 (29 U.S.C. 1131) 

6 is amended by adding at the end the following new sub7 section: 

8 ‘‘(c) Any person who willfully falsely represents, to 

9 any employee, any employee’s beneficiary, any employer, 

10 the Secretary, or any State, a plan or other arrangement 

11 established or maintained for the purpose of offering or 

12 providing any benefit described in section 3(1) to employ13 ees or their beneficiaries as— 

14 ‘‘(1) being an association health plan which has 

15 been certified under part 8; 

16 ‘‘(2) having been established or maintained 

17 under or pursuant to one or more collective bar18 gaining agreements which are reached pursuant to 

19 collective bargaining described in section 8(d) of the 

20 National Labor Relations Act (29 U.S.C. 158(d)) or 

21 paragraph Fourth of section 2 of the Railway Labor 

22 Act (45 U.S.C. 152, paragraph Fourth) or which are 

23 reached pursuant to labor-management negotiations 

24 under similar provisions of State public employee re25 lations laws; or 


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1 ‘‘(3) being a plan or arrangement described in 

2 section 3(40)(A)(i), 

3 shall, upon conviction, be imprisoned not more than 5 

4 years, be fined under title 18, United States Code, or 

5 both.’’. 

6 (b) CEASE ACTIVITIES ORDERS.—Section 502 of the 

7 Employee Retirement Income Security Act of 1974 (29 

8 U.S.C. 1132) is amended by adding at the end the fol9 lowing new subsection: 

10 ‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DE11 SIST ORDERS.— 

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

13 upon application by the Secretary showing the oper14 ation, promotion, or marketing of an association 

15 health plan (or similar arrangement providing bene16 fits consisting of medical care (as defined in section 

17 733(a)(2))) that— 

18 ‘‘(A) is not certified under part 8, is sub19 ject under section 514(b)(6) to the insurance 

20 laws of any State in which the plan or arrange21 ment offers or provides benefits, and is not li22 censed, registered, or otherwise approved under 

23 the insurance laws of such State; or 

24 ‘‘(B) is an association health plan certified 

25 under part 8 and is not operating in accordance 


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1 with the requirements under part 8 for such 

2 certification, 

3 a district court of the United States shall enter an 

4 order requiring that the plan or arrangement cease 

5 activities. 

6 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

7 apply in the case of an association health plan or 

8 other arrangement if the plan or arrangement shows 

9 that— 

10 ‘‘(A) all benefits under it referred to in 

11 paragraph (1) consist of health insurance cov12 erage; and 

13 ‘‘(B) with respect to each State in which 

14 the plan or arrangement offers or provides ben15 efits, the plan or arrangement is operating in 

16 accordance with applicable State laws that are 

17 not superseded under section 514. 

18 ‘‘(3) ADDITIONAL EQUITABLE RELIEF.—The 

19 court may grant such additional equitable relief, in20 cluding any relief available under this title, as it 

21 deems necessary to protect the interests of the pub22 lic and of persons having claims for benefits against 

23 the plan.’’. 

24 (c) RESPONSIBILITY FOR CLAIMS PROCEDURE.— 

25 Section 503 of the Employee Retirement Income Security 


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1 Act of 1974 (29 U.S.C. 1133) is amended by inserting 

2 ‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’, and by 

3 adding at the end the following new subsection: 

4 ‘‘(b) ASSOCIATION HEALTH PLANS.—The terms of 

5 each association health plan which is or has been certified 

6 under part 8 shall require the board of trustees or the 

7 named fiduciary (as applicable) to ensure that the require8 ments of this section are met in connection with claims 

9 filed under the plan.’’. 

10 SEC. 124. COOPERATION BETWEEN FEDERAL AND STATE 

11 AUTHORITIES. 

12 Section 506 of the Employee Retirement Income Se13 curity Act of 1974 (29 U.S.C. 1136) is amended by adding 

14 at the end the following new subsection: 

15 ‘‘(d) CONSULTATION WITH STATES WITH RESPECT

16 TO ASSOCIATION HEALTH PLANS.— 

17 ‘‘(1) AGREEMENTS WITH STATES.—The Sec18 retary shall consult with the State recognized under 

19 paragraph (2) with respect to an association health 

20 plan regarding the exercise of— 

21 ‘‘(A) the Secretary’s authority under sec22 tions 502 and 504 to enforce the requirements 

23 for certification under part 8; and 

24 ‘‘(B) the Secretary’s authority to certify 

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1 ance with regulations of the Secretary applica2 ble to certification under part 8. 

3 ‘‘(2) RECOGNITION OF PRIMARY DOMICILE

4 STATE.—In carrying out paragraph (1), the Sec5 retary shall ensure that only one State will be recog6 nized, with respect to any particular association 

7 health plan, as the State with which consultation is 

8 required. In carrying out this paragraph— 

9 ‘‘(A) in the case of a plan which provides 

10 health insurance coverage (as defined in section 

11 812(a)(3)), such State shall be the State with 

12 which filing and approval of a policy type of13 fered by the plan was initially obtained, and 

14 ‘‘(B) in any other case, the Secretary shall 

15 take into account the places of residence of the 

16 participants and beneficiaries under the plan 

17 and the State in which the trust is main18 tained.’’. 

19 SEC. 125. EFFECTIVE DATE AND TRANSITIONAL AND 

20 OTHER RULES. 

21 (a) EFFECTIVE DATE.—The amendments made by 

22 this Act shall take effect 1 year after the date of the enact23 ment of this Act. The Secretary of Labor shall first issue 

24 all regulations necessary to carry out the amendments 


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1 made by this Act within 1 year after the date of the enact2 ment of this Act. 

3 (b) TREATMENT OF CERTAIN EXISTING HEALTH

4 BENEFITS PROGRAMS.— 

5 (1) IN GENERAL.—In any case in which, as of 

6 the date of the enactment of this Act, an arrange7 ment is maintained in a State for the purpose of 

8 providing benefits consisting of medical care for the 

9 employees and beneficiaries of its participating em10 ployers, at least 200 participating employers make 

11 contributions to such arrangement, such arrange12 ment has been in existence for at least 10 years, and 

13 such arrangement is licensed under the laws of one 

14 or more States to provide such benefits to its par15 ticipating employers, upon the filing with the appli16 cable authority (as defined in section 812(a)(5) of 

17 the Employee Retirement Income Security Act of 

18 1974 (as amended by this subtitle)) by the arrange19 ment of an application for certification of the ar20 rangement under part 8 of subtitle B of title I of 

21 such Act— 

22 (A) such arrangement shall be deemed to 

23 be a group health plan for purposes of title I 

24 of such Act; 


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1 (B) the requirements of sections 801(a) 

2 and 803(a) of the Employee Retirement Income 

3 Security Act of 1974 shall be deemed met with 

4 respect to such arrangement; 

5 (C) the requirements of section 803(b) of 

6 such Act shall be deemed met, if the arrange7 ment is operated by a board of directors 

8 which— 

9 (i) is elected by the participating em10 ployers, with each employer having one 

11 vote; and 

12 (ii) has complete fiscal control over 

13 the arrangement and which is responsible 

14 for all operations of the arrangement; 

15 (D) the requirements of section 804(a) of 

16 such Act shall be deemed met with respect to 

17 such arrangement; and 

18 (E) the arrangement may be certified by 

19 any applicable authority with respect to its op20 erations in any State only if it operates in such 

21 State on the date of certification. 

22 The provisions of this subsection shall cease to apply 

23 with respect to any such arrangement at such time 

24 after the date of the enactment of this Act as the 


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1 applicable requirements of this subsection are not 

2 met with respect to such arrangement. 

3 (2) DEFINITIONS.—For purposes of this sub4 section, the terms ‘‘group health plan’’, ‘‘medical 

5 care’’, and ‘‘participating employer’’ shall have the 

6 meanings provided in section 812 of the Employee 

7 Retirement Income Security Act of 1974, except 

8 that the reference in paragraph (7) of such section 

9 to an ‘‘association health plan’’ shall be deemed a 

10 reference to an arrangement referred to in this sub11 section. 

12 (c) COORDINATION WITH EXISTING LAW.—Nothing 

13 in this Act shall require plans to become certified under 

14 section 802 of the Employee Retirement Income Security 

15 Act of 1974, as amended by this Act, or require plans 

16 that are not certified under such section to comply with 

17 the requirements under part 8 of such Act, except to the 

18 extent provided in section 809 of such Act. 

19 Subtitle C—Tax-Related Provisions 

20 SEC. 131. PREMIUM ASSISTANCE ADJUSTMENT TO RE21 FLECT AGE. 

22 (a) MODIFICATION OF APPLICABLE PERCENTAGE.— 

23 Section 36B(b)(3)(A) of the Internal Revenue Code of 

24 1986 is amended to read as follows: 

25 ‘‘(A) APPLICABLE PERCENTAGE.— 


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1 ‘‘(i) IN GENERAL.—The applicable 

2 percentage for any taxable year shall be 

3 the percentage such that the applicable 

4 percentage for any taxpayer whose house5 hold income is within an income tier speci6 fied in the following table shall increase, on 

7 a sliding scale in a linear manner, from the 

8 initial percentage to the final percentage 

9 specified in such table for such income tier 

10 with respect to a taxpayer of the age in11 volved: 

‘‘In the case of 

household income 

(expressed as a 

percent of the 

poverty line) 

within the 

following 

income tier: 

Up to Age 29 Age 30–39 Age 40–49 Age 50–59 Over Age 59 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Up to 100% 0 0 0 0 0 0 0 0 0 0 

100%–133% 2 2 2 2 2 2 2 2 2 2 

133%–150% 3 4 3 4 3 4 3 4 3 4 

150%–200% 4 4.3 4 5.3 4 6.3 4 7.3 4 8.3 

200%–250% 4.3 4.3 5.3 5.9 6.3 8.05 7.3 9 8.3 10 

250%–300% 4.3 4.3 5.9 5.9 8.05 8.35 9 10.5 10 11.5 

300%–400% 4.3 4.3 5.9 5.9 8.35 8.35 10.5 10.5 11.5 11.5 

12 ‘‘(ii) AGE DETERMINATIONS.— 

13 ‘‘(I) IN GENERAL.—For purposes 

14 of clause (i), the age of the taxpayer 

15 taken into account under clause (i) 

16 with respect to any taxable year is the 

17 age attained by such taxpayer before 

18 the close of such taxable year. 


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1 ‘‘(II) JOINT RETURNS.—In the 

2 case of a joint return, the age of the 

3 older spouse shall be taken into ac4 count under clause (i). 

5 ‘‘(iii) INDEXING.—In the case of any 

6 taxable year beginning after calendar year 

7 2021, the initial and final percentages con8 tained in clause (i) shall be adjusted to re9 flect— 

10 ‘‘(I) the excess (if any) of the 

11 rate of premium growth for the period 

12 beginning with calendar year 2013 

13 and ending with calendar year 2020, 

14 over the rate of income growth for 

15 such period, and 

16 ‘‘(II) in addition to any adjust17 ment under subclause (I), the excess 

18 (if any) of the rate of premium 

19 growth for calendar year 2020, over 

20 the rate of growth in the consumer 

21 price index for calendar year 2020. 

22 ‘‘(iv) FAILSAFE.—Clause (iii)(II) shall 

23 apply only if the aggregate amount of pre24 mium tax credits under this section and 

25 cost-sharing reductions under section 1402 


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1 of the Patient Protection and Affordable 

2 Care Act for calendar year 2018 exceeds 

3 an amount equal to 0.504 percent of the 

4 gross domestic product for such calendar 

5 year.’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to taxable years beginning after 

8 December 31, 2020. 

9 SEC. 132. REPEAL OF ANNUAL FEE ON HEALTH INSURANCE 

10 PROVIDERS. 

11 (a) IN GENERAL.—The Patient Protection and Af12 fordable Care Act is amended by striking section 9010. 

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

14 this section shall apply with respect to calendar years be15 ginning after December 31, 2019. 

16 SEC. 133. REPEAL OF MEDICAL DEVICE EXCISE TAX. 

17 (a) IN GENERAL.—Chapter 32 of the Internal Rev18 enue Code of 1986 is amended by striking subchapter E. 

19 (b) CONFORMING AMENDMENTS.— 

20 (1) Subsection (a) of section 4221 of such Code 

21 is amended by striking the last sentence. 

22 (2) Paragraph (2) of section 6416(b) of such 

23 Code is amended by striking the last sentence. 


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1 (c) CLERICAL AMENDMENT.—The table of sub2 chapters for chapter 32 of such Code is amended by strik3 ing the item relating to subchapter E. 

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

5 this section shall apply to sales after December 31, 2017. 

6 SEC. 134. INCLUSION IN INCOME OF CERTAIN COSTS OF 

7 EMPLOYER-PROVIDED COVERAGE UNDER 

8 HEALTH PLANS. 

9 (a) IN GENERAL.—Section 106 of the Internal Rev10 enue Code of 1986 is amended by adding at the end the 

11 following new subsection: 

12 ‘‘(h) LIMITATION.— 

13 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

14 apply to the extent that employer-provided coverage 

15 under health plans for an employee for a taxable 

16 year exceeds— 

17 ‘‘(A) $10,200 for self-only coverage, and 

18 ‘‘(B) $27,500 for all other coverage. 

19 ‘‘(2) IN GENERAL.—In the case of any calendar 

20 year after 2021, the dollar amounts in paragraph 

21 (1) shall each be increased by an amount equal to— 

22 ‘‘(A) such dollar amount, multiplied by— 

23 ‘‘(B) the cost-of-living adjustment deter24 mined under section 1(f)(3) for such calendar 

25 year, determined 


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1 ‘‘(i) by substituting ‘calendar year 

2 2020’ for ‘calendar year 2016’ in subpara3 graph (A)(ii) thereof, and 

4 ‘‘(ii) by substituting for the C–CPI–U 

5 referred to in section 1(f)(3)(A) the 

6 amount that such CPI would have been if 

7 the annual percentage increase in CPI with 

8 respect to each year after 2020 and before 

9 2031 had been one percentage point great10 er. 

11 ‘‘(3) TERMS RELATED TO CPI.— 

12 ‘‘(A) ANNUAL PERCENTAGE INCREASE.— 

13 For purposes of subparagraph (B)(ii)(II), the 

14 term ‘annual percentage increase’ means the 

15 percentage (if any) by which C–CPI–U for any 

16 year exceeds the C–CPI–U for the prior year. 

17 ‘‘(B) OTHER TERMS.—Terms used in this 

18 paragraph which are also used in section 

19 1(f)(3) shall have the same meanings as when 

20 used in such section.’’. 

21 (b) REPEAL OF EMPLOYER-SPONSORED HEALTH

22 COVERAGE EXCISE TAX.—The Internal Revenue Code of 

23 1986 is amended by striking section 4980I. 


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

2 this section shall apply with respect to taxable years begin3 ning after December 31, 2020. 

4 SEC. 135. INCLUSION OF CERTAIN OVER-THE-COUNTER 

5 MEDICAL PRODUCTS AS QUALIFIED MEDICAL 

6 EXPENSES. 

7 (a) HSAS.—Section 223(d)(2) of the Internal Rev8 enue Code of 1986 is amended— 

9 (1) by striking the last sentence of subpara10 graph (A) and inserting the following: ‘‘For pur11 poses of this subparagraph, amounts paid for men12 strual care products shall be treated as paid for 

13 medical care.’’, and 

14 (2) by adding at the end the following new sub15 paragraph: 

16 ‘‘(D) MENSTRUAL CARE PRODUCT.—For 

17 purposes of this paragraph, the term ‘menstrual 

18 care product’ means a tampon, pad, liner, cup, 

19 sponge, or similar product used by women with 

20 respect to menstruation or other genital-tract 

21 secretions.’’. 

22 (b) ARCHER MSAS.—Section 220(d)(2)(A) of such 

23 Code is amended by striking the last sentence and insert24 ing the following: ‘‘For purposes of this subparagraph, 

25 amounts paid for menstrual care products (as defined in 


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1 section 223(d)(2)(D)) shall be treated as paid for medical 

2 care.’’. 

3 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS

4 AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec5 tion 106 of such Code is amended by striking subsection 

6 (f) and inserting the following new subsection: 

7 ‘‘(f) REIMBURSEMENTS FOR MENSTRUAL CARE

8 PRODUCTS.—For purposes of this section and section 

9 105, expenses incurred for menstrual care products (as 

10 defined in section 223(d)(2)(D)) shall be treated as in11 curred for medical care.’’. 

12 (d) EFFECTIVE DATES.— 

13 (1) DISTRIBUTIONS FROM HEALTH SAVINGS AC14 COUNTS.—The amendments made by subsections (a) 

15 and (b) shall apply to amounts paid after December 

16 31, 2020. 

17 (2) REIMBURSEMENTS.—The amendment made 

18 by subsection (c) shall apply to expenses incurred 

19 after December 31, 2020. 

20 SEC. 136. REPEAL OF LIMITATION ON HEALTH FLEXIBLE 

21 SPENDING ARRANGEMENTS. 

22 (a) IN GENERAL.—Section 125 of the Internal Rev23 enue Code of 1986 is amended by striking subsection (i). 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2018. 

4 SEC. 137. MEDICARE PART D TAX DEDUCTION. 

5 (a) IN GENERAL.—Section 139A of the Internal Rev6 enue Code of 1986 is amended by adding at the end the 

7 following: ‘‘This section shall not be taken into account 

8 for purposes of determining whether any deduction is al9 lowable with respect to any cost taken into account in de10 termining such payment.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to taxable years beginning after 

13 December 31, 2018. 

14 SEC. 138. REPEAL OF NET INVESTMENT INCOME TAX. 

15 (a) IN GENERAL.—Subtitle A of the Internal Rev16 enue Code of 1986 is amended by striking chapter 2A. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2019. 

20 SEC. 139. BASIS FOR PURPOSES OF DETERMINING GAIN OR 

21 LOSS. 

22 Nothing in the Internal Revenue Code of 1986 shall 

23 be construed to prevent the Secretary of the Treasury (or 

24 any designee of the Secretary) from providing that the 


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1 basis for determining gain or loss (whether on the basis 

2 of cost or otherwise) is adjusted on the basis of inflation. 

3 SEC. 140. DEDUCTION FOR QUALIFIED CHARITY CARE. 

4 (a) IN GENERAL.—Part VI of subchapter B of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by adding at the end the following new section: 

7 ‘‘SEC. 199B. QUALIFIED CHARITY CARE. 

8 ‘‘(a) IN GENERAL.—There shall be allowed as a de9 duction for the taxable year an amount equal to— 

10 ‘‘(1) in the case of a direct primary care physi11 cian, an amount equal to the sum of— 

12 ‘‘(A) the fee (as published on a publicly 

13 available website of such physician) for physi14 cians’ services that are qualified charity care 

15 furnished by such taxpayer during such year, 

16 and 

17 ‘‘(B) for each visit by a patient to such 

18 physician during which qualified charity care is 

19 furnished, half of so much of the lowest sub20 scription fee of such physician that is attrib21 utable to a month, and 

22 ‘‘(2) in the case of any other individual, the un23 reimbursed Medicare-based value of qualified charity 

24 care furnished by such taxpayer during such year. 

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


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1 ‘‘(1) UNREIMBURSED MEDICARE-BASED

2 VALUE.—The term ‘unreimbursed Medicare-based 

3 value’ means, with respect to physicians’ services, 

4 the amount payable for such services under the phy5 sician fee schedule established under section 1848 of 

6 the Social Security Act. 

7 ‘‘(2) QUALIFIED CHARITY CARE.—The term 

8 ‘qualified charity care’ means physicians’ services 

9 that are furnished— 

10 ‘‘(A) without expectation of reimburse11 ment, and 

12 ‘‘(B) to an individual enrolled— 

13 ‘‘(i) under a State plan under title 

14 XIX of the Social Security Act (or a waiv15 er of such plan), or 

16 ‘‘(ii) under a State child health plan 

17 under title XXI of the Social Security Act 

18 (or a waiver of such plan). 

19 ‘‘(3) DIRECT PRIMARY CARE PHYSICIAN.—The 

20 term ‘direct primary care physician’ means a physi21 cian (as defined in section 1861(r) of the Social Se22 curity Act) who provides primary care— 

23 ‘‘(A) to individuals who have paid a peri24 odic subscription fee, and 


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1 ‘‘(B) in exchange for a fee that is pub2 lished on a publicly available website of such 

3 physician. 

4 ‘‘(4) PHYSICIANS’ SERVICES.—The term ‘physi5 cians’ services’ has the meaning given such term by 

6 section 1861(q) of the Social Security Act. 

7 ‘‘(c) LIMITATION.—The amount allowed as a deduc8 tion under subsection (a) for a taxable year shall not ex9 ceed the gross receipts attributable to physicians’ services 

10 furnished by the taxpayer during the taxable year.’’. 

11 (b) CLERICAL AMENDMENT.—The table of sections 

12 for part VI of subchapter B of chapter 1 of the Internal 

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

14 the following new item: 

‘‘Sec. 199B. Qualified charity care.’’. 

15 SEC. 141. LIMITATION ON LIABILITY FOR VOLUNTEER 

16 HEALTH CARE PROFESSIONALS. 

17 (a) IN GENERAL.—Title II of the Public Health Serv18 ice Act (42 U.S.C. 202 et seq.) is amended by inserting 

19 after section 224 the following: 

20 ‘‘SEC. 224A. LIMITATION ON LIABILITY FOR VOLUNTEER 

21 HEALTH CARE PROFESSIONALS. 

22 ‘‘(a) LIMITATION ON LIABILITY.—A physician shall 

23 not be liable under Federal or State law in any civil action 

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1 cian, or attending medical personnel supporting such phy2 sician, if such act or omission— 

3 ‘‘(1) occurs in the course of furnishing qualified 

4 charity care (as such term is defined in section 

5 199B of the Internal Revenue Code of 1986); and 

6 ‘‘(2) was not grossly negligent. 

7 ‘‘(b) PREEMPTION.—This section preempts the laws 

8 of a State or any political subdivision of a State to the 

9 extent that such laws are inconsistent with this section, 

10 unless such laws provide greater protection from liability 

11 for a defendant. 

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

13 ‘‘(1) PHYSICIAN.—The term ‘physician’ has the 

14 meaning given such term by section 1861(r) of the 

15 Social Security Act. 

16 ‘‘(2) ATTENDING MEDICAL PERSONNEL.—The 

17 term ‘attending medical personnel’ means an indi18 vidual who is licensed to directly support a physician 

19 in furnishing medical services.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to any claim filed to the extent 

22 that it is with respect to acts or omissions occurring after 

23 the date of the enactment of this Act. 


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1 TITLE II—MEDICARE AND 

2 MEDICAID REFORMS 

3 Subtitle A 

4 SEC. 201. FLEXIBLE BLOCK GRANT OPTION FOR STATES. 

5 Title XIX of the Social Security Act is amended— 

6 (1) in section 1903 (42 U.S.C. 1396b)— 

7 (A) in subsection (a), in the matter before 

8 paragraph (1), by inserting ‘‘and section 

9 1903A(a)’’ after ‘‘except as otherwise provided 

10 in this section’’; and 

11 (B) in subsection (d)(1), by striking ‘‘to 

12 which’’ and inserting ‘‘to which, subject to sec13 tion 1903A(a),’’; and 

14 (2) by inserting after such section 1903 the fol15 lowing new section: 

16 ‘‘SEC. 1903A. FLEXIBLE BLOCK GRANT OPTION FOR STATES. 

17 ‘‘(a) IN GENERAL.—In the case of a State that elects 

18 the option of applying this section for a 10-fiscal-year pe19 riod (beginning no earlier than fiscal year 2020 and, at 

20 the State option, for any succeeding 10-fiscal-year period) 

21 and that has a plan approved by the Secretary under sub22 section (b) to carry out the option for such period— 

23 ‘‘(1) the State shall receive, instead of amounts 

24 otherwise payable to the State under this title for 

25 medical assistance for block grant individuals within 


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1 the applicable block grant category (as defined in 

2 subsection (f)) for the State during the period in 

3 which the election is in effect, the amount specified 

4 in subsection (d); 

5 ‘‘(2) the payment under this section may only 

6 be used consistent with the State plan under sub7 section (b) for block grant health care assistance (as 

8 defined in subsection (g)); and 

9 ‘‘(3) with respect to block grant individuals 

10 within the applicable block grant category for the 

11 State for which block grant health care assistance is 

12 made available under this section, such assistance 

13 shall be instead of medical assistance otherwise pro14 vided to the individual under this title. 

15 ‘‘(b) STATE PLAN FOR ADMINISTERING BLOCK

16 GRANT OPTION.— 

17 ‘‘(1) IN GENERAL.—No payment shall be made 

18 under this section to a State pursuant to an election 

19 for a 10-fiscal-year period under subsection (a) un20 less the State has a plan, approved under paragraph 

21 (2), for such period that specifies— 

22 ‘‘(A) the applicable block grant category 

23 with respect to which the State will apply the 

24 option under this section for such period; 


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1 ‘‘(B) the conditions for eligibility of block 

2 grant individuals within such applicable block 

3 grant category for block grant health care as4 sistance under the option, which shall be in5 stead of other conditions for eligibility under 

6 this title, except that in the case of a State that 

7 has elected the applicable block grant category 

8 described in— 

9 ‘‘(i) paragraph (1) of subsection (f), 

10 the plan must provide for eligibility for 

11 pregnant women and children required to 

12 be provided medical assistance under sub13 sections (a)(10)(A)(i) and (e)(4) of section 

14 1902; or 

15 ‘‘(ii) paragraph (2) of subsection (f), 

16 the plan must provide for eligibility for 

17 pregnant women required to be provided 

18 medical assistance under subsection 

19 (a)(10)(A)(i); and 

20 ‘‘(C) the types of items and services, the 

21 amount, duration, and scope of such services, 

22 the cost-sharing with respect to such services, 

23 and the method for delivery of block grant 

24 health care assistance under this section, which 

25 shall be instead of the such types, amount, duVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00110 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 ration, and scope, cost-sharing, and methods of 

2 delivery for medical assistance otherwise re3 quired under this title, except that the plan 

4 must provide for assistance for— 

5 ‘‘(i) hospital care; 

6 ‘‘(ii) surgical care and treatment; 

7 ‘‘(iii) medical care and treatment; 

8 ‘‘(iv) obstetrical and prenatal care and 

9 treatment; 

10 ‘‘(v) prescribed drugs, medicines, and 

11 prosthetic devices; 

12 ‘‘(vi) other medical supplies and serv13 ices; and 

14 ‘‘(vii) health care for children under 

15 18 years of age. 

16 ‘‘(2) REVIEW AND APPROVAL.—A plan de17 scribed in paragraph (1) shall be deemed approved 

18 by the Secretary unless the Secretary determines, 

19 within 30 days after the date of the Secretary’s re20 ceipt of the plan, that the plan is incomplete or actu21 arially unsound and, with respect to such plan and 

22 its implementation under this section, the require23 ments of paragraphs (1), (10)(B), (17), and (23) of 

24 section 1902(a) shall not apply. 

25 ‘‘(c) AMOUNT OF BLOCK GRANT FUNDS.— 


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1 ‘‘(1) FOR INITIAL FISCAL YEAR.—The block 

2 grant amount under this subsection for a State for 

3 the initial fiscal year in the first 10-fiscal-year pe4 riod is equal to an amount determined by the Sec5 retary to equal the per capita spending on the popu6 lation covered by the State plan established in sub7 section (b) of section 1903A. 

8 ‘‘(2) FOR ANY SUBSEQUENT FISCAL YEAR.— 

9 The block grant amount under this section for a 

10 State for each succeeding fiscal year (in any 10-fis11 cal-year period) is equal to the block grant amount 

12 under paragraph (1) (or this paragraph) for the 

13 State for the previous fiscal year increased by the 

14 annual increase in the consumer price index for all 

15 urban consumers (all items; U.S. city average) for 

16 the fiscal year involved. 

17 ‘‘(3) AVAILABILITY OF ROLLOVER FUNDS.—The 

18 block grant amount under this subsection for a 

19 State for a fiscal year shall remain available to the 

20 State for expenditures under this section for the suc21 ceeding fiscal year but only if an election is in effect 

22 under this section for the State in such succeeding 

23 fiscal year. 

24 ‘‘(d) FEDERAL PAYMENT AND STATE RESPONSI25 BILITY.—The Secretary shall pay to each State with an 


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1 election in effect under this section for a fiscal year, from 

2 its block grant amount under subsection (c) available for 

3 such fiscal year, an amount for each quarter of such fiscal 

4 year equal to the enhanced FMAP described in the first 

5 sentence of section 2105(b) of the total amount expended 

6 under the State plan under this section during such quar7 ter, and the State is responsible for the balance of funds 

8 to carry out such plan. 

9 ‘‘(e) BLOCK GRANT INDIVIDUAL DEFINED.—In this 

10 section, the term ‘block grant individual’ means, with re11 spect to a State for a 10-fiscal-year period, an individual 

12 who is within an applicable block grant category for the 

13 State and such period. 

14 ‘‘(f) APPLICABLE BLOCK GRANT CATEGORY DE15 FINED.—In this section, the term ‘applicable block grant 

16 category’ means with respect to a State for a 10-fiscal17 year period, either of the following as specified by the 

18 State for such period in its plan under subsection 

19 (b)(1)(A): 

20 ‘‘(1) ELDERLY, BLIND, DISABLED.—Both of the 

21 following categories: 

22 ‘‘(A) ELDERLY.—Individuals who are 65 

23 years of age or older. 

24 ‘‘(B) BLIND AND DISABLED.—Individuals 

25 (not described in the previous subparagraph) 


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1 who are eligible for medical assistance under 

2 this title on the basis of being blind or disabled. 

3 ‘‘(2) ELDERLY, BLIND, DISABLED, AND OTH4 ERS.—All of the following categories: 

5 ‘‘(A) ELDERLY.—Individuals who are 65 

6 years of age or older. 

7 ‘‘(B) BLIND AND DISABLED.—Individuals 

8 (not described in the previous subparagraph) 

9 who are eligible for medical assistance under 

10 this title on the basis of being blind or disabled. 

11 ‘‘(C) CHILDREN.—Individuals (not de12 scribed in a previous subparagraph) who are 

13 children under 19 years of age. 

14 ‘‘(D) EXPANSION ENROLLEES.—Individ15 uals (not described in a previous subparagraph) 

16 for whom the amounts expended for medical as17 sistance are subject to an increase or change in 

18 the Federal medical assistance percentage 

19 under subsection (y) or (z)(2), respectively, of 

20 section 1905. 

21 ‘‘(E) OTHER NONELDERLY, NONDISABLED, 

22 NON-EXPANSION ADULTS.—Individuals who are 

23 not described in any of the previous subpara24 graphs and whose income does not exceed 60 

25 percent of the poverty line (as defined in section 


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1 2110(c)(5)) applicable to a family of the size in2 volved. 

3 ‘‘(g) BLOCK GRANT HEALTH CARE ASSISTANCE.— 

4 In this section, the term ‘block grant health care assist5 ance’ means assistance for health-care-related items and 

6 medical services for block grant individuals within the ap7 plicable block grant category for the State and 10-fiscal8 year period involved who are low-income individuals (as 

9 defined by the State). 

10 ‘‘(h) AUDITING.—As a condition of receiving funds 

11 under this section, a State shall contract with an inde12 pendent entity to conduct audits of its expenditures made 

13 with respect to activities funded under this section for 

14 each fiscal year for which the State elects to apply this 

15 section to ensure that such funds are used consistent with 

16 this section and shall make such audits available to the 

17 Secretary upon the request of the Secretary.’’. 

18 SEC. 202. MEDICAID ELIGIBILITY DETERMINATIONS. 

19 (a) STATE FLEXIBILITY TO USE CONTRACTORS TO

20 MAKE ELIGIBILITY DETERMINATIONS ON BEHALF OF

21 STATE.—Section 1902(a)(5) of the Social Security Act 

22 (42 U.S.C. 1396a(a)(5)) is amended by inserting before 

23 the semicolon at the end the following: ‘‘, but such deter24 minations of eligibility may be made, at the option of a 

25 State, under a contract with another State or local agency 


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1 or a contractor so long as the contract does not provide 

2 incentives for the agency or contractor to delay eligibility 

3 determinations or to deny eligibility for individuals other4 wise eligible for medical assistance’’. 

5 (b) FREQUENCY OF ELIGIBILITY REDETERMINA6 TIONS.—Section 1902(e)(14) of the Social Security Act 

7 (42 U.S.C. 1396a(e)(14)) is amended by adding at the 

8 end the following: 

9 ‘‘(L) FREQUENCY OF ELIGIBILITY REDE10 TERMINATIONS.—Beginning on October 1, 

11 2019, and notwithstanding subparagraph (H), 

12 in the case of an individual whose eligibility for 

13 medical assistance under the State plan under 

14 this title (or a waiver of such plan) is deter15 mined based on the application of modified ad16 justed gross income under subparagraph (A) 

17 and who is so eligible on the basis of clause 

18 (i)(VIII), (ii)(XX), or (ii)(XXIII) of subsection 

19 (a)(10)(A), at the option of the State, the State 

20 plan may provide that the individual’s eligibility 

21 shall be redetermined every 6 months (or such 

22 shorter number of months as the State may 

23 elect).’’. 


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1 SEC. 203. LOWERING SAFE HARBOR THRESHOLD WITH RE2 SPECT TO STATE TAXES ON HEALTH CARE 

3 PROVIDERS. 

4 Section 1903(w)(4)(C)(ii) of the Social Security Act 

5 (42 U.S.C. 1396b(w)(4)(C)(ii)) is amended— 

6 (1) by striking ‘‘of fiscal years beginning’’ and 

7 inserting ‘‘of fiscal years— 

8 ‘‘(I) beginning’’; and 

9 (2) by striking ‘‘it appears.’’ and inserting the 

10 following: ‘‘it appears; 

11 ‘‘(II) beginning on or after January 1, 

12 2020, and before January 1, 2030, ‘4 percent’ 

13 shall be substituted for ‘6 percent’ each place it 

14 appears; 

15 ‘‘(III) beginning on or after January 1, 

16 2030, and before January 1, 2035, ‘3 percent’ 

17 shall be substituted for ‘6 percent’ each place it 

18 appears; 

19 ‘‘(IV) beginning on or after January 1, 

20 2035, and before January 1, 2040, ‘2 percent’ 

21 shall be substituted for ‘6 percent’ each place it 

22 appears; 

23 ‘‘(V) beginning on or after January 1, 

24 2040, and before January 1, 2045, ‘1 percent’ 

25 shall be substituted for ‘6 percent’ each place it 

26 appears; and 


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1 ‘‘(VI) beginning on or after January 1, 

2 2045, ‘0 percent’ shall be substituted for ‘6 per3 cent’ each place it appears.’’. 

4 SEC. 204. INCOME LIMITATIONS FOR REFUNDABLE CRED5 ITS FOR COVERAGE UNDER A QUALIFIED 

6 HEALTH PLAN. 

7 (a) IN GENERAL.—Subparagraphs (A) and (B) of 

8 section 36B(c)(1) of the Internal Revenue Code of 1986 

9 are amended by inserting after ‘‘100 percent’’ each place 

10 such term appears the following: ‘‘(60 percent in the case 

11 of an individual enrolled through an Exchange utilized by 

12 a State that makes the election described in section 1903A 

13 of the Social Security Act)’’. 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply with respect to taxable years begin16 ning after the date of the enactment of this Act. 

17 Subtitle B—Medicare 

18 SEC. 221. OFF-CAMPUS PROVIDER-BASED DEPARTMENT 

19 MEDICARE SITE NEUTRAL PAYMENT. 

20 (a) IN GENERAL.—Section 1834 of the Social Secu21 rity Act (42 U.S.C. 1395m) is amended by adding at the 

22 end the following new subsection: 

23 ‘‘(x) OFF-CAMPUS PROVIDER-BASED DEPARTMENT

24 SITE NEUTRAL PAYMENT.— 


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1 ‘‘(1) IN GENERAL.—With respect to items and 

2 services furnished in an off-campus provider-based 

3 department, payment under this section for such 

4 items and services shall be the amount determined 

5 under the fee schedule under section 1848 for such 

6 items and services furnished if furnished in a physi7 cian office setting. 

8 ‘‘(2) OFF-CAMPUS PROVIDER-BASED DEPART9 MENT.—For purposes of this subsection, the term 

10 ‘off-campus provider-based department’ has such 

11 meaning as specified by the Secretary.’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 subsection (a) shall apply with respect to items and serv14 ices furnished on or after January 1, 2021. 

15 SEC. 222. ELIMINATION OF MEDICARE ELIGIBILITY FOR 

16 CERTAIN INDIVIDUALS. 

17 (a) ENROLLMENT PROHIBITION.— 

18 (1) PART B.—Section 1836 of the Social Secu19 rity Act (42 U.S.C. 1395o) is amended by striking 

20 the period at the end and inserting ‘‘, except that an 

21 individual who attains age 65 on or after January 

22 1, 2030, and is an individual who, upon attaining 

23 such age, has earned $10,000,000 or more in life24 time wages, shall not be eligible to so enroll.’’. 


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1 (2) PART D.—Section 1860D–1(a)(3)(A) of 

2 such Act (42 U.S.C. 1395w–101(a)(3)(A)) is amend3 ed by striking the period at the end and inserting 

4 ‘‘, excluding an individual who, upon attaining age 

5 65, has earned $10,000,000 or more in lifetime 

6 wages.’’. 

7 (b) MEDIGAP.—Section 1882 of the Social Security 

8 Act (42 U.S.C. 1395ss) is amended by adding at the end 

9 the following new subsection: 

10 ‘‘(aa) ADDITIONAL LIMITATION ON NEWLY ELIGI11 BLE BENEFICIARIES.— 

12 ‘‘(1) IN GENERAL.—Notwithstanding any other 

13 provision of this section, on or after January 1, 

14 2030, a medicare supplemental policy may not be 

15 sold or issued to a targeted newly eligible Medicare 

16 beneficiary. 

17 ‘‘(2) TARGETED NEWLY ELIGIBLE MEDICARE

18 BENEFICIARY.—For purposes of this subsection, the 

19 term ‘targeted newly eligible Medicare beneficiary’ 

20 means an individual who, upon attaining the age of 

21 65, has earned $10,000,000 or more in lifetime 

22 wages.’’. 

23 SEC. 223. MEDICARE COVERAGE OF BAD DEBT. 

24 Section 1861(v)(1) of the Social Security Act (42 

25 U.S.C. 1395(v)(1)) is amended— 


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1 (1) in subparagraph (T)— 

2 (A) in clause (iv), by striking ‘‘and’’ at the 

3 end; 

4 (B) in clause (v)— 

5 (i) by striking ‘‘during fiscal year’’ 

6 and inserting ‘‘during fiscal years’’; 

7 (ii) by striking ‘‘or a subsequent fiscal 

8 year’’ and inserting ‘‘through 2020’’; and 

9 (iii) by striking the period at the end 

10 and inserting ‘‘, and’’; and 

11 (C) by adding at the end the following new 

12 clause: 

13 ‘‘(vi) for cost reporting periods beginning dur14 ing fiscal year 2021 or a subsequent fiscal year, by 

15 the percent applicable for cost reporting periods be16 ginning during the previous fiscal year, increased 

17 (through fiscal year 2024) by 10 percentage 

18 points.’’; 

19 (2) in subparagraph (V)— 

20 (A) in clause (i)— 

21 (i) in subclause (III), by striking 

22 ‘‘and’’ at the end; 

23 (ii) in subclause (IV)— 


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1 (I) by striking ‘‘during fiscal 

2 year’’ and inserting ‘‘during fiscal 

3 years 2015 through 2020’’; and 

4 (II) by striking the period at the 

5 end and inserting ‘‘; and’’; and 

6 (iii) by adding at the end the fol7 lowing new subclause: 

8 ‘‘(V) for cost reporting periods beginning 

9 during fiscal year 2021 or a subsequent fiscal 

10 year, the percent applicable for cost reporting 

11 periods beginning during the previous fiscal 

12 year, increased (through fiscal year 2024) by 

13 10 percentage points.’’; and 

14 (B) in clause (ii)— 

15 (i) in subclause (III), by striking 

16 ‘‘and’’ at the end; and 

17 (ii) in subclause (IV)— 

18 (I) by striking ‘‘a subsequent fis19 cal year’’ and inserting ‘‘fiscal years 

20 2015 through 2020’’; 

21 (II) by striking the period at the 

22 end and inserting ‘‘; and’’; and 

23 (III) by adding at the end the 

24 following new subclause: 


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1 ‘‘(V) for cost reporting periods beginning 

2 during fiscal year 2021 or a subsequent fiscal 

3 year, shall be reduced by the percent applicable 

4 for cost reporting periods beginning during the 

5 previous fiscal year, increased (through fiscal 

6 year 2024) by 10 percentage points.’’; and 

7 (3) in subparagraph (W)(i)— 

8 (A) in subclause (II), by striking ‘‘and’’ at 

9 the end; 

10 (B) in subclause (III)— 

11 (i) by striking ‘‘during a subsequent 

12 fiscal year’’ and inserting ‘‘during fiscal 

13 years 2015 through 2020’’; and 

14 (ii) by striking the period at the end 

15 and inserting ‘‘; and’’; and 

16 (C) by adding at the end the following new 

17 subclause: 

18 ‘‘(IV) for cost reporting periods beginning dur19 ing fiscal year 2021 or a subsequent fiscal year, by 

20 the percent applicable for cost reporting periods be21 ginning during the previous fiscal year, increased 

22 (through fiscal year 2024) by 10 percentage 

23 points.’’. 


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1 Subtitle C—Medical Malpractice 

2 Reform 

3 SEC. 231. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 

4 (a) STATUTE OF LIMITATIONS.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the time for the commencement of a 

7 health care lawsuit shall be, whichever occurs first of 

8 the following: 

9 (A) Three years after the date of the oc10 currence of the breach or tort. 

11 (B) Three years after the date the medical 

12 or health care treatment that is the subject of 

13 the claim is completed. 

14 (C) One year after the claimant discovers, 

15 or through the use of reasonable diligence 

16 should have discovered, the injury. 

17 (2) TOLLING.—In no event shall the time for 

18 commencement of a health care lawsuit exceed 3 

19 years after the date of the occurrence of the breach 

20 or tort or 3 years after the date the medical or 

21 health care treatment that is the subject of the claim 

22 is completed (whichever occurs first) unless tolled 

23 for any of the following— 

24 (A) upon proof of fraud; 

25 (B) intentional concealment; or 


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1 (C) the presence of a foreign body, which 

2 has no therapeutic or diagnostic purpose or ef3 fect, in the person of the injured person. 

4 (3) ACTIONS BY A MINOR.—Actions by a minor 

5 shall be commenced within 3 years after the date of 

6 the occurrence of the breach or tort or 3 years after 

7 the date of the medical or health care treatment that 

8 is the subject of the claim is completed (whichever 

9 occurs first) except that actions by a minor under 

10 the full age of 6 years shall be commenced within 3 

11 years after the date of the occurrence of the breach 

12 or tort, 3 years after the date of the medical or 

13 health care treatment that is the subject of the claim 

14 is completed, or 1 year after the injury is discovered, 

15 or through the use of reasonable diligence should 

16 have been discovered, or prior to the minor’s 8th 

17 birthday, whichever provides a longer period. Such 

18 time limitation shall be tolled for minors for any pe19 riod during which a parent or guardian and a health 

20 care provider have committed fraud or collusion in 

21 the failure to bring an action on behalf of the in22 jured minor. 

23 (b) STATE FLEXIBILITY.—No provision of subsection 

24 (a) shall be construed to preempt any State law (whether 


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1 effective before, on, or after the date of the enactment of 

2 this Act) that— 

3 (1) specifies a time period of less than 3 years 

4 after the date of injury or less than 1 year after the 

5 claimant discovers, or through the use of reasonable 

6 diligence should have discovered, the injury, for the 

7 filing of a health care lawsuit; 

8 (2) that specifies a different time period for the 

9 filing of lawsuits by a minor; 

10 (3) that triggers the time period based on the 

11 date of the alleged negligence; or 

12 (4) establishes a statute of repose for the filing 

13 of a health care lawsuit. 

14 SEC. 232. COMPENSATING PATIENT INJURY. 

15 (a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL

16 ECONOMIC LOSSES IN HEALTH CARE LAWSUITS.—In any 

17 health care lawsuit, nothing in this Act shall limit a claim18 ant’s recovery of the full amount of the available economic 

19 damages, notwithstanding the limitation in subsection (b). 

20 (b) ADDITIONAL NONECONOMIC DAMAGES.—In any 

21 health care lawsuit, the amount of noneconomic damages, 

22 if available, shall not exceed $250,000, regardless of the 

23 number of parties against whom the action is brought or 

24 the number of separate claims or actions brought with re25 spect to the same injury. 


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1 (c) NO DISCOUNT OF AWARD FOR NONECONOMIC

2 DAMAGES.—For purposes of applying the limitation in 

3 subsection (b), future noneconomic damages shall not be 

4 discounted to present value. The jury shall not be in5 formed about the maximum award for noneconomic dam6 ages. An award for noneconomic damages in excess of 

7 $250,000 shall be reduced either before the entry of judg8 ment, or by amendment of the judgment after entry of 

9 judgment, and such reduction shall be made before ac10 counting for any other reduction in damages required by 

11 law. If separate awards are rendered for past and future 

12 noneconomic damages and the combined awards exceed 

13 $250,000, the future noneconomic damages shall be re14 duced first. 

15 (d) FAIR SHARE RULE.—In any health care lawsuit, 

16 each party shall be liable for that party’s several share 

17 of any damages only and not for the share of any other 

18 person. Each party shall be liable only for the amount of 

19 damages allocated to such party in direct proportion to 

20 such party’s percentage of responsibility. Whenever a 

21 judgment of liability is rendered as to any party, a sepa22 rate judgment shall be rendered against each such party 

23 for the amount allocated to such party. For purposes of 

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1 tion of responsibility of each party for the claimant’s 

2 harm. 

3 (e) STATE FLEXIBILITY.—No provision of this sec4 tion shall be construed to preempt any State law (whether 

5 effective before, on, or after the date of the enactment of 

6 this Act) that specifies a particular monetary amount of 

7 economic or noneconomic damages (or the total amount 

8 of damages) that may be awarded in a health care lawsuit, 

9 regardless of whether such monetary amount is greater 

10 or lesser than is provided for under this section. 

11 SEC. 233. MAXIMIZING PATIENT RECOVERY. 

12 (a) COURT SUPERVISION OF SHARE OF DAMAGES

13 ACTUALLY PAID TO CLAIMANTS.—In any health care law14 suit, the court shall supervise the arrangements for pay15 ment of damages to protect against conflicts of interest 

16 that may have the effect of reducing the amount of dam17 ages awarded that are actually paid to claimants. In par18 ticular, in any health care lawsuit in which the attorney 

19 for a party claims a financial stake in the outcome by vir20 tue of a contingent fee, the court shall have the power 

21 to restrict the payment of a claimant’s damage recovery 

22 to such attorney, and to redirect such damages to the 

23 claimant based upon the interests of justice and principles 

24 of equity. In no event shall the total of all contingent fees 


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1 for representing all claimants in a health care lawsuit ex2 ceed the following limits: 

3 (1) Forty percent of the first $50,000 recovered 

4 by the claimant(s). 

5 (2) Thirty-three and one-third percent of the 

6 next $50,000 recovered by the claimant(s). 

7 (3) Twenty-five percent of the next $500,000 

8 recovered by the claimant(s). 

9 (4) Fifteen percent of any amount by which the 

10 recovery by the claimant(s) is in excess of $600,000. 

11 (b) APPLICABILITY.—The limitations in this section 

12 shall apply whether the recovery is by judgment, settle13 ment, mediation, arbitration, or any other form of alter14 native dispute resolution. In a health care lawsuit involv15 ing a minor or incompetent person, a court retains the 

16 authority to authorize or approve a fee that is less than 

17 the maximum permitted under this section. The require18 ment for court supervision in the first two sentences of 

19 subsection (a) applies only in civil actions. 

20 (c) STATE FLEXIBILITY.—No provision of this sec21 tion shall be construed to preempt any State law (whether 

22 effective before, on, or after the date of the enactment of 

23 this Act) that specifies a lesser percentage or lesser total 

24 value of damages which may be claimed by an attorney 

25 representing a claimant in a health care lawsuit. 


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1 SEC. 234. AUTHORIZATION OF PAYMENT OF FUTURE DAM2 AGES TO CLAIMANTS IN HEALTH CARE LAW3 SUITS. 

4 (a) IN GENERAL.—In any health care lawsuit, if an 

5 award of future damages, without reduction to present 

6 value, equaling or exceeding $50,000 is made against a 

7 party with sufficient insurance or other assets to fund a 

8 periodic payment of such a judgment, the court shall, at 

9 the request of any party, enter a judgment ordering that 

10 the future damages be paid by periodic payments, in ac11 cordance with the Uniform Periodic Payment of Judg12 ments Act promulgated by the National Conference of 

13 Commissioners on Uniform State Laws. 

14 (b) APPLICABILITY.—This section applies to all ac15 tions which have not been first set for trial or retrial be16 fore the effective date of this Act. 

17 (c) STATE FLEXIBILITY.—No provision of this sec18 tion shall be construed to preempt any State law (whether 

19 effective before, on, or after the date of the enactment of 

20 this Act) that specifies periodic payments for future dam21 ages at any amount other than $50,000 or that mandates 

22 such payments absent the request of either party. 

23 SEC. 235. PRODUCT LIABILITY FOR HEALTH CARE PRO24 VIDERS. 

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1 proved, licensed, or cleared by the Food and Drug Admin2 istration shall not be named as a party to a product liabil3 ity lawsuit involving such product and shall not be liable 

4 to a claimant in a class action lawsuit against the manu5 facturer, distributor, or seller of such product. 

6 SEC. 236. DEFINITIONS. 

7 In this Act: 

8 (1) ALTERNATIVE DISPUTE RESOLUTION SYS9 TEM; ADR.—The term ‘‘alternative dispute resolution 

10 system’’ or ‘‘ADR’’ means a system that provides 

11 for the resolution of health care lawsuits in a man12 ner other than through a civil action brought in a 

13 State or Federal court. 

14 (2) CLAIMANT.—The term ‘‘claimant’’ means 

15 any person who brings a health care lawsuit, includ16 ing a person who asserts or claims a right to legal 

17 or equitable contribution, indemnity, or subrogation, 

18 arising out of a health care liability claim or action, 

19 and any person on whose behalf such a claim is as20 serted or such an action is brought, whether de21 ceased, incompetent, or a minor. 

22 (3) COLLATERAL SOURCE BENEFITS.—The 

23 term ‘‘collateral source benefits’’ means any amount 

24 paid or reasonably likely to be paid in the future to 

25 or on behalf of the claimant, or any service, product, 


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1 or other benefit provided or reasonably likely to be 

2 provided in the future to or on behalf of the claim3 ant, as a result of the injury or wrongful death, pur4 suant to— 

5 (A) any State or Federal health, sickness, 

6 income-disability, accident, or workers’ com7 pensation law; 

8 (B) any health, sickness, income-disability, 

9 or accident insurance that provides health bene10 fits or income-disability coverage; 

11 (C) any contract or agreement of any 

12 group, organization, partnership, or corporation 

13 to provide, pay for, or reimburse the cost of 

14 medical, hospital, dental, or income-disability 

15 benefits; and 

16 (D) any other publicly or privately funded 

17 program. 

18 (4) CONTINGENT FEE.—The term ‘‘contingent 

19 fee’’ includes all compensation to any person or per20 sons which is payable only if a recovery is effected 

21 on behalf of one or more claimants. 

22 (5) ECONOMIC DAMAGES.—The term ‘‘economic 

23 damages’’ means objectively verifiable monetary 

24 losses incurred as a result of the provision or use of 

25 (or failure to provide or use) health care services or 


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1 medical products, such as past and future medical 

2 expenses, loss of past and future earnings, cost of 

3 obtaining domestic services, loss of employment, and 

4 loss of business or employment opportunities, unless 

5 otherwise defined under applicable State law. In no 

6 circumstances shall damages for health care services 

7 or medical products exceed the amount actually paid 

8 or incurred by or on behalf of the claimant. 

9 (6) FUTURE DAMAGES.—The term ‘‘future 

10 damages’’ means any damages that are incurred 

11 after the date of judgment, settlement, or other reso12 lution (including mediation, or any other form of al13 ternative dispute resolution). 

14 (7) HEALTH CARE LAWSUIT.—The term 

15 ‘‘health care lawsuit’’ means any health care liability 

16 claim concerning the provision of goods or services 

17 for which coverage was provided in whole or in part 

18 via a Federal program, subsidy or tax benefit, or 

19 any health care liability action concerning the provi20 sion of goods or services for which coverage was pro21 vided in whole or in part via a Federal program, 

22 subsidy or tax benefit, brought in a State or Federal 

23 court or pursuant to an alternative dispute resolu24 tion system, against a health care provider regard25 less of the theory of liability on which the claim is 


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1 based, or the number of claimants, plaintiffs, de2 fendants, or other parties, or the number of claims 

3 or causes of action, in which the claimant alleges a 

4 health care liability claim. Such term does not in5 clude a claim or action which is based on criminal 

6 liability; which seeks civil fines or penalties paid to 

7 Federal, State, or local government; or which is 

8 grounded in antitrust. 

9 (8) HEALTH CARE LIABILITY ACTION.—The 

10 term ‘‘health care liability action’’ means a civil ac11 tion brought in a State or Federal court or pursuant 

12 to an alternative dispute resolution system, against 

13 a health care provider regardless of the theory of li14 ability on which the claim is based, or the number 

15 of plaintiffs, defendants, or other parties, or the 

16 number of causes of action, in which the claimant al17 leges a health care liability claim. 

18 (9) HEALTH CARE LIABILITY CLAIM.—The 

19 term ‘‘health care liability claim’’ means a demand 

20 by any person, whether or not pursuant to ADR, 

21 against a health care provider, including, but not 

22 limited to, third-party claims, cross-claims, counter23 claims, or contribution claims, which are based upon 

24 the provision or use of (or the failure to provide or 

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1 gardless of the theory of liability on which the claim 

2 is based, or the number of plaintiffs, defendants, or 

3 other parties, or the number of causes of action. 

4 (10) HEALTH CARE PROVIDER.—The term 

5 ‘‘health care provider’’ means any person or entity 

6 required by State or Federal laws or regulations to 

7 be licensed, registered, or certified to provide health 

8 care services, and being either so licensed, reg9 istered, or certified, or exempted from such require10 ment by other statute or regulation, as well as any 

11 other individual or entity defined as a health care 

12 provider, health care professional, or health care in13 stitution under State law. 

14 (11) HEALTH CARE SERVICES.—The term 

15 ‘‘health care services’’ means the provision of any 

16 goods or services (including safety, professional, or 

17 administrative services directly related to health 

18 care) by a health care provider, or by any individual 

19 working under the supervision of a health care pro20 vider, that relates to the diagnosis, prevention, or 

21 treatment of any human disease or impairment, or 

22 the assessment or care of the health of human 

23 beings. 

24 (12) MEDICAL PRODUCT.—The term ‘‘medical 

25 product’’ means a drug, device, or biological product 


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1 intended for humans, and the terms ‘‘drug’’, ‘‘de2 vice’’, and ‘‘biological product’’ have the meanings 

3 given such terms in sections 201(g)(1) and 201(h) 

4 of the Federal Food, Drug and Cosmetic Act (21 

5 U.S.C. 321(g)(1) and (h)) and section 351(a) of the 

6 Public Health Service Act (42 U.S.C. 262(a)), re7 spectively, including any component or raw material 

8 used therein, but excluding health care services. 

9 (13) NONECONOMIC DAMAGES.—The term 

10 ‘‘noneconomic damages’’ means damages for phys11 ical and emotional pain, suffering, inconvenience, 

12 physical impairment, mental anguish, disfigurement, 

13 loss of enjoyment of life, loss of society and compan14 ionship, loss of consortium (other than loss of do15 mestic service), hedonic damages, injury to reputa16 tion, and all other nonpecuniary losses of any kind 

17 or nature incurred as a result of the provision or use 

18 of (or failure to provide or use) health care services 

19 or medical products, unless otherwise defined under 

20 applicable State law. 

21 (14) RECOVERY.—The term ‘‘recovery’’ means 

22 the net sum recovered after deducting any disburse23 ments or costs incurred in connection with prosecu24 tion or settlement of the claim, including all costs 

25 paid or advanced by any person. Costs of health care 


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1 incurred by the plaintiff and the attorneys’ office 

2 overhead costs or charges for legal services are not 

3 deductible disbursements or costs for such purpose. 

4 (15) REPRESENTATIVE.—The term ‘‘represent5 ative’’ means a legal guardian, attorney, person des6 ignated to make decisions on behalf of a patient 

7 under a medical power of attorney, or any person 

8 recognized in law or custom as a patient’s agent. 

9 (16) STATE.—The term ‘‘State’’ means each of 

10 the several States, the District of Columbia, the 

11 Commonwealth of Puerto Rico, the Virgin Islands, 

12 Guam, American Samoa, the Northern Mariana Is13 lands, the Trust Territory of the Pacific Islands, and 

14 any other territory or possession of the United 

15 States, or any political subdivision thereof. 

16 SEC. 237. EFFECT ON OTHER LAWS. 

17 (a) VACCINE INJURY.— 

18 (1) To the extent that title XXI of the Public 

19 Health Service Act establishes a Federal rule of law 

20 applicable to a civil action brought for a vaccine-re21 lated injury or death— 

22 (A) this Act does not affect the application 

23 of the rule of law to such an action; and 


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1 (B) any rule of law prescribed by this sub2 title in conflict with a rule of law of such title 

3 XXI shall not apply to such action. 

4 (2) If there is an aspect of a civil action 

5 brought for a vaccine-related injury or death to 

6 which a Federal rule of law under title XXI of the 

7 Public Health Service Act does not apply, then this 

8 subtitle or otherwise applicable law (as determined 

9 under this subtitle) will apply to such aspect of such 

10 action. 

11 (b) OTHER FEDERAL LAW.—Except as provided in 

12 this section, nothing in this subtitle shall be deemed to 

13 affect any defense available to a defendant in a health care 

14 lawsuit or action under any other provision of Federal law. 

15 SEC. 238. RULES OF CONSTRUCTION. 

16 (a) HEALTH CARE LAWSUITS.—Unless otherwise 

17 specified in this subtitle, the provisions governing health 

18 care lawsuits set forth in this subtitle preempt, subject to 

19 subsections (b) and (c), State law to the extent that State 

20 law prevents the application of any provisions of law estab21 lished by or under this subtitle. The provisions governing 

22 health care lawsuits set forth in this subtitle supersede 

23 chapter 171 of title 28, United States Code, to the extent 

24 that such chapter— 


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1 (1) provides for a greater amount of damages 

2 or contingent fees, a longer period in which a health 

3 care lawsuit may be commenced, or a reduced appli4 cability or scope of periodic payment of future dam5 ages, than provided in this subtitle; or 

6 (2) prohibits the introduction of evidence re7 garding collateral source benefits, or mandates or 

8 permits subrogation or a lien on collateral source 

9 benefits. 

10 (b) PROTECTION OF STATES’ RIGHTS AND OTHER

11 LAWS.—Any issue that is not governed by any provision 

12 of law established by or under this subtitle (including 

13 State standards of negligence) shall be governed by other14 wise applicable State or Federal law. 

15 (c) STATE FLEXIBILITY.—No provision of this sub16 title shall be construed to preempt any defense available 

17 to a party in a health care lawsuit under any other provi18 sion of State or Federal law. 

19 SEC. 239. EFFECTIVE DATE. 

20 This subtitle shall apply to any health care lawsuit 

21 brought in a Federal or State court, or subject to an alter22 native dispute resolution system, that is initiated on or 

23 after the date of the enactment of this subtitle, except that 

24 any health care lawsuit arising from an injury occurring 

25 prior to the date of the enactment of this subtitle shall 


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1 be governed by the applicable statute of limitations provi2 sions in effect at the time the cause of action accrued. 

3 SEC. 240. LIMITATION ON EXPERT WITNESS TESTIMONY. 

4 (a) IN GENERAL.—No person in a health care profes5 sion requiring licensure under the laws of a State shall 

6 be competent to testify in any court of law to establish 

7 the following facts— 

8 (1) the recognized standard of acceptable pro9 fessional practice and the specialty thereof, if any, 

10 that the defendant practices, which shall be the type 

11 of acceptable professional practice recognized in the 

12 defendant’s community or in a community similar to 

13 the defendant’s community that was in place at the 

14 time the alleged injury or wrongful action occurred; 

15 (2) that the defendant acted with less than or 

16 failed to act with ordinary and reasonable care in ac17 cordance with the recognized standard; and 

18 (3) that as a proximate result of the defend19 ant’s negligent act or omission, the claimant suf20 fered injuries which would not otherwise have oc21 curred, 

22 unless the person was licensed to practice, in the State 

23 or a contiguous bordering State, a profession or specialty 

24 which would make the person’s expert testimony relevant 

25 to the issues in the case and had practiced this profession 


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1 or specialty in one of these States during the year pre2 ceding the date that the alleged injury or wrongful act 

3 occurred. 

4 (b) APPLICABILITY.—The requirements set forth in 

5 subsection (a) shall also apply to expert witnesses testi6 fying for the defendant as rebuttal witnesses. 

7 (c) WAIVER AUTHORITY.—The court may waive the 

8 requirements in this subsection if it determines that the 

9 appropriate witnesses otherwise would not be available. 

10 SEC. 241. COMMUNICATIONS FOLLOWING UNANTICIPATED 

11 OUTCOME. 

12 (a) PROVIDER COMMUNICATIONS.—In any health 

13 care liability action, any and all statements, affirmations, 

14 gestures, or conduct expressing apology, fault, sympathy, 

15 commiseration, condolence, compassion, or a general sense 

16 of benevolence which are made by a health care provider 

17 or an employee of a health care provider to the patient, 

18 a relative of the patient, or a representative of the patient 

19 and which relate to the discomfort, pain, suffering, injury, 

20 or death of the patient as the result of the unanticipated 

21 outcome of medical care shall be inadmissible for any pur22 pose as evidence of an admission of liability or as evidence 

23 of an admission against interest. 

24 (b) STATE FLEXIBILITY.—No provision of this sec25 tion shall be construed to preempt any State law (whether 


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1 effective before, on, or after the date of the enactment of 

2 this Act) that makes additional communications inadmis3 sible as evidence of an admission of liability or as evidence 

4 of an admission against interest. 

5 SEC. 242. EXPERT WITNESS QUALIFICATIONS. 

6 (a) IN GENERAL.—In any health care lawsuit, an in7 dividual shall not give expert testimony on the appropriate 

8 standard of practice or care involved unless the individual 

9 is licensed as a health professional in one or more States 

10 and the individual meets the following criteria: 

11 (1) If the party against whom or on whose be12 half the testimony is to be offered is or claims to be 

13 a specialist, the expert witness shall specialize at the 

14 time of the occurrence that is the basis for the law15 suit in the same specialty or claimed specialty as the 

16 party against whom or on whose behalf the testi17 mony is to be offered. If the party against whom or 

18 on whose behalf the testimony is to be offered is or 

19 claims to be a specialist who is board certified, the 

20 expert witness shall be a specialist who is board cer21 tified in that specialty or claimed specialty. 

22 (2) During the 1-year period immediately pre23 ceding the occurrence of the action that gave rise to 

24 the lawsuit, the expert witness shall have devoted a 


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1 majority of the individual’s professional time to one 

2 or more of the following: 

3 (A) The active clinical practice of the same 

4 health profession as the defendant and, if the 

5 defendant is or claims to be a specialist, in the 

6 same specialty or claimed specialty. 

7 (B) The instruction of students in an ac8 credited health professional school or accredited 

9 residency or clinical research program in the 

10 same health profession as the defendant and, if 

11 the defendant is or claims to be a specialist, in 

12 an accredited health professional school or ac13 credited residency or clinical research program 

14 in the same specialty or claimed specialty. 

15 (3) If the defendant is a general practitioner, 

16 the expert witness shall have devoted a majority of 

17 the witness’s professional time in the 1-year period 

18 preceding the occurrence of the action giving rise to 

19 the lawsuit to one or more of the following: 

20 (A) Active clinical practice as a general 

21 practitioner. 

22 (B) Instruction of students in an accred23 ited health professional school or accredited 

24 residency or clinical research program in the 

25 same health profession as the defendant. 


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1 (b) LAWSUITS AGAINST ENTITIES.—If the defendant 

2 in a health care lawsuit is an entity that employs a person 

3 against whom or on whose behalf the testimony is offered, 

4 the provisions of subsection (a) apply as if the person were 

5 the party or defendant against whom or on whose behalf 

6 the testimony is offered. 

7 (c) POWER OF COURT.—Nothing in this subsection 

8 shall limit the power of the trial court in a health care 

9 lawsuit to disqualify an expert witness on grounds other 

10 than the qualifications set forth under this subsection. 

11 (d) LIMITATION.—An expert witness in a health care 

12 lawsuit shall not be permitted to testify if the fee of the 

13 witness is in any way contingent on the outcome of the 

14 lawsuit. 

15 (e) STATE FLEXIBILITY.—No provision of this sec16 tion shall be construed to preempt any State law (whether 

17 effective before, on, or after the date of the enactment of 

18 this Act) that places additional qualification requirements 

19 upon any individual testifying as an expert witness. 

20 SEC. 243. AFFIDAVIT OF MERIT. 

21 (a) REQUIRED FILING.—Subject to subsection (b), 

22 the plaintiff in a health care lawsuit alleging negligence 

23 or, if the plaintiff is represented by an attorney, the plain24 tiff’s attorney shall file simultaneously with the health 

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1 fessional who meets the requirements for an expert wit2 ness under section 242 of this Act. The affidavit of merit 

3 shall certify that the health professional has reviewed the 

4 notice and all medical records supplied to him or her by 

5 the plaintiff’s attorney concerning the allegations con6 tained in the notice and shall contain a statement of each 

7 of the following: 

8 (1) The applicable standard of practice or care. 

9 (2) The health professional’s opinion that the 

10 applicable standard of practice or care was breached 

11 by the health professional or health facility receiving 

12 the notice. 

13 (3) The actions that should have been taken or 

14 omitted by the health professional or health facility 

15 in order to have complied with the applicable stand16 ard of practice or care. 

17 (4) The manner in which the breach of the 

18 standard of practice or care was the proximate cause 

19 of the injury alleged in the notice. 

20 (5) A listing of the medical records reviewed. 

21 (b) FILING EXTENSION.—Upon motion of a party for 

22 good cause shown, the court in which the complaint is filed 

23 may grant the plaintiff or, if the plaintiff is represented 

24 by an attorney, the plaintiff’s attorney an additional 28 


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1 days in which to file the affidavit required under sub2 section (a). 

3 (c) STATE FLEXIBILITY.—No provision of this sec4 tion shall be construed to preempt any State law (whether 

5 effective before, on, or after the date of the enactment of 

6 this Act) that establishes additional requirements for the 

7 filing of an affidavit of merit or similar pre-litigation docu8 mentation. 

9 SEC. 244. NOTICE OF INTENT TO COMMENCE LAWSUIT. 

10 (a) ADVANCE NOTICE.—A person shall not com11 mence a health care lawsuit against a health care provider 

12 unless the person has given the health care provider 90 

13 days written notice before the action is commenced. 

14 (b) EXCEPTIONS.—A health care lawsuit against a 

15 health care provider filed within 6 months of the statute 

16 of limitations expiring as to any claimant, or within 1 year 

17 of the statute of repose expiring as to any claimant, shall 

18 be exempt from compliance with this section. 

19 (c) STATE FLEXIBILITY.—No provision of this sec20 tion shall be construed to preempt any State law (whether 

21 effective before, on, or after the date of the enactment of 

22 this Act) that establishes a different time period for the 

23 filing of written notice. 


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1 TITLE III—PRESCRIPTION DRUG 

2 COMPETITION 

3 Subtitle A—Eliminating Delays of 

4 Generic Drugs and Biosimilar 

5 Products 

6 SEC. 301. ACTIONS FOR DELAYS OF GENERIC DRUGS AND 

7 BIOSIMILAR BIOLOGICAL PRODUCTS. 

8 (a) DEFINITIONS.—In this section— 

9 (1) the term ‘‘covered product’’— 

10 (A) means— 

11 (i) any drug approved under sub12 section (b) or (j) of section 505 of the Fed13 eral Food, Drug, and Cosmetic Act (21 

14 U.S.C. 355) or biological product licensed 

15 under subsection (a) or (k) of section 351 

16 of the Public Health Service Act (42 

17 U.S.C. 262); 

18 (ii) any combination of a drug or bio19 logical product described in clause (i); or 

20 (iii) when reasonably necessary to 

21 demonstrate sameness, biosimilarity, or 

22 interchangeability for purposes of section 

23 505 of the Federal Food, Drug, and Cos24 metic Act (21 U.S.C. 355), or section 351 

25 of the Public Health Service Act (42 


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1 U.S.C. 262), as applicable, any product, 

2 including any device, that is marketed or 

3 intended for use with such drug or biologi4 cal product; and 

5 (B) does not include any drug or biological 

6 product that the Secretary has determined to be 

7 currently in shortage and that appears on the 

8 drug shortage list in effect under section 506E 

9 of the Federal Food, Drug, and Cosmetic Act 

10 (21 U.S.C. 356e), unless the shortage will not 

11 be promptly resolved— 

12 (i) as demonstrated by the fact that 

13 the drug or biological product has been in 

14 shortage for more than 6 months; or 

15 (ii) as otherwise determined by the 

16 Secretary; 

17 (2) the term ‘‘device’’ has the meaning given 

18 the term in section 201 of the Federal Food, Drug, 

19 and Cosmetic Act (21 U.S.C. 321); 

20 (3) the term ‘‘eligible product developer’’ means 

21 a person that seeks to develop a product for ap22 proval pursuant to an application for approval under 

23 subsection (b)(2) or (j) of section 505 of the Federal 

24 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 

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1 tion 351(k) of the Public Health Service Act (42 

2 U.S.C. 262(k)); 

3 (4) the term ‘‘license holder’’ means the holder 

4 of an application approved under subsection (c) or 

5 (j) of section 505 of the Federal Food, Drug, and 

6 Cosmetic Act (21 U.S.C. 355) or the holder of a li7 cense under subsection (a) or (k) of section 351 of 

8 the Public Health Service Act (42 U.S.C. 262) for 

9 a covered product; 

10 (5) the term ‘‘REMS’’ means a risk evaluation 

11 and mitigation strategy under section 505–1 of the 

12 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

13 355–1); 

14 (6) the term ‘‘REMS with ETASU’’ means a 

15 REMS that contains elements to assure safe use 

16 under section 505–1 of the Federal Food, Drug, and 

17 Cosmetic Act (21 U.S.C. 355–1); 

18 (7) the term ‘‘Secretary’’ means the Secretary 

19 of Health and Human Services; 

20 (8) the term ‘‘single, shared system of elements 

21 to assure safe use’’ means a single, shared system 

22 of elements to assure safe use under section 505–1 

23 of the Federal Food, Drug, and Cosmetic Act (21 

24 U.S.C. 355–1); and 


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1 (9) the term ‘‘sufficient quantities’’ means an 

2 amount of a covered product that allows the eligible 

3 product developer to— 

4 (A) conduct testing to support an applica5 tion— 

6 (i) for approval under subsection 

7 (b)(2) or (j) of section 505 of the Federal 

8 Food, Drug, and Cosmetic Act (21 U.S.C. 

9 355); or 

10 (ii) for licensing under section 351(k) 

11 of the Public Health Service Act (42 

12 U.S.C. 262(k)); and 

13 (B) fulfill any regulatory requirements re14 lating to such an application for approval or li15 censing. 

16 (b) CIVIL ACTION FOR FAILURE TO PROVIDE SUFFI17 CIENT QUANTITIES OF A COVERED PRODUCT.— 

18 (1) IN GENERAL.—An eligible product developer 

19 may bring a civil action against the license holder 

20 for a covered product seeking relief under this sub21 section in an appropriate district court of the United 

22 States alleging that the license holder has declined 

23 to provide sufficient quantities of the covered prod24 uct to the eligible product developer on commercially 

25 reasonable, market-based terms. 


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1 (2) ELEMENTS.— 

2 (A) IN GENERAL.—To prevail in a civil ac3 tion brought under paragraph (1), an eligible 

4 product developer shall prove, by a preponder5 ance of the evidence— 

6 (i) that— 

7 (I) the covered product is not 

8 subject to a REMS with ETASU; or 

9 (II) if the covered product is sub10 ject to a REMS with ETASU— 

11 (aa) the eligible product de12 veloper has obtained a covered 

13 product authorization from the 

14 Secretary in accordance with sub15 paragraph (B); and 

16 (bb) the eligible product de17 veloper has provided a copy of 

18 the covered product authorization 

19 to the license holder; 

20 (ii) that, as of the date on which the 

21 civil action is filed, the product developer 

22 has not obtained sufficient quantities of 

23 the covered product on commercially rea24 sonable, market-based terms; 


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1 (iii) that the eligible product developer 

2 has requested to purchase sufficient quan3 tities of the covered product from the li4 cense holder; and 

5 (iv) that the license holder has not de6 livered to the eligible product developer 

7 sufficient quantities of the covered product 

8 on commercially reasonable, market-based 

9 terms— 

10 (I) for a covered product that is 

11 not subject to a REMS with ETASU, 

12 by the date that is 31 days after the 

13 date on which the license holder re14 ceived the request for the covered 

15 product; and 

16 (II) for a covered product that is 

17 subject to a REMS with ETASU, by 

18 31 days after the later of— 

19 (aa) the date on which the 

20 license holder received the re21 quest for the covered product; or 

22 (bb) the date on which the 

23 license holder received a copy of 

24 the covered product authorization 


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1 issued by the Secretary in ac2 cordance with subparagraph (B). 

3 (B) AUTHORIZATION FOR COVERED PROD4 UCT SUBJECT TO A REMS WITH ETASU.— 

5 (i) REQUEST.—An eligible product de6 veloper may submit to the Secretary a 

7 written request for the eligible product de8 veloper to be authorized to obtain suffi9 cient quantities of an individual covered 

10 product subject to a REMS with ETASU. 

11 (ii) AUTHORIZATION.—Not later than 

12 90 days after the date on which a request 

13 under clause (i) is received, the Secretary 

14 shall, by written notice, authorize the eligi15 ble product developer to obtain sufficient 

16 quantities of an individual covered product 

17 subject to a REMS with ETASU for pur18 poses of— 

19 (I) development and testing that 

20 does not involve human clinical trials, 

21 if the eligible product developer has 

22 agreed to comply with any conditions 

23 the Secretary determines necessary; or 


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1 (II) development and testing that 

2 involves human clinical trials, if the 

3 eligible product developer has— 

4 (aa)(AA) submitted proto5 cols, informed consent docu6 ments, and informational mate7 rials for testing that include pro8 tections that provide safety pro9 tections comparable to those pro10 vided by the REMS for the cov11 ered product; or 

12 (BB) otherwise satisfied the 

13 Secretary that such protections 

14 will be provided; and 

15 (bb) met any other require16 ments the Secretary may estab17 lish. 

18 (iii) NOTICE.—A covered product au19 thorization issued under this subparagraph 

20 shall state that the provision of the covered 

21 product by the license holder under the 

22 terms of the authorization will not be a 

23 violation of the REMS for the covered 

24 product. 


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1 (3) AFFIRMATIVE DEFENSE.—In a civil action 

2 brought under paragraph (1), it shall be an affirma3 tive defense, on which the defendant has the burden 

4 of persuasion by a preponderance of the evidence— 

5 (A) that, on the date on which the eligible 

6 product developer requested to purchase suffi7 cient quantities of the covered product from the 

8 license holder— 

9 (i) neither the license holder nor any 

10 of its agents, wholesalers, or distributors 

11 was engaged in the manufacturing or com12 mercial marketing of the covered product; 

13 and 

14 (ii) neither the license holder nor any 

15 of its agents, wholesalers, or distributors 

16 otherwise had access to inventory of the 

17 covered product to supply to the eligible 

18 product developer on commercially reason19 able, market-based terms; or 

20 (B) that— 

21 (i) the license holder sells the covered 

22 product through agents, distributors, or 

23 wholesalers; 

24 (ii) the license holder has placed no 

25 restrictions, explicit or implicit, on its 


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1 agents, distributors, or wholesalers to sell 

2 covered products to eligible product devel3 opers; and 

4 (iii) the covered product can be pur5 chased by the eligible product developer in 

6 sufficient quantities on commercially rea7 sonable, market-based terms from the 

8 agents, distributors, or wholesalers of the 

9 license holder. 

10 (4) REMEDIES.— 

11 (A) IN GENERAL.—If an eligible product 

12 developer prevails in a civil action brought 

13 under paragraph (1), the court shall— 

14 (i) order the license holder to provide 

15 to the eligible product developer without 

16 delay sufficient quantities of the covered 

17 product on commercially reasonable, mar18 ket-based terms; 

19 (ii) award to the eligible product de20 veloper reasonable attorney fees and costs 

21 of the civil action; and 

22 (iii) award to the eligible product de23 veloper a monetary amount sufficient to 

24 deter the license holder from failing to pro25 vide other eligible product developers with 


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1 sufficient quantities of a covered product 

2 on commercially reasonable, market-based 

3 terms, if the court finds, by a preponder4 ance of the evidence— 

5 (I) that the license holder delayed 

6 providing sufficient quantities of the 

7 covered product to the eligible product 

8 developer without a legitimate busi9 ness justification; or 

10 (II) that the license holder failed 

11 to comply with an order issued under 

12 clause (i). 

13 (B) MAXIMUM MONETARY AMOUNT.—A 

14 monetary amount awarded under subparagraph 

15 (A)(iii) shall not be greater than the revenue 

16 that the license holder earned on the covered 

17 product during the period— 

18 (i) beginning on— 

19 (I) for a covered product that is 

20 not subject to a REMS with ETASU, 

21 the date that is 31 days after the date 

22 on which the license holder received 

23 the request; or 

24 (II) for a covered product that is 

25 subject to a REMS with ETASU, the 


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1 date that is 31 days after the later 

2 of— 

3 (aa) the date on which the 

4 license holder received the re5 quest; or 

6 (bb) the date on which the 

7 license holder received a copy of 

8 the covered product authorization 

9 issued by the Secretary in ac10 cordance with paragraph (2)(B); 

11 and 

12 (ii) ending on the date on which the 

13 eligible product developer received suffi14 cient quantities of the covered product. 

15 (C) AVOIDANCE OF DELAY.—The court 

16 may issue an order under subparagraph (A)(i) 

17 before conducting further proceedings that may 

18 be necessary to determine whether the eligible 

19 product developer is entitled to an award under 

20 clause (ii) or (iii) of subparagraph (A), or the 

21 amount of any such award. 

22 (c) LIMITATION OF LIABILITY.—A license holder for 

23 a covered product shall not be liable for any claim arising 

24 out of the failure of an eligible product developer to follow 

25 adequate safeguards to assure safe use of the covered 


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1 product during development or testing activities described 

2 in this section, including transportation, handling, use, or 

3 disposal of the covered product by the eligible product de4 veloper. 

5 (d) RULE OF CONSTRUCTION.— 

6 (1) DEFINITION.—In this subsection, the term 

7 ‘‘antitrust laws’’— 

8 (A) has the meaning given the term in 

9 subsection (a) of the first section of the Clayton 

10 Act (15 U.S.C. 12); and 

11 (B) includes section 5 of the Federal 

12 Trade Commission Act (15 U.S.C. 45) to the 

13 extent that such section applies to unfair meth14 ods of competition. 

15 (2) ANTITRUST LAWS.—Nothing in this section 

16 shall be construed to limit the operation of any pro17 vision of the antitrust laws. 

18 SEC. 302. REMS APPROVAL PROCESS FOR SUBSEQUENT 

19 FILERS. 

20 Section 505–1 of the Federal Food, Drug, and Cos21 metic Act (21 U.S.C. 355–1) is amended— 

22 (1) in subsection (g)(4)(B)— 

23 (A) in clause (i) by striking ‘‘or’’ after the 

24 semicolon; 


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1 (B) in clause (ii) by striking the period at 

2 the end and inserting ‘‘; or’’; and 

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

4 ‘‘(iii) accommodate different approved 

5 risk evaluation and mitigation strategies 

6 for a reference drug product and a drug 

7 that is the subject of an abbreviated new 

8 drug application.’’; and 

9 (2) in subsection (i)(1), by striking subpara10 graph (B) and inserting the following: 

11 ‘‘(B) Elements to assure safe use, if re12 quired under subsection (f) for the listed drug 

13 in accordance with the following: 

14 ‘‘(i) Subject to clause (ii), a drug that 

15 is the subject of an abbreviated new drug 

16 application may use— 

17 ‘‘(I) a single, shared system with 

18 the listed drug under subsection (f); 

19 or 

20 ‘‘(II) a different, comparable as21 pect of the elements to assure safe use 

22 under subsection (f). 

23 ‘‘(ii) The Secretary may require a 

24 drug that is the subject of an abbreviated 

25 new drug application and the listed drug to 


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1 use a single, shared system under sub2 section (f), if the Secretary determines 

3 that no different, comparable aspect of the 

4 elements to assure safe use could satisfy 

5 the requirements of subsection (f).’’. 

6 Subtitle B—Increasing Access to 

7 Drugs and Biosimilar Products 

8 SEC. 311. EXPEDITED DEVELOPMENT AND PRIORITY RE9 VIEW FOR GENERIC COMPLEX DRUG PROD10 UCTS. 

11 Subchapter A of chapter V of the Federal Food, 

12 Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend13 ed by adding at the end the following: 

14 ‘‘SEC. 524B. EXPEDITED DEVELOPMENT AND PRIORITY RE15 VIEW FOR GENERIC COMPLEX DRUG PROD16 UCTS. 

17 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Secretary 

18 shall establish a program to expedite the development of, 

19 and provide priority review under section 505(j) for, ge20 neric complex drug products. 

21 ‘‘(b) REQUEST FOR DESIGNATION.—A sponsor of a 

22 generic complex drug product may request that the Sec23 retary designate such product for expedited development 

24 and priority review under this section. 

25 ‘‘(c) DESIGNATION PROCESS.— 


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1 ‘‘(1) IN GENERAL.—Not later than 60 calendar 

2 days after the receipt of a request under subsection 

3 (c), the Secretary shall determine whether the prod4 uct that is the subject of the request meets the cri5 teria under subsection (e) to be considered a generic 

6 complex drug product. If the Secretary determines 

7 that the product meets the criteria, the Secretary 

8 shall designate the product for expedited develop9 ment and priority review. 

10 ‘‘(2) REVIEW.—Review of a request under sub11 section (b) shall be undertaken by a team that is 

12 composed of experienced staff and senior managers 

13 of the Food and Drug Administration. 

14 ‘‘(3) WITHDRAWAL.—The Secretary may not 

15 withdraw a designation granted under this section 

16 on the basis of the criteria under subsection (e) no 

17 longer applying because of the subsequent clearance 

18 or approval of any other product. 

19 ‘‘(d) EXPEDITED DEVELOPMENT AND PRIORITY RE20 VIEW GUIDANCE.— 

21 ‘‘(1) CONTENT.—Not later than December 31, 

22 2021, the Secretary shall issue guidance on the im23 plementation of this section. Such guidance shall— 


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1 ‘‘(A) set forth the process by which a per2 son may seek a designation under subsection 

3 (c); 

4 ‘‘(B) provide a template for requests under 

5 subsection (b); 

6 ‘‘(C) identify the criteria the Secretary will 

7 use in evaluating a request for designation 

8 under this section; and 

9 ‘‘(D) identify the criteria and processes the 

10 Secretary will use to expedite the development 

11 and review of products designated under this 

12 section. 

13 ‘‘(2) PROCESS.—Prior to finalizing the guid14 ance under paragraph (1), the Secretary shall seek 

15 public comment on a draft version of that guidance. 

16 ‘‘(e) GENERIC COMPLEX DRUG PRODUCT DE17 FINED.—In this section, the term ‘generic complex drug 

18 product’ means a product that represents a complex ther19 apy that consists of or includes a drug for approval under 

20 section 505(j) and that— 

21 ‘‘(1)(A) contains complex active ingredients 

22 (such as peptides, polymeric compounds, complex 

23 mixtures of active ingredients, and naturally sourced 

24 ingredients); 


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1 ‘‘(B) is composed of complex formulations (such 

2 as liposomes or colloids); 

3 ‘‘(C) requires a complex route of delivery (such 

4 as locally acting drugs such as dermatological prod5 ucts and complex ophthalmological products and otic 

6 dosage forms that are formulated as suspensions, 

7 emulsions, or gels); or 

8 ‘‘(D) involves a complex dosage form (such as 

9 transdermals, metered dose inhalers, or extended re10 lease injectables); 

11 ‘‘(2) presents as a complex drug-device com12 bination product (such as auto injectors or metered 

13 dose inhalers); or 

14 ‘‘(3) is a product that would benefit from early 

15 scientific engagement due to complexity or uncer16 tainty concerning the approval pathway under sec17 tion 505(j).’’. 

18 SEC. 312. INCREASING PHARMACEUTICAL OPTIONS TO 

19 TREAT AN UNMET MEDICAL NEED. 

20 Subsection (b) of section 506 of the Federal Food, 

21 Drug, and Cosmetic Act (21 U.S.C. 356) is amended by 

22 adding at the end the following: 

23 ‘‘(4) UNMET MEDICAL NEED.—For purposes of 

24 paragraph (1), a drug shall be deemed to address an 

25 unmet medical need for a disease or condition if 


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1 fewer than 3 available drugs exist for the treatment 

2 of such disease or condition.’’. 

3 SEC. 313. PREEMPTION OF STATE BARRIERS TO THE SUB4 STITUTION OF BIOSIMILAR PRODUCTS. 

5 No State, or any political subdivision thereof, may, 

6 under any circumstances, prohibit a pharmacy or phar7 macist from dispensing, in place of a biological reference 

8 product, any biosimilar that the Food and Drug Adminis9 tration has designated as an interchangeable product for 

10 that biological reference product. 

11 Subtitle C—Limiting Exclusivity 

12 Periods Delaying Competition 

13 SEC. 321. LIMITING EXCLUSIVITY PERIODS FOR DRUGS 

14 TREATING RARE DISEASES AND CONDITIONS. 

15 (a) IN GENERAL.—Subsection (a) of section 527 of 

16 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

17 360cc) is amended to read as follows: 

18 ‘‘(a) EXCLUSIVITY.— 

19 ‘‘(1) IN GENERAL.—Except as provided in sub20 section (b), if the Secretary approves an application 

21 filed pursuant to section 505, or issues a license 

22 under section 351 of the Public Health Service Act, 

23 for a drug designated under section 526 for a rare 

24 disease or condition, the Secretary may not approve 

25 an application filed pursuant to section 505, or issue 


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1 a license under section 351 of the Public Health 

2 Service Act, for the same drug for the same disease 

3 or condition for a person who is not the holder of 

4 such approved application or of such license until 

5 the expiration of the exclusivity period described in 

6 paragraph (2). 

7 ‘‘(2) EXCLUSIVITY PERIOD DESCRIBED.—The 

8 exclusivity period described in this paragraph, with 

9 respect to a drug designated under section 526 for 

10 a rare disease or condition, is— 

11 ‘‘(A) a single 7-year period of exclusivity 

12 with respect to the first designation of such 

13 drug under such section for that rare disease or 

14 condition; or 

15 ‘‘(B) in the case of a drug that has pre16 viously received a period of exclusivity under 

17 paragraph (1), a single 3-year period of exclu18 sivity with respect to any subsequent designa19 tion of such drug under such section for any 

20 other rare disease or condition. 

21 ‘‘(3) LIMITATION.—In the case of a drug that 

22 has received two periods of exclusivity pursuant to 

23 paragraph (1), no additional exclusivity period under 

24 this section is available with respect to such drug, 

25 regardless of whether such drug has been designated 


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1 under section 526 for a rare disease or condition 

2 that is distinct from the rare disease or condition for 

3 which such exclusivity periods were granted.’’. 

4 (b) CONFORMING AMENDMENTS.— 

5 (1) Section 505(j)(5)(B)(iv)(II)(dd)(AA) of the 

6 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

7 360cc) is amended by striking ‘‘7-year period’’ and 

8 inserting ‘‘exclusivity period’’. 

9 (2) Section 505A(b)(1)(A)(ii) of the Federal 

10 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is 

11 amended by striking ‘‘rather than seven years;’’ and 

12 inserting ‘‘, or three years and six months, rather 

13 than seven years or three years, respectively;’’. 

14 (3) Section 505A(c)(1)(A)(ii) of the Federal 

15 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is 

16 amended by striking ‘‘rather than seven years;’’ and 

17 inserting ‘‘, or three years and six months, rather 

18 than seven years or three years, respectively;’’. 

19 (4) Section 505E(a) of the Federal Food, Drug, 

20 and Cosmetic Act (21 U.S.C. 360cc) is amended by 

21 striking ‘‘7-year period’’ and inserting ‘‘exclusivity 

22 periods’’. 

23 (5) Section 527(b) of the Federal Food, Drug, 

24 and Cosmetic Act (21 U.S.C. 360cc) is amended by 


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1 striking ‘‘the 7-year period’’ and inserting ‘‘any ex2 clusivity period’’. 

3 (6) Section 351(m)(2)(B) of the Public Health 

4 Service Act (42 U.S.C. 262) is amended by striking 

5 ‘‘rather than 7 years’’ and inserting ‘‘or 3 years and 

6 6 months, rather than 7 years or 3 years, respec7 tively’’. 

8 (7) Section 351(m)(3)(B) of the Public Health 

9 Service Act (42 U.S.C. 262) is amended by striking 

10 ‘‘rather than 7 years’’ and inserting ‘‘or 3 years and 

11 6 months, rather than 7 years or 3 years, respec12 tively’’. 

13 SEC. 322. LIMITING EXCLUSIVITY FOR BIOSIMILAR PROD14 UCTS. 

15 Paragraph (7) of section 351(k) of the Public Health 

16 Service Act (42 U.S.C. 262(k)) is amended in subpara17 graph (A), by striking ‘‘12’’ and inserting ‘‘5’’. 

18 Subtitle D—Congressional Review 

19 of Agency Rulemaking 

20 SEC. 331. CONGRESSIONAL REVIEW OF THE FOOD AND 

21 DRUG ADMINISTRATION RULEMAKING. 

22 (a) CONGRESSIONAL REVIEW.—Part I of title 5, 

23 United States Code, is amended by adding at the end the 

24 following: 


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1 ‘‘CHAPTER 10—CONGRESSIONAL REVIEW 

2 OF FOOD AND DRUG ADMINISTRATION 

3 RULEMAKING 

‘‘Sec. 

‘‘920. Applicability. 

‘‘921. Congressional review. 

‘‘922. Congressional approval procedure for major rules. 

‘‘923. Congressional disapproval procedure for nonmajor rules. 

‘‘924. Definitions. 

‘‘925. Judicial review. 

‘‘926. Exemption for monetary policy. 

‘‘927. Effective date of certain rules. 

‘‘928. Regulatory cut-go requirement. 

‘‘929. Review of rules currently in effect. 

4 ‘‘§ 920. Applicability 

5 ‘‘This chapter applies in lieu of chapter 8 with respect 

6 to the Food and Drug Administration. 

7 ‘‘§ 921. Congressional review 

8 ‘‘(a)(1)(A) Before a rule may take effect, the Food 

9 and Drug Administration shall satisfy the requirements 

10 of section 928 and shall publish in the Federal Register 

11 a list of information on which the rule is based, including 

12 data, scientific and economic studies, and cost-benefit 

13 analyses, and identify how the public can access such in14 formation online, and shall submit to each House of the 

15 Congress and to the Comptroller General a report con16 taining— 

17 ‘‘(i) a copy of the rule; 

18 ‘‘(ii) a concise general statement relating to the 

19 rule; 


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1 ‘‘(iii) a classification of the rule as a major or 

2 nonmajor rule, including an explanation of the clas3 sification specifically addressing each criteria for a 

4 major rule contained within sections 924(2)(A), 

5 924(2)(B), and 924(2)(C); 

6 ‘‘(iv) a list of any other related regulatory ac7 tions intended to implement the same statutory pro8 vision or regulatory objective as well as the indi9 vidual and aggregate economic effects of those ac10 tions; and 

11 ‘‘(v) the proposed effective date of the rule. 

12 ‘‘(B) On the date of the submission of the report 

13 under subparagraph (A), the Food and Drug Administra14 tion shall submit to the Comptroller General and make 

15 available to each House of Congress— 

16 ‘‘(i) a complete copy of the cost-benefit analysis 

17 of the rule, if any, including an analysis of any jobs 

18 added or lost, differentiating between public and pri19 vate sector jobs; 

20 ‘‘(ii) the Food and Drug Administration’s ac21 tions pursuant to sections 603, 604, 605, 607, and 

22 609 of this title; 

23 ‘‘(iii) the Food and Drug Administration’s ac24 tions pursuant to sections 202, 203, 204, and 205 

25 of the Unfunded Mandates Reform Act of 1995; and 


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1 ‘‘(iv) any other relevant information or require2 ments under any other Act and any relevant Execu3 tive orders. 

4 ‘‘(C) Upon receipt of a report submitted under sub5 paragraph (A), each House shall provide copies of the re6 port to the chairman and ranking member of each stand7 ing committee with jurisdiction under the rules of the 

8 House of Representatives or the Senate to report a bill 

9 to amend the provision of law under which the rule is 

10 issued. 

11 ‘‘(2)(A) The Comptroller General shall provide a re12 port on each major rule to the committees of jurisdiction 

13 by the end of 15 calendar days after the submission or 

14 publication date. The report of the Comptroller General 

15 shall include an assessment of the Food and Drug Admin16 istration’s compliance with procedural steps required by 

17 paragraph (1)(B) and an assessment of whether the major 

18 rule imposes any new limits or mandates on private-sector 

19 activity. 

20 ‘‘(B) The Food and Drug Administration shall co21 operate with the Comptroller General by providing infor22 mation relevant to the Comptroller General’s report under 

23 subparagraph (A). 

24 ‘‘(3) A major rule relating to a report submitted 

25 under paragraph (1) shall take effect upon enactment of 


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1 a joint resolution of approval described in section 922 or 

2 as provided for in the rule following enactment of a joint 

3 resolution of approval described in section 922, whichever 

4 is later. 

5 ‘‘(4) A nonmajor rule shall take effect as provided 

6 by section 923 after submission to Congress under para7 graph (1). 

8 ‘‘(5) If a joint resolution of approval relating to a 

9 major rule is not enacted within the period provided in 

10 subsection (b)(2), then a joint resolution of approval relat11 ing to the same rule may not be considered under this 

12 chapter in the same Congress by either the House of Rep13 resentatives or the Senate. 

14 ‘‘(b)(1) A major rule shall not take effect unless the 

15 Congress enacts a joint resolution of approval described 

16 under section 922. 

17 ‘‘(2) If a joint resolution described in subsection (a) 

18 is not enacted into law by the end of 70 session days or 

19 legislative days, as applicable, beginning on the date on 

20 which the report referred to in section 921(a)(1)(A) is re21 ceived by Congress (excluding days either House of Con22 gress is adjourned for more than 3 days during a session 

23 of Congress), then the rule described in that resolution 

24 shall be deemed not to be approved and such rule shall 

25 not take effect. 


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1 ‘‘(c)(1) Notwithstanding any other provision of this 

2 section (except subject to paragraph (3)), a major rule 

3 may take effect for one 90-calendar-day period if the 

4 President makes a determination under paragraph (2) and 

5 submits written notice of such determination to the Con6 gress. 

7 ‘‘(2) Paragraph (1) applies to a determination made 

8 by the President by Executive order that the major rule 

9 should take effect because such rule is— 

10 ‘‘(A) necessary because of an imminent threat 

11 to health or safety or other emergency; 

12 ‘‘(B) necessary for the enforcement of criminal 

13 laws; 

14 ‘‘(C) necessary for national security; or 

15 ‘‘(D) issued pursuant to any statute imple16 menting an international trade agreement. 

17 ‘‘(3) An exercise by the President of the authority 

18 under this subsection shall have no effect on the proce19 dures under section 922. 

20 ‘‘(d)(1) In addition to the opportunity for review oth21 erwise provided under this chapter, in the case of any rule 

22 for which a report was submitted in accordance with sub23 section (a)(1)(A) during the period beginning on the date 

24 occurring— 


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1 ‘‘(A) in the case of the Senate, 60 session days; 

2 or 

3 ‘‘(B) in the case of the House of Representa4 tives, 60 legislative days, 

5 before the date the Congress is scheduled to adjourn a 

6 session of Congress through the date on which the same 

7 or succeeding Congress first convenes its next session, sec8 tions 922 and 923 shall apply to such rule in the suc9 ceeding session of Congress. 

10 ‘‘(2)(A) In applying sections 922 and 923 for pur11 poses of such additional review, a rule described under 

12 paragraph (1) shall be treated as though— 

13 ‘‘(i) such rule were published in the Federal 

14 Register on— 

15 ‘‘(I) in the case of the Senate, the 15th 

16 session day; or 

17 ‘‘(II) in the case of the House of Rep18 resentatives, the 15th legislative day, 

19 after the succeeding session of Congress first con20 venes; and 

21 ‘‘(ii) a report on such rule were submitted to 

22 Congress under subsection (a)(1) on such date. 

23 ‘‘(B) Nothing in this paragraph shall be construed 

24 to affect the requirement under subsection (a)(1) that a 


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1 report shall be submitted to Congress before a rule can 

2 take effect. 

3 ‘‘(3) A rule described under paragraph (1) shall take 

4 effect as otherwise provided by law (including other sub5 sections of this section). 

6 ‘‘§ 922. Congressional approval procedure for major 

7 rules 

8 ‘‘(a)(1) For purposes of this section, the term ‘joint 

9 resolution’ means only a joint resolution addressing a re10 port classifying a rule as major pursuant to section 

11 921(a)(1)(A)(iii) that— 

12 ‘‘(A) bears no preamble; 

13 ‘‘(B) bears the following title (with blanks filled 

14 as appropriate): ‘Approving the rule submitted by 

15 lll relating to lll.’; 

16 ‘‘(C) includes after its resolving clause only the 

17 following (with blanks filled as appropriate): ‘That 

18 Congress approves the rule submitted by lll re19 lating to lll.’; and 

20 ‘‘(D) is introduced pursuant to paragraph (2). 

21 ‘‘(2) After a House of Congress receives a report 

22 classifying a rule as major pursuant to section 

23 921(a)(1)(A)(iii), the majority leader of that House (or 

24 his or her respective designee) shall introduce (by request, 


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1 if appropriate) a joint resolution described in paragraph 

2 (1)— 

3 ‘‘(A) in the case of the House of Representa4 tives, within 3 legislative days; and 

5 ‘‘(B) in the case of the Senate, within 3 session 

6 days. 

7 ‘‘(3) A joint resolution described in paragraph (1) 

8 shall not be subject to amendment at any stage of pro9 ceeding. 

10 ‘‘(b) A joint resolution described in subsection (a) 

11 shall be referred in each House of Congress to the commit12 tees having jurisdiction over the provision of law under 

13 which the rule is issued. 

14 ‘‘(c) In the Senate, if the committee or committees 

15 to which a joint resolution described in subsection (a) has 

16 been referred have not reported it at the end of 15 session 

17 days after its introduction, such committee or committees 

18 shall be automatically discharged from further consider19 ation of the resolution and it shall be placed on the cal20 endar. A vote on final passage of the resolution shall be 

21 taken on or before the close of the 15th session day after 

22 the resolution is reported by the committee or committees 

23 to which it was referred, or after such committee or com24 mittees have been discharged from further consideration 

25 of the resolution. 


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1 ‘‘(d)(1) In the Senate, when the committee or com2 mittees to which a joint resolution is referred have re3 ported, or when a committee or committees are discharged 

4 (under subsection (c)) from further consideration of a 

5 joint resolution described in subsection (a), it is at any 

6 time thereafter in order (even though a previous motion 

7 to the same effect has been disagreed to) for a motion 

8 to proceed to the consideration of the joint resolution, and 

9 all points of order against the joint resolution (and against 

10 consideration of the joint resolution) are waived. The mo11 tion is not subject to amendment, or to a motion to post12 pone, or to a motion to proceed to the consideration of 

13 other business. A motion to reconsider the vote by which 

14 the motion is agreed to or disagreed to shall not be in 

15 order. If a motion to proceed to the consideration of the 

16 joint resolution is agreed to, the joint resolution shall re17 main the unfinished business of the Senate until disposed 

18 of. 

19 ‘‘(2) In the Senate, debate on the joint resolution, 

20 and on all debatable motions and appeals in connection 

21 therewith, shall be limited to not more than 2 hours, which 

22 shall be divided equally between those favoring and those 

23 opposing the joint resolution. A motion to further limit 

24 debate is in order and not debatable. An amendment to, 

25 or a motion to postpone, or a motion to proceed to the 


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1 consideration of other business, or a motion to recommit 

2 the joint resolution is not in order. 

3 ‘‘(3) In the Senate, immediately following the conclu4 sion of the debate on a joint resolution described in sub5 section (a), and a single quorum call at the conclusion of 

6 the debate if requested in accordance with the rules of the 

7 Senate, the vote on final passage of the joint resolution 

8 shall occur. 

9 ‘‘(4) Appeals from the decisions of the Chair relating 

10 to the application of the rules of the Senate to the proce11 dure relating to a joint resolution described in subsection 

12 (a) shall be decided without debate. 

13 ‘‘(e) In the House of Representatives, if any com14 mittee to which a joint resolution described in subsection 

15 (a) has been referred has not reported it to the House 

16 at the end of 15 legislative days after its introduction, 

17 such committee shall be discharged from further consider18 ation of the joint resolution, and it shall be placed on the 

19 appropriate calendar. On the second and fourth Thursdays 

20 of each month it shall be in order at any time for the 

21 Speaker to recognize a Member who favors passage of a 

22 joint resolution that has appeared on the calendar for at 

23 least 5 legislative days to call up that joint resolution for 

24 immediate consideration in the House without intervention 

25 of any point of order. When so called up a joint resolution 


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1 shall be considered as read and shall be debatable for 1 

2 hour equally divided and controlled by the proponent and 

3 an opponent, and the previous question shall be considered 

4 as ordered to its passage without intervening motion. It 

5 shall not be in order to reconsider the vote on passage. 

6 If a vote on final passage of the joint resolution has not 

7 been taken by the third Thursday on which the Speaker 

8 may recognize a Member under this subsection, such vote 

9 shall be taken on that day. 

10 ‘‘(f)(1) If, before passing a joint resolution described 

11 in subsection (a), one House receives from the other a 

12 joint resolution having the same text, then— 

13 ‘‘(A) the joint resolution of the other House 

14 shall not be referred to a committee; and 

15 ‘‘(B) the procedure in the receiving House shall 

16 be the same as if no joint resolution had been re17 ceived from the other House until the vote on pas18 sage, when the joint resolution received from the 

19 other House shall supplant the joint resolution of 

20 the receiving House. 

21 ‘‘(2) This subsection shall not apply to the House of 

22 Representatives if the joint resolution received from the 

23 Senate is a revenue measure. 

24 ‘‘(g) If either House has not taken a vote on final 

25 passage of the joint resolution by the last day of the period 


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1 described in section 921(b)(2), then such vote shall be 

2 taken on that day. 

3 ‘‘(h) This section and section 923 are enacted by 

4 Congress— 

5 ‘‘(1) as an exercise of the rulemaking power of 

6 the Senate and House of Representatives, respec7 tively, and as such is deemed to be part of the rules 

8 of each House, respectively, but applicable only with 

9 respect to the procedure to be followed in that 

10 House in the case of a joint resolution described in 

11 subsection (a) and superseding other rules only 

12 where explicitly so; and 

13 ‘‘(2) with full recognition of the Constitutional 

14 right of either House to change the rules (so far as 

15 they relate to the procedure of that House) at any 

16 time, in the same manner and to the same extent as 

17 in the case of any other rule of that House. 

18 ‘‘§ 923. Congressional disapproval procedure for 

19 nonmajor rules 

20 ‘‘(a) For purposes of this section, the term ‘joint res21 olution’ means only a joint resolution introduced in the 

22 period beginning on the date on which the report referred 

23 to in section 921(a)(1)(A) is received by Congress and 

24 ending 60 days thereafter (excluding days either House 

25 of Congress is adjourned for more than 3 days during a 


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1 session of Congress), the matter after the resolving clause 

2 of which is as follows: ‘That Congress disapproves the 

3 nonmajor rule submitted by the lll relating to 

4 lll, and such rule shall have no force or effect.’ (The 

5 blank spaces being appropriately filled in). 

6 ‘‘(b) A joint resolution described in subsection (a) 

7 shall be referred to the committees in each House of Con8 gress with jurisdiction. 

9 ‘‘(c) In the Senate, if the committee to which is re10 ferred a joint resolution described in subsection (a) has 

11 not reported such joint resolution (or an identical joint 

12 resolution) at the end of 15 session days after the date 

13 of introduction of the joint resolution, such committee may 

14 be discharged from further consideration of such joint res15 olution upon a petition supported in writing by 30 Mem16 bers of the Senate, and such joint resolution shall be 

17 placed on the calendar. 

18 ‘‘(d)(1) In the Senate, when the committee to which 

19 a joint resolution is referred has reported, or when a com20 mittee is discharged (under subsection (c)) from further 

21 consideration of a joint resolution described in subsection 

22 (a), it is at any time thereafter in order (even though a 

23 previous motion to the same effect has been disagreed to) 

24 for a motion to proceed to the consideration of the joint 

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1 tion (and against consideration of the joint resolution) are 

2 waived. The motion is not subject to amendment, or to 

3 a motion to postpone, or to a motion to proceed to the 

4 consideration of other business. A motion to reconsider the 

5 vote by which the motion is agreed to or disagreed to shall 

6 not be in order. If a motion to proceed to the consideration 

7 of the joint resolution is agreed to, the joint resolution 

8 shall remain the unfinished business of the Senate until 

9 disposed of. 

10 ‘‘(2) In the Senate, debate on the joint resolution, 

11 and on all debatable motions and appeals in connection 

12 therewith, shall be limited to not more than 10 hours, 

13 which shall be divided equally between those favoring and 

14 those opposing the joint resolution. A motion to further 

15 limit debate is in order and not debatable. An amendment 

16 to, or a motion to postpone, or a motion to proceed to 

17 the consideration of other business, or a motion to recom18 mit the joint resolution is not in order. 

19 ‘‘(3) In the Senate, immediately following the conclu20 sion of the debate on a joint resolution described in sub21 section (a), and a single quorum call at the conclusion of 

22 the debate if requested in accordance with the rules of the 

23 Senate, the vote on final passage of the joint resolution 

24 shall occur. 


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1 ‘‘(4) Appeals from the decisions of the Chair relating 

2 to the application of the rules of the Senate to the proce3 dure relating to a joint resolution described in subsection 

4 (a) shall be decided without debate. 

5 ‘‘(e) In the Senate, the procedure specified in sub6 section (c) or (d) shall not apply to the consideration of 

7 a joint resolution respecting a nonmajor rule— 

8 ‘‘(1) after the expiration of the 60 session days 

9 beginning with the applicable submission or publica10 tion date; or 

11 ‘‘(2) if the report under section 921(a)(1)(A) 

12 was submitted during the period referred to in sec13 tion 921(d)(1), after the expiration of the 60 session 

14 days beginning on the 15th session day after the 

15 succeeding session of Congress first convenes. 

16 ‘‘(f) If, before the passage by one House of a joint 

17 resolution of that House described in subsection (a), that 

18 House receives from the other House a joint resolution 

19 described in subsection (a), then the following procedures 

20 shall apply: 

21 ‘‘(1) The joint resolution of the other House 

22 shall not be referred to a committee. 

23 ‘‘(2) With respect to a joint resolution described 

24 in subsection (a) of the House receiving the joint 

25 resolution— 


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1 ‘‘(A) the procedure in that House shall be 

2 the same as if no joint resolution had been re3 ceived from the other House; but 

4 ‘‘(B) the vote on final passage shall be on 

5 the joint resolution of the other House. 

6 ‘‘§ 924. Definitions 

7 ‘‘For purposes of this chapter: 

8 ‘‘(1) The term ‘major rule’ means any rule of 

9 the Food and Drug Administration, including an in10 terim final rule, that the Administrator of the Office 

11 of Information and Regulatory Affairs of the Office 

12 of Management and Budget finds has resulted in or 

13 is likely to result in— 

14 ‘‘(A) an annual cost on the economy of 

15 $100,000,000 or more, adjusted annually for 

16 inflation; 

17 ‘‘(B) a major increase in costs or prices for 

18 consumers, individual industries, Federal, 

19 State, or local government agencies, or geo20 graphic regions; or 

21 ‘‘(C) significant adverse effects on competi22 tion, employment, investment, productivity, in23 novation, or on the ability of United States24 based enterprises to compete with foreign-based 

25 enterprises in domestic and export markets. 


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1 ‘‘(2) The term ‘nonmajor rule’ means any rule 

2 of the Food and Drug Administration that is not a 

3 major rule. 

4 ‘‘(3) The term ‘rule’ has the meaning given 

5 such term in section 551, except that such term does 

6 not include— 

7 ‘‘(A) any rule of particular applicability; 

8 ‘‘(B) any rule relating to agency manage9 ment or personnel; or 

10 ‘‘(C) any rule of agency organization, pro11 cedure, or practice that does not substantially 

12 affect the rights or obligations of non-agency 

13 parties. 

14 ‘‘(4) The term ‘submission date or publication 

15 date’, except as otherwise provided in this chapter, 

16 means— 

17 ‘‘(A) in the case of a major rule, the date 

18 on which the Congress receives the report sub19 mitted under section 921(a)(1); and 

20 ‘‘(B) in the case of a nonmajor rule, the 

21 later of— 

22 ‘‘(i) the date on which the Congress 

23 receives the report submitted under section 

24 921(a)(1); and 


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1 ‘‘(ii) the date on which the nonmajor 

2 rule is published in the Federal Register, if 

3 so published. 

4 ‘‘§ 925. Judicial review 

5 ‘‘(a) No determination, finding, action, or omission 

6 under this chapter shall be subject to judicial review. 

7 ‘‘(b) Notwithstanding subsection (a), a court may de8 termine whether the Food and Drug Administration has 

9 completed the necessary requirements under this chapter 

10 for a rule to take effect. 

11 ‘‘(c) The enactment of a joint resolution of approval 

12 under section 922 shall not be interpreted to serve as a 

13 grant or modification of statutory authority by Congress 

14 for the promulgation of a rule, shall not extinguish or af15 fect any claim, whether substantive or procedural, against 

16 any alleged defect in a rule, and shall not form part of 

17 the record before the court in any judicial proceeding con18 cerning a rule except for purposes of determining whether 

19 or not the rule is in effect. 

20 ‘‘§ 926. Exemption for monetary policy 

21 ‘‘Nothing in this chapter shall apply to rules that con22 cern monetary policy proposed or implemented by the 

23 Board of Governors of the Federal Reserve System or the 

24 Federal Open Market Committee. 


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1 ‘‘§ 927. Effective date of certain rules 

2 ‘‘Notwithstanding section 921, any rule other than a 

3 major rule which the Food and Drug Administration for 

4 good cause finds (and incorporates the finding and a brief 

5 statement of reasons therefore in the rule issued) that no6 tice and public procedure thereon are impracticable, un7 necessary, or contrary to the public interest, shall take ef8 fect at such time as the Food and Drug Administration 

9 determines. 

10 ‘‘§ 928. Regulatory cut-go requirement 

11 ‘‘In making any new rule, the Food and Drug Admin12 istration shall identify a rule or rules that may be amend13 ed or repealed to completely offset any annual costs of 

14 the new rule to the United States economy. Before the 

15 new rule may take effect, the Food and Drug Administra16 tion shall make each such repeal or amendment. In mak17 ing such an amendment or repeal, the Food and Drug Ad18 ministration shall comply with the requirements of sub19 chapter II of chapter 5, but the Food and Drug Adminis20 tration may consolidate proceedings under subchapter 

21 with proceedings on the new rule. 

22 ‘‘§ 929. Review of rules currently in effect 

23 ‘‘(a) ANNUAL REVIEW.—Beginning on the date that 

24 is 6 months after the date of enactment of this section 

25 and annually thereafter for the 9 years following, the Food 

26 and Drug Administration shall designate not less than 10 


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1 percent of eligible rules made by the Food and Drug Ad2 ministration for review, and shall submit a report includ3 ing each such eligible rule in the same manner as a report 

4 under section 921(a)(1). Section 921, section 922, and 

5 section 923 shall apply to each such rule, subject to sub6 section (c) of this section. No eligible rule previously des7 ignated may be designated again. 

8 ‘‘(b) SUNSET FOR ELIGIBLE RULES NOT EX9 TENDED.—Beginning after the date that is 10 years after 

10 the date of enactment of this section, if Congress has not 

11 enacted a joint resolution of approval for that eligible rule, 

12 that eligible rule shall not continue in effect. 

13 ‘‘(c) CONSOLIDATION; SEVERABILITY.—In applying 

14 sections 921, 922, and 923 to eligible rules under this sec15 tion, the following shall apply: 

16 ‘‘(1) The words ‘take effect’ shall be read as 

17 ‘continue in effect’. 

18 ‘‘(2) Except as provided in paragraph (3), a 

19 single joint resolution of approval shall apply to all 

20 eligible rules in a report designated for a year, and 

21 the matter after the resolving clause of that joint 

22 resolution is as follows: ‘That Congress approves the 

23 rules submitted by the ll for the year ll.’ (The 

24 blank spaces being appropriately filled in). 


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1 ‘‘(3) It shall be in order to consider any amend2 ment that provides for specific conditions on which 

3 the approval of a particular eligible rule included in 

4 the joint resolution is contingent. 

5 ‘‘(4) A member of either House may move that 

6 a separate joint resolution be required for a specified 

7 rule. 

8 ‘‘(d) DEFINITION.—In this section, the term ‘eligible 

9 rule’ means a rule that is in effect as of the date of enact10 ment of this section.’’. 

11 (b) BUDGETARY EFFECTS OF RULES SUBJECT TO

12 SECTION 922 OF TITLE 5, UNITED STATES CODE.—Sec13 tion 257(b)(2) of the Balanced Budget and Emergency 

14 Deficit Control Act of 1985 is amended by adding at the 

15 end the following new subparagraph: 

16 ‘‘(E) BUDGETARY EFFECTS OF RULES

17 SUBJECT TO SECTION 922 OF TITLE 5, UNITED

18 STATES CODE.—Any rules subject to the con19 gressional approval procedure set forth in sec20 tion 922 of chapter 8 of title 5, United States 

21 Code, affecting budget authority, outlays, or re22 ceipts shall be assumed to be effective unless it 

23 is not approved in accordance with such sec24 tion.’’. 


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1 (c) GOVERNMENT ACCOUNTABILITY OFFICE STUDY

2 OF RULES.— 

3 (1) IN GENERAL.—The Comptroller General of 

4 the United States shall conduct a study to deter5 mine, as of the date of the enactment of this Act— 

6 (A) how many rules (as such term is de7 fined in section 924 of title 5, United States 

8 Code) of the Food and Drug Administration 

9 were in effect; 

10 (B) how many major rules (as such term 

11 is defined in section 924 of title 5, United 

12 States Code) of the Food and Drug Administra13 tion were in effect; and 

14 (C) the total estimated economic cost im15 posed by all such rules. 

16 (2) REPORT.—Not later than 1 year after the 

17 date of the enactment of this Act, the Comptroller 

18 General of the United States shall submit a report 

19 to Congress that contains the findings of the study 

20 conducted under paragraph (1). 

21 (d) EFFECTIVE DATE.—Subsections (a) and (b), and 

22 the amendments made by such sections, shall take effect 

23 beginning on the date that is 1 year after the date of en24 actment of this Act. 


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1 SEC. 332. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

2 OF RULES. 

3 (a) IN GENERAL.—The Comptroller General of the 

4 United States shall conduct a study to determine, as of 

5 the date of the enactment of this Act— 

6 (1) how many rules (as such term is defined in 

7 section 804 of title 5, United States Code) were in 

8 effect; 

9 (2) how many major rules (as such term is de10 fined in section 804 of title 5, United States Code) 

11 were in effect; and 

12 (3) the total estimated economic cost imposed 

13 by all such rules. 

14 (b) REPORT.—Not later than 1 year after the date 

15 of the enactment of this Act, the Comptroller General of 

16 the United States shall submit a report to Congress that 

17 contains the findings of the study conducted under sub18 section (a). 

19 Subtitle E—Medicare Prescription 

20 Drug Competition 

21 SEC. 341. MEDICARE DRUG COVERAGE. 

22 Notwithstanding any other provision of law, the Sec23 retary of Health and Human Services may alter the reim24 bursement mechanism for prescription drugs provided 

25 through the Medicare Part B program by reimbursing at 


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1 a rate that, based on ASP+6% in the year of implementa2 tion of this Act, grows at CPI. 

3 SEC. 342. PBM TRANSPARENCY AND ELIMINATION OF DIR 

4 FEES. 

5 (a) PROHIBITING MEDICARE PDP SPONSORS AND

6 MA–PD ORGANIZATIONS FROM RETROACTIVELY REDUC7 ING PAYMENT ON CLEAN CLAIMS SUBMITTED BY PHAR8 MACIES.— 

9 (1) IN GENERAL.—Section 1860D–12(b)(4)(A) 

10 of the Social Security Act (42 U.S.C. 1395w– 

11 112(b)(4)(A)) is amended by adding at the end the 

12 following new clause: 

13 ‘‘(iv) PROHIBITING RETROACTIVE RE14 DUCTIONS IN PAYMENTS ON CLEAN

15 CLAIMS.—Each contract entered into with 

16 a PDP sponsor under this part with re17 spect to a prescription drug plan offered 

18 by such sponsor shall provide that after 

19 the date of receipt of a clean claim sub20 mitted by a pharmacy, the PDP sponsor 

21 (or an agent of the PDP sponsor) may not 

22 retroactively reduce payment on such claim 

23 directly or indirectly through aggregated 

24 effective rate or otherwise except in the 

25 case such claim is found to not be a clean 


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1 claim (such as in the case of a claim lack2 ing required substantiating documentation) 

3 during the course of a routine audit as 

4 permitted pursuant to written agreement 

5 between the PDP sponsor (or such an 

6 agent) and such pharmacy. The previous 

7 sentence shall not prohibit any retroactive 

8 increase in payment to a pharmacy pursu9 ant to a written agreement between a PDP 

10 sponsor (or an agent of such sponsor) and 

11 such pharmacy.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by subsection (a) shall apply with respect to con14 tracts entered into on or after January 1, 2021. 

15 (b) ELIMINATION OF DIR FEES.— 

16 (1) PHARMACY BENEFITS MANAGER STAND17 ARDS UNDER THE MEDICARE PROGRAM FOR PRE18 SCRIPTION DRUG PLANS AND MA–PD PLANS.— 

19 (A) IN GENERAL.—Section 1860D–12(b) 

20 of the Social Security Act (42 U.S.C. 1395w– 

21 112(b)) is amended by adding at the end the 

22 following new paragraph: 

23 ‘‘(7) PHARMACY BENEFITS MANAGER TRANS24 PARENCY REQUIREMENTS.—Each contract entered 

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1 spect to a prescription drug plan offered by such 

2 sponsor or with an MA organization offering an 

3 MA–PD plan under part C shall provide that the 

4 sponsor or organization, respectively, may not enter 

5 into a contract with any pharmacy benefits manager 

6 (referred to in this paragraph as a ‘PBM’) to man7 age the prescription drug coverage provided under 

8 such plan, or to control the costs of the prescription 

9 drug coverage under such plan, unless the PBM ad10 heres to the following criteria when handling person11 ally identifiable utilization and claims data or other 

12 sensitive patient data: 

13 ‘‘(A) The PBM may not transmit any per14 sonally identifiable utilization, protected health 

15 information, or claims data, with respect to a 

16 plan enrollee, to a pharmacy owned by a PBM 

17 if the plan enrollee has not voluntarily elected 

18 in writing or via secure electronic means to fill 

19 that particular prescription at the PBM-owned 

20 pharmacy. 

21 ‘‘(B) The PBM may not require that a 

22 plan enrollee use a retail pharmacy, mail order 

23 pharmacy, specialty pharmacy, or other phar24 macy entity providing pharmacy services in 

25 which the PBM has an ownership interest or 


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1 that has an ownership interest in the PBM, or 

2 provide an incentive to a plan enrollee to en3 courage the enrollee to use a retail pharmacy, 

4 mail order pharmacy, specialty pharmacy, or 

5 other pharmacy entity providing pharmacy serv6 ices in which the PBM has an ownership inter7 est or that has an ownership interest in the 

8 PBM, if the incentive is applicable only to such 

9 pharmacies.’’. 

10 (B) REGULAR UPDATE OF PRESCRIPTION

11 DRUG PRICING STANDARD.—Paragraph (6) of 

12 section 1860D–12(b) of the Social Security Act 

13 (42 U.S.C. 1395w–112(b)) is amended to read 

14 as follows: 

15 ‘‘(6) REGULAR UPDATE OF PRESCRIPTION

16 DRUG PRICING STANDARD.— 

17 ‘‘(A) IN GENERAL.—If the PDP sponsor of 

18 a prescription drug plan (or MA organization 

19 offering an MA–PD plan) uses a standard for 

20 reimbursement (as described in subparagraph 

21 (B)) of pharmacies based on the cost of a drug, 

22 each contract entered into with such sponsor 

23 under this part (or organization under part C) 

24 with respect to the plan shall provide that the 

25 sponsor (or organization) shall— 


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1 ‘‘(i) update such standard not less fre2 quently than once every 7 days, beginning 

3 with an initial update on January 1 of 

4 each year, to accurately reflect the market 

5 price of acquiring the drug; 

6 ‘‘(ii) disclose to applicable pharmacies 

7 and the contracting entities of such phar8 macies the sources used for making any 

9 such update immediately without require10 ment of request; 

11 ‘‘(iii) if the source for such a standard 

12 for reimbursement is not publicly available, 

13 disclose to the applicable pharmacies and 

14 the respective contracting entities of such 

15 pharmacies all individual drug prices to be 

16 so updated in advance of the use of such 

17 prices for the reimbursement of claims; 

18 ‘‘(iv) establish a process to appeal, in19 vestigate, and resolve disputes regarding 

20 individual drug prices that are less than 

21 the pharmacy acquisition price for such 

22 drug, which must be adjudicated within 7 

23 days of the pharmacy filing its appeal; and 

24 ‘‘(v) provide all such pricing data in 

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1 parable easily accessible and complete 

2 spreadsheet format. 

3 ‘‘(B) PRESCRIPTION DRUG PRICING

4 STANDARD DEFINED.—For purposes of sub5 paragraph (A), a standard for reimbursement 

6 of a pharmacy is any methodology or formula 

7 for varying the pricing of a drug or drugs dur8 ing the term of the pharmacy reimbursement 

9 contract that is based on the cost of the drug 

10 involved, including drug pricing references and 

11 amounts that are based upon average wholesale 

12 price, wholesale average cost, average manufac13 turer price, average sales price, maximum al14 lowable cost (MAC), or other costs, whether 

15 publicly available or not.’’. 

16 (C) EFFECTIVE DATE.—The amendments 

17 made by this section shall apply to plan years 

18 beginning on or after January 1, 2020. 

19 (2) REGULAR UPDATE OF PRESCRIPTION DRUG

20 PRICING STANDARD UNDER TRICARE RETAIL PHAR21 MACY PROGRAM.—Section 1074g(d) of title 10, 

22 United States Code, is amended by adding at the 

23 end the following new paragraph: 

24 ‘‘(3) To the extent practicable, with respect to the 

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1 section (a)(2)(E)(ii), the Secretary shall ensure that a con2 tract entered into with a TRICARE managed care support 

3 contractor includes requirements described in section 

4 1860D–12(b)(6) of the Social Security Act (42 U.S.C. 

5 1395w–112(b)(6)) to ensure the provision of information 

6 regarding the pricing standard for prescription drugs.’’. 

7 (3) PRESCRIPTION DRUG TRANSPARENCY IN

8 THE FEDERAL EMPLOYEES HEALTH BENEFITS PRO9 GRAM.— 

10 (A) IN GENERAL.—Section 8902 of title 5, 

11 United States Code, is amended by adding at 

12 the end the following new subsections: 

13 ‘‘(p) A contract may not be made or a plan approved 

14 under this chapter under which a carrier has an agree15 ment with a pharmacy benefits manager (in this sub16 section referred to as a ‘PBM’) to manage prescription 

17 drug coverage or to control the costs of the prescription 

18 drug coverage unless the carrier and PBM adhere to the 

19 following criteria: 

20 ‘‘(1) The PBM may not transmit any personally 

21 identifiable utilization, protected health information, 

22 or claims data with respect to an individual enrolled 

23 under such contract or plan to a pharmacy owned by 

24 the PBM if the individual has not voluntarily elected 


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1 in writing or via secure electronic means to fill that 

2 particular prescription at such a pharmacy. 

3 ‘‘(2) The PBM may not require that an indi4 vidual enrolled under such contract or plan use a re5 tail pharmacy, mail order pharmacy, specialty phar6 macy, or other pharmacy entity providing pharmacy 

7 services in which the PBM has an ownership interest 

8 or that has an ownership interest in the PBM or 

9 provide an incentive to a plan enrollee to encourage 

10 the enrollee to use a retail pharmacy, mail order 

11 pharmacy, specialty pharmacy, or other pharmacy 

12 entity providing pharmacy services in which the 

13 PBM has an ownership interest or that has an own14 ership interest in the PBM, if the incentive is appli15 cable only to such pharmacies. 

16 ‘‘(q)(1) If a contract made or plan approved under 

17 this chapter provides for a standard for reimbursement 

18 (as described in paragraph (2)) with respect to a prescrip19 tion drug plan, such contract or plan shall provide that 

20 the applicable carrier— 

21 ‘‘(A) update such standard not less frequently 

22 than once every 7 days, beginning with an initial up23 date on January 1 of each year, to accurately reflect 

24 the market price of acquiring the drug; 


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1 ‘‘(B) disclose to applicable pharmacies and the 

2 contracting entities of such pharmacies the sources 

3 used for making any such update immediately with4 out requirement of request; 

5 ‘‘(C) if the source for such a standard for reim6 bursement is not publicly available, disclose to the 

7 applicable pharmacies and contracting entities of 

8 such pharmacies all individual drug prices to be so 

9 updated in advance of the use of such prices for the 

10 reimbursement of claims; 

11 ‘‘(D) establish a process to appeal, investigate, 

12 and resolve disputes regarding individual drug prices 

13 that are less than the pharmacy acquisition price for 

14 such drug, which must be adjudicated within 7 days 

15 of the pharmacy filing its appeal; and 

16 ‘‘(E) provide all such pricing data in an .xml 

17 spreadsheet format or a comparable easily accessible 

18 and complete spreadsheet format. 

19 ‘‘(2) For purposes of paragraph (1), a standard for 

20 reimbursement of a pharmacy is any methodology or for21 mula for varying the pricing of a drug or drugs during 

22 the term of the pharmacy reimbursement contract that is 

23 based on the cost of the drug involved, including drug pric24 ing references and amounts that are based upon average 

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1 turer price, average sales price, maximum allowable cost, 

2 or other costs, whether publicly available or not.’’. 

3 (B) APPLICATION.—The amendment made 

4 by subparagraph (A) shall apply to any contract 

5 entered into under section 8902 of title 5, 

6 United States Code, on or after the date of en7 actment of this section. 

8 SEC. 343. SUNSET OF LIMIT ON MAXIMUM REBATE AMOUNT 

9 FOR SINGLE SOURCE DRUGS AND INNO10 VATOR MULTIPLE SOURCE DRUGS. 

11 Section 1927(c)(2)(D) of the Social Security Act (42 

12 U.S.C. 1396r–8(c)(2)(D)) is amended by inserting after 

13 ‘‘December 31, 2009,’’ the following: ‘‘and before Decem14 ber 31, 2024,’’. 

15 SEC. 344. REGULATION OF MANUFACTURER-SPONSORED 

16 COPAY CONTRIBUTIONS. 

17 Notwithstanding any other provision of law, the Sec18 retary of Health and Human Services may establish a 

19 mechanism prohibiting drug manufacturers from contrib20 uting financially to patient copays, and establish a system 

21 of penalizing such behavior. 


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1 SEC. 345. DATA REPORTING TO IMPROVE THE TRANS2 PARENCY REGARDING HOW 340B HOSPITAL 

3 COVERED ENTITIES PROVIDE CARE FOR PA4 TIENTS. 

5 Section 340B of the Public Health Service Act (42 

6 U.S.C. 256b) is amended by adding at the end the fol7 lowing new subsection: 

8 ‘‘(f) DATA REPORTING TO IMPROVE THE TRANS9 PARENCY REGARDING HOW HOSPITAL COVERED ENTI10 TIES PROVIDE CARE FOR PATIENTS.— 

11 ‘‘(1) IN GENERAL.—Beginning on the date that 

12 is 14 months after the date of the enactment of this 

13 subsection, and annually thereafter, subject to sub14 paragraph (C), a covered entity described in sub15 paragraph (L) or (M) of subsection (a)(4), unless 

16 otherwise indicated, shall report on the following, 

17 with respect to the previous year, in such a manner 

18 and form as specified by the Secretary: 

19 ‘‘(A) The following information: 

20 ‘‘(i) With respect to such covered enti21 ty and with respect to each child site of 

22 such entity (as referenced in paragraph 

23 (11)), the number and percentage of indi24 viduals who are dispensed or administered 

25 drugs that are subject to an agreement 

26 under this section, organized by form of 


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1 health insurance coverage of such individ2 uals (including at least by the Medicare 

3 program under title XVIII of the Social 

4 Security Act, the Medicaid program under 

5 title XIX of such Act, health insurance 

6 coverage offered in the individual or group 

7 market or a group health plan (as such 

8 terms are defined in section 2791), and 

9 uninsured). 

10 ‘‘(ii) With respect to each such child 

11 site of such entity, the total costs incurred 

12 at each such site and the cost incurred at 

13 each such site for charity care as defined 

14 in line 23 of worksheet S–10 to the Medi15 care cost report or in any successor form. 

16 ‘‘(B) The aggregate amount of gross reim17 bursement received by each such covered entity 

18 (including child sites of such entity) described 

19 in such subparagraph (L) or (M) for all drugs 

20 purchased that are subject to an agreement 

21 under this section and the entity’s aggregate 

22 acquisition cost for such drugs. 

23 ‘‘(C) In the case of covered entity de24 scribed in subparagraph (L) of subsection 

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1 cation (and at least annually thereafter), the 

2 contract that is the basis for eligibility under 

3 the requirement under clause (i) of such sub4 paragraph and any modifications to such con5 tract for purposes of review by the Secretary. 

6 ‘‘(D) With respect to such covered entity 

7 and with respect to each child site of such enti8 ty, the name of all third-party vendors or other 

9 similar entities that the covered entity contracts 

10 with to provide services associated with the pro11 gram under this section. 

12 ‘‘(2) AVAILABILITY OF INFORMATION.— 

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

14 make data reported by covered entities under 

15 subparagraphs (A), (C), and (D) of paragraph 

16 (1) available on the public website of the De17 partment of Health and Human Services in an 

18 electronic and searchable format, which may in19 clude the 340B Office of Pharmacy Affairs In20 formation System or a successor to such sys21 tem. 

22 ‘‘(B) FORMAT.—Data made available 

23 under subparagraph (A) shall be made available 

24 in a manner that shows each category of data 

25 reported both in the aggregate and identified by 


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1 covered entities described in subparagraphs (L) 

2 and (M) of subsection (a)(4) and child sites of 

3 such covered entities. In carrying out this para4 graph, with respect to data reported pursuant 

5 to paragraph (1)(C), the Secretary shall ensure 

6 that any proprietary information shall be re7 dacted from contracts submitted pursuant to 

8 such paragraph (1)(C) before posting such 

9 data. 

10 ‘‘(3) INTERIM FINAL REGULATIONS.—The Sec11 retary shall issue interim final regulations no later 

12 than the date that is 6 months after the date of the 

13 enactment of this subsection, to carry out this sub14 section and shall finalize such regulations prior to 

15 the end of the moratorium period to which sub16 section (a)(11) applies. 

17 ‘‘(4) REPORTS TO CONGRESS.— 

18 ‘‘(A) OIG REPORT.—Not later than 2 

19 years after the date of the enactment of this 

20 subsection, the Office of the Inspector General 

21 shall submit to Congress a final report on the 

22 level of charity care provided by covered entities 

23 described in subparagraphs (L) and (M) of sub24 section (a)(4) and separately by child sites of 


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1 such covered entities, as reported in paragraph 

2 (1)(A). 

3 ‘‘(B) GAO REPORTS.— 

4 ‘‘(i) INITIAL REPORT.—Not later than 

5 1 year after the date of the enactment of 

6 this subsection, the Comptroller General of 

7 the United States shall submit to Congress 

8 a report— 

9 ‘‘(I) analyzing the State and local 

10 government contracts intended to sat11 isfy the requirement under subsection 

12 (a)(4)(L)(i) for a covered entity to 

13 qualify as an entity described in sub14 paragraph (L) of subsection (a)(4); 

15 ‘‘(II) assessing the amount of 

16 care such contracts obligate such enti17 ty to provide to low-income individuals 

18 ineligible for Medicare under title 

19 XVIII of the Social Security Act and 

20 Medicaid under title XIX of such Act; 

21 and 

22 ‘‘(III) analyzing how these con23 tracts define low-income individuals 

24 and whether the Secretary reviews 

25 such determinations. 


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1 ‘‘(ii) SUBSEQUENT REPORT.—Not 

2 later than 2 years after the date of the en3 actment of this subsection, the Comptroller 

4 General of the United States shall submit 

5 to Congress a final report on the informa6 tion collected under paragraph (1)(B) re7 garding the difference between the aggre8 gate gross reimbursement and aggregate 

9 acquisition costs received by each such cov10 ered entity (including child sites of such 

11 entity) for drugs subject to an agreement 

12 under this section.’’. 

13 SEC. 346. REQUIRING 340B DRUG DISCOUNT PROGRAM RE14 PORTS BY DSH HOSPITAL COVERED ENTITIES 

15 ON LOW-INCOME UTILIZATION RATE OF OUT16 PATIENT HOSPITAL SERVICES. 

17 (a) IN GENERAL.—Section 340B(d)(2) of the Public 

18 Health Service Act (42 U.S.C. 256b(d)(2)) is amended— 

19 (1) in subparagraph (B)(i), by inserting before 

20 the period at the end the following: ‘‘, including, 

21 with respect to such updates made on or after Janu22 ary 1, 2020, by requiring covered entities described 

23 in subsection (a)(4)(L) to submit (and to so regu24 larly update) information described in subparagraph 

25 (C)’’; and 


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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(C) INFORMATION ON LOW-INCOME UTI4 LIZATION RATE OF OUTPATIENT HOSPITAL

5 SERVICES.— 

6 ‘‘(i) IN GENERAL.—For purposes of 

7 subparagraph (B)(i), the information de8 scribed in this subparagraph, with respect 

9 to a covered entity described in subsection 

10 (a)(4)(L) and an update under such sub11 paragraph (B)(i), is— 

12 ‘‘(I) the low-income outpatient 

13 utilization rate of such covered entity 

14 for the most recent fiscal year; and 

15 ‘‘(II) the low-income outpatient 

16 utilization rate of off-site outpatient 

17 facilities, clinics, eligible off-site loca18 tions, and associated sites of such en19 tity identified as child sites of such 

20 entity pursuant to the identification 

21 system under subparagraph (B)(iv) 

22 for the most recent fiscal year. 

23 ‘‘(ii) LOW-INCOME OUTPATIENT UTI24 LIZATION RATE DEFINED.—In this sub25 paragraph, the term ‘low-income outpatient 


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1 utilization rate’ has the meaning given the 

2 term ‘low-income utilization rate’ under 

3 paragraph (3) of section 1923(b) of the 

4 Social Security Act, except that— 

5 ‘‘(I) clauses (i) and (ii) of sub6 paragraph (A) of such paragraph 

7 shall be applied as if— 

8 ‘‘(aa) each reference to ‘pa9 tient services’ were a reference to 

10 ‘patient services furnished on an 

11 outpatient basis’; and 

12 ‘‘(bb) for purposes of clause 

13 (i)(II) of this subparagraph, each 

14 reference to ‘hospital’ were a ref15 erence to ‘off-site outpatient fa16 cilities, clinics, eligible off-site lo17 cations, and associated sites of 

18 the hospital that are identified as 

19 child sites of the hospital pursu20 ant to the identification system 

21 under section 340B(d)(2)(B)(iv) 

22 of the Public Health Service Act’; 

23 and 


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1 ‘‘(II) clauses (i) and (ii) of sub2 paragraph (B) of such paragraph 

3 shall be applied as if— 

4 ‘‘(aa) each reference to ‘in5 patient hospital services’ were a 

6 reference to ‘outpatient hospital 

7 services’; and 

8 ‘‘(bb) for purposes of clause 

9 (i)(II) each reference to ‘hos10 pital’s charges’ were a reference 

11 to ‘charges of the off-site out12 patient facilities, clinics, eligible 

13 off-site locations, and associated 

14 sites of the hospital that are 

15 identified as child sites of the 

16 hospital pursuant to the identi17 fication system under section 

18 340B(d)(2)(B)(iv) of the Public 

19 Health Service Act’.’’. 

20 (b) ANNUAL REPORTS.—Not later than January 1, 

21 2021, and annually thereafter, the Administrator of the 

22 Health Resources and Services Administration shall sub23 mit to Congress a report on information submitted by cov24 ered entities for the previous year pursuant to the amend25 ments made by subsection (a). 


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1 TITLE IV—PROVIDER 

2 COMPETITION 

3 SEC. 401. HOSPITAL CONSOLIDATION. 

4 (a) AUTHORIZATION OF APPROPRIATIONS.—There is 

5 authorized to be appropriated $160,000,000 to the Fed6 eral Trade Commission to hire staff to investigate, as con7 sistent with the Sherman Antitrust Act and other relevant 

8 Federal laws, anti-competitive mergers and practices 

9 under such laws to the extent such mergers and practices 

10 relate to providers of inpatient and outpatient health care 

11 services, as defined by the Secretary of Health and 

12 Human Services. 

13 (b) MEDICARE RATES APPLIED TO CERTAIN HHI 

14 HOSPITALS.— 

15 (1) IN GENERAL.—Section 1866(a) of the So16 cial Security Act (42 U.S.C. 1395cc(a)) is amend17 ed— 

18 (A) in paragraph (1)— 

19 (i) in subparagraph (X), by striking 

20 ‘‘and’’ at the end; 

21 (ii) in subparagraph (Y), by striking 

22 the period at the end and inserting ‘‘; 

23 and’’; and 

24 (iii) by inserting after subparagraph 

25 (Y) the following new subparagraph: 


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1 ‘‘(Z) subject to paragraph (4), in the case 

2 of a hospital in an urban area and with respect 

3 to which there is a Herfindahl-Hirschman Index 

4 (HHI) of greater than 4,000 and in the case of 

5 a hospital in a rural area and with respect to 

6 which there is Herfindahl-Hirschman Index 

7 (HHI) of greater than 5,000, to apply the reim8 bursement rate with respect to individuals (re9 gardless of whether such an individual is enti10 tled to or eligible for benefits under this title, 

11 but excluding individuals eligible for medical as12 sistance under a State plan under title XIX) 

13 furnished items and services at such hospital 

14 that would be billable under this title for such 

15 items and services if furnished by such hospital 

16 to an individual entitled to or enrolled for bene17 fits under this title.’’; and 

18 (B) by adding at the end the following new 

19 paragraph: 

20 ‘‘(4)(A) The requirement under paragraph 

21 (1)(Z) shall not apply in the case of a hospital in a 

22 hospital referral region if the HRR market share of 

23 such hospital (as determined under subparagraph 

24 (B)) is less than 0.15. 


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1 ‘‘(B) For purposes of subparagraph (A), the 

2 HRR market share of a hospital in a hospital refer3 ral region is equal to— 

4 ‘‘(i) the total revenue of the hospital, di5 vided by 

6 ‘‘(ii) the total revenue of all hospital in the 

7 hospital referral region.’’. 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by this subsection shall apply with respect to items 

10 and services furnished on or after January 1, 2021. 

11 (c) GRANTS FOR HOSPITAL INFRASTRUCTURE IM12 PROVEMENT.— 

13 (1) IN GENERAL.—The Secretary of Health and 

14 Human Services shall carry out a grant program 

15 under which the Secretary shall provide grants to el16 igible States, in accordance with this subsection. 

17 (2) USES.—An eligible State receiving a grant 

18 under this subsection may use such grant to improve 

19 the State hospital infrastructure and to supplement 

20 any other funds provided for a purpose authorized 

21 under a State or local hospital grant programs 

22 under State law. 

23 (3) ELIGIBILITY.— 

24 (A) IN GENERAL.—An eligible State may 

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1 section with respect to each qualifying criterion 

2 described in subparagraph (B) that is met by 

3 the State. 

4 (B) ELIGIBLE STATE.—For purposes of 

5 this subsection, the term ‘‘eligible State’’ means 

6 a State that meets any one or more of the fol7 lowing qualifying criteria: 

8 (i) The State does not have in effect 

9 any State certificate of need law that re10 quires a health care provider to provide to 

11 a regulatory body a certification that the 

12 community needs the services provided by 

13 the health care provider. 

14 (ii) The State has in effect State 

15 scope of practice laws that— 

16 (I) allow advanced practice pro17 viders (such as nurse practitioners, 

18 advanced practice registered nurses, 

19 clinical nurse specialists, and physi20 cian assistants) to evaluate patients; 

21 diagnose, order, and interpret diag22 nostic tests; and initiate and manage 

23 treatments; or 

24 (II) provide that the only jus25 tification for limiting the scope of 


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1 practice of a health care provider is 

2 safety to the public. 

3 (iii) The State does not have in effect 

4 any State laws that require managed care 

5 plans to accept into the network of such 

6 plan any qualified provider who is willing 

7 to accept the terms and conditions of the 

8 managed care plan. 

9 (4) FUNDING.—There is authorized to be ap10 propriated to carry out this subsection 

11 $1,000,000,000 for each of the fiscal years 2019 

12 through 2028. Funds appropriated under this para13 graph shall remain available until expended. 

14 SEC. 402. PRICE TRANSPARENCY. 

15 Section 1866 of the Social Security Act (42 U.S.C. 

16 1395cc), as amended by section 401, is further amended— 

17 (1) in subsection (a)(1)— 

18 (A) in subparagraph (Y), by striking 

19 ‘‘and’’ at the end; 

20 (B) in subparagraph (Z), by striking the 

21 period at the end and inserting ‘‘; and’’; and 

22 (C) by inserting after subparagraph (Z) 

23 the following new subparagraph: 

24 ‘‘(AA) in the case of a hospital, to comply with 

25 the requirement under subsection (l).’’; and 


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1 (2) by adding at the end the following new sub2 section: 

3 ‘‘(l) REQUIREMENT RELATING TO PUBLISHING CER4 TAIN HOSPITAL PRICES.— 

5 ‘‘(1) IN GENERAL.—For purposes of subsection 

6 (a)(1)(AA), the requirement described in this sub7 section is, with respect to a hospital and year (begin8 ning with 2021), for the hospital to publicly post, 

9 through the system established under paragraph (3), 

10 for each service included in the list published under 

11 paragraph (2) for such year, the volume-weighted 

12 average price charged by the hospital to— 

13 ‘‘(A) individuals enrolled during such year 

14 in group health plans or health insurance cov15 erage offered in the individual or group market 

16 (as such terms are defined in section 2791 of 

17 the Public Health Service Act); and 

18 ‘‘(B) individuals who are not enrolled in 

19 any health insurance coverage or health benefits 

20 plan and individuals who are enrolled in such 

21 coverage or plan but such coverage or plan does 

22 not provide benefits for the service. 

23 ‘‘(2) SERVICES.—For purposes of subsection 

24 (a)(1)(AA) and this subsection, the Secretary shall, 

25 for 2021 and each subsequent year, publish a list of 


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1 the 100 services that are the most highly utilized in 

2 a hospital-based setting. 

3 ‘‘(3) STANDARDIZED DIGITAL REPORTING SYS4 TEM.—Not later than January 1, 2021, the Sec5 retary shall establish a standardized digital system 

6 for purposes of paragraph (1).’’. 

7 SEC. 403. REPEALING SHARED SAVINGS INCENTIVES FROM 

8 MEDICARE SHARED SAVINGS PROGRAM. 

9 (a) IN GENERAL.—Section 1899 of the Social Secu10 rity Act (42 U.S.C. 1395jjj) is amended— 

11 (1) in subsection (a)(1)— 

12 (A) by striking subparagraph (B); and 

13 (B) by striking ‘‘such program— 

14 ‘‘(A) groups of providers’’ and inserting 

15 ‘‘such program, groups of providers’’; 

16 (2) in subsection (b)(2)— 

17 (A) in subparagraph (C), by striking ‘‘that 

18 would allow the organization to receive and dis19 tribute payments for shared savings under sub20 section (d)(2) to participating providers of serv21 ices and suppliers’’; and 

22 (B) in subparagraph (E)— 

23 (i) by striking ‘‘the implementation’’ 

24 and inserting ‘‘and the implementation’’; 

25 and 


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1 (ii) by striking ‘‘, and the determina2 tion of payments for shared savings under 

3 subsection (d)(2)’’; 

4 (3) in subsection (d)— 

5 (A) in paragraph (1)— 

6 (i) in subparagraph (A), by striking 

7 ‘‘except’’ and all that follows through 

8 ‘‘subparagraph (B)(i).’’; and 

9 (ii) by striking subparagraph (B); and 

10 (B) by striking paragraph (2); and 

11 (4) in subsection (g), by striking paragraph (4) 

12 and redesignating paragraphs (5) and (6) as para13 graphs (4) and (5), respectively. 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 subsection (a) shall take effect on January 1, 2021. 

16 SEC. 404. REPEAL OF HEALTH CARE REFORM PROVISIONS 

17 LIMITING MEDICARE EXCEPTION TO THE 

18 PROHIBITION ON CERTAIN PHYSICIAN RE19 FERRALS FOR HOSPITALS. 

20 Sections 6001 and 10601 of the Patient Protection 

21 and Affordable Care Act (Public Law 111–148; 124 Stat. 

22 684, 1005) and section 1106 of the Health Care and Edu23 cation Reconciliation Act of 2010 (Public Law 111–152; 

24 124 Stat. 1049) are repealed and the provisions of law 


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1 amended by such sections are restored as if such sections 

2 had never been enacted. 

3 SEC. 405. ADVISORY GROUP ON REDUCING BURDEN OF 

4 HOSPITAL ADMINISTRATIVE REQUIREMENTS. 

5 (a) IN GENERAL.—Not later than January 1, 2021, 

6 the Secretary of Health and Human Services shall convene 

7 an advisory group to provide, in accordance with this sec8 tion, recommendations on ways the Federal Government 

9 could reduce the burden of administrative requirements on 

10 hospitals. 

11 (b) RECOMMENDATIONS.—Not later than January 1, 

12 2022, the advisory board convened under this section 

13 shall— 

14 (1) submit to the Secretary of Health and 

15 Human Services recommendations described under 

16 subsection (a) for executive action and any rec17 ommendations for State actions for potential consid18 eration in making grants under section 2(c) to 

19 States; and 

20 (2) submit to Congress recommendations de21 scribed under subsection (a) for legislative proposals. 

22 (c) MEMBERSHIP.—The advisory board under this 

23 section shall consist of the following members: 

24 (1) Three representatives of companies that 

25 have— 


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1 (A) geographically distributed workforces; 

2 (B) at least 10,000 employees; and 

3 (C) no more than 10 percent of such em4 ployees in any single State. 

5 (2) Three representatives of health insurance 

6 issuers and health plans, consisting of— 

7 (A) one representative of for-profit health 

8 insurance issuers and health plans with at least 

9 20,000,000 enrollees in the employer-sponsored 

10 market; 

11 (B) one representative of non-profit health 

12 insurance issuers and health plans operating in 

13 at least 5 States; and 

14 (C) one representative of non-profit health 

15 insurance issuers and health plans operating in 

16 a rural State (as defined by the Census Bu17 reau). 

18 (3) Seven public policy experts in the field of 

19 hospital consolidation. 

20 SEC. 406. AUTHORITY OF FEDERAL TRADE COMMISSION 

21 OVER CERTAIN TAX-EXEMPT ORGANIZA22 TIONS. 

23 Section 4 of the Federal Trade Commission Act (15 

24 U.S.C. 44) is amended, in the undesignated paragraph re25 lating to the definition of the term ‘‘Corporation’’— 


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1 (1) by striking ‘‘, and any’’ and inserting ‘‘, 

2 any’’; and 

3 (2) by inserting before the period at the end the 

4 following: ‘‘, and any organization described in sec5 tion 501(c)(3) of the Internal Revenue Code of 1986 

6 that is exempt from taxation under section 501(a) of 

7 such Code’’. 

8 TITLE V—DIGITAL HEALTH 

9 CARE 

10 SEC. 501. ACCESS OF INDIVIDUALS TO PROTECTED HEALTH 

11 INFORMATION. 

12 The provisions of section 164.524 of title 45, Code 

13 of Federal Regulations, as in effect on the day before the 

14 date of the enactment of this Act, shall have the force and 

15 effect of law. 

16 SEC. 502. EXPANSION OF COVERAGE OF TELEHEALTH 

17 SERVICES. 

18 (a) COVERED SERVICES.—Section 1834(m)(4)(F)(i) 

19 of the Social Security Act (42 U.S.C. 1395m(m)(4)(F)(i)) 

20 is amended— 

21 (1) by striking ‘‘and office’’ and inserting ‘‘of22 fice’’; and 

23 (2) by inserting: ‘‘respiratory services, audiology 

24 services (as defined in section 1861(ll)), outpatient 

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1 tional therapy, and speech-language pathology serv2 ices)’’ after ‘‘the Secretary)),’’. 

3 (b) PROVIDERS.—Subsection (m) of section 1834 of 

4 such Act (42 U.S.C. 1395m) is amended— 

5 (1) in paragraph (1), by striking ‘‘or a practi6 tioner (described in section 1842(b)(18)(C))’’ and 

7 inserting ‘‘, a practitioner (described in section 

8 1842(b)(18)(C)), or an applicable professional (as 

9 defined in paragraph (4)(G))’’; 

10 (2) by striking ‘‘physician or practitioner’’ each 

11 time it appears in such subsection and inserting 

12 ‘‘physician, practitioner, or applicable professional’’; 

13 (3) in paragraph (3)(A)— 

14 (A) in the heading, by striking ‘‘PHYSI15 CIAN AND PRACTITIONER’’ and inserting ‘‘PHY16 SICIAN, PRACTITIONER, AND APPLICABLE PRO17 FESSIONAL’’; and 

18 (B) by striking ‘‘physicians or practi19 tioners’’ and inserting ‘‘physicians, practi20 tioners, or applicable professionals’’; and 

21 (4) in paragraph (4), by adding at the end the 

22 following new subparagraph: 

23 ‘‘(G) APPLICABLE PROFESSIONAL.—The 

24 term ‘applicable professional’ means, with re25 spect to services furnished on or after the date 


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1 that is 6 months after the date of the enact2 ment of this subparagraph, a certified diabetes 

3 educator or licensed— 

4 ‘‘(i) respiratory therapist; 

5 ‘‘(ii) audiologist; 

6 ‘‘(iii) occupational therapist; 

7 ‘‘(iv) physical therapist; or 

8 ‘‘(v) speech language pathologist.’’. 

9 (c) HOME-BASED MONITORING SERVICES FOR CON10 GESTIVE HEART FAILURE AND CHRONIC OBSTRUCTIVE

11 PULMONARY DISEASE.— 

12 (1) COVERAGE OF REMOTE PATIENT MONI13 TORING SERVICES FOR CERTAIN CHRONIC HEALTH

14 CONDITIONS.— 

15 (A) IN GENERAL.—Section 1861(s)(2) of 

16 the Social Security Act (42 U.S.C. 1395x(s)(2)) 

17 is amended— 

18 (i) in subparagraph (GG), by striking 

19 ‘‘and’’ at the end; 

20 (ii) in subparagraph (HH), by insert21 ing ‘‘and’’ at the end; and 

22 (iii) by inserting after subparagraph 

23 (HH) the following new subparagraph: 


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1 ‘‘(II) applicable remote patient monitoring 

2 services (as defined in paragraph (1)(A) of sub3 section (iii));’’. 

4 (2) SERVICES DESCRIBED.—Section 1861 of 

5 the Social Security Act (42 U.S.C. 1395x) is amend6 ed by adding at the end the following new sub7 section: 

8 ‘‘(kkk) REMOTE PATIENT MONITORING SERVICES

9 FOR CHRONIC HEALTH CONDITIONS.— 

10 ‘‘(1)(A) The term ‘applicable remote patient 

11 monitoring services’ means remote patient moni12 toring services (as defined in subparagraph (B)) fur13 nished to provide for the monitoring, evaluation, and 

14 management of an individual with a covered chronic 

15 condition (as defined in paragraph (2)), insofar as 

16 such services are for the management of such chron17 ic condition. 

18 ‘‘(B) The term ‘remote patient monitoring serv19 ices’ means services furnished through remote pa20 tient monitoring technology (as defined in subpara21 graph (C)). 

22 ‘‘(C) The term ‘remote patient monitoring tech23 nology’ means a coordinated system that uses one or 

24 more home-based or mobile monitoring devices that 

25 automatically transmit vital sign data or information 


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1 on activities of daily living and may include re2 sponses to assessment questions collected on the de3 vices wirelessly or through a telecommunications 

4 connection to a server that complies with the Fed5 eral regulations (concerning the privacy of individ6 ually identifiable health information) promulgated 

7 under section 264(c) of the Health Insurance Port8 ability and Accountability Act of 1996, as part of an 

9 established plan of care for that patient that in10 cludes the review and interpretation of that data by 

11 a health care professional. 

12 ‘‘(2) For purposes of paragraph (1), the term 

13 ‘covered chronic health condition’ means applicable 

14 conditions (as defined in and applied under section 

15 1886(q)(5)) when under chronic care management 

16 (identified as of July 1, 2015, by HCPCS code 

17 99490 (and as subsequently modified by the Sec18 retary)). 

19 ‘‘(3)(A) Payment may be made under this part 

20 for applicable remote patient monitoring services 

21 provided to an individual during a period of up to 

22 90 days and such additional period as provided for 

23 under subparagraph (B). 

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1 newed by the physician who provides chronic care 

2 management to such individual if the individual con3 tinues to qualify for such management.’’. 

4 (3) PAYMENT UNDER THE PHYSICIAN FEE

5 SCHEDULE.—Section 1848 of the Social Security 

6 Act (42 U.S.C. 1395w–4) is amended— 

7 (A) in subsection (c)— 

8 (i) in paragraph (2)(B)— 

9 (I) in clause (ii)(II), by striking 

10 ‘‘and (v)’’ and inserting ‘‘(v), and 

11 (vii)’’; and 

12 (II) by adding at the end the fol13 lowing new clause: 

14 ‘‘(vii) BUDGETARY TREATMENT OF

15 CERTAIN SERVICES.—The additional ex16 penditures attributable to services de17 scribed in section 1861(s)(2)(II) shall not 

18 be taken into account in applying clause 

19 (ii)(II).’’; and 

20 (ii) by adding at the end the following 

21 new paragraph: 

22 ‘‘(7) TREATMENT OF APPLICABLE REMOTE PA23 TIENT MONITORING SERVICES.— 

24 ‘‘(A) In determining relative value units 

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1 ices (as defined in section 1861(iii)(1)(A)), the 

2 Secretary, in consultation with appropriate phy3 sician groups, practitioner groups, and supplier 

4 groups, shall take into consideration— 

5 ‘‘(i) physician or practitioner re6 sources, including physician or practitioner 

7 time and the level of intensity of services 

8 provided, based on— 

9 ‘‘(I) the frequency of evaluation 

10 necessary to manage the individual 

11 being furnished the services; 

12 ‘‘(II) the complexity of the eval13 uation, including the information that 

14 must be obtained, reviewed, and ana15 lyzed; and 

16 ‘‘(III) the number of possible di17 agnoses and the number of manage18 ment options that must be considered; 

19 ‘‘(ii) practice expense costs associated 

20 with such services, including the direct 

21 costs associated with installation and infor22 mation transmission, costs of remote pa23 tient monitoring technology (including 

24 equipment and software), device delivery 

25 costs, and resource costs necessary for paVerDate Sep 11 2014 00:03 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00227 Fmt 6652 Sfmt 6201 E:\BILLS\H1332.IH H1332

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1 tient monitoring and followup (but not in2 cluding costs of any related item or non3 physician service otherwise reimbursed 

4 under this title); and 

5 ‘‘(iii) malpractice expense resources. 

6 ‘‘(B) Using the relative value units deter7 mined in subparagraph (A), the Secretary shall 

8 provide for separate payment for such services 

9 and shall not adjust the relative value units as10 signed to other services that might otherwise 

11 have been determined to include such separately 

12 paid remote patient monitoring services.’’; and 

13 (B) in subsection (j)(3), by inserting 

14 ‘‘(2)(II),’’ after ‘‘health risk assessment),’’. 

15 SEC. 503. STARK AND AKS EXEMPTIONS. 

16 Notwithstanding any other provision of law, the Sec17 retary of Health and Human Services may exempt value18 based arrangements, alternative payment models, and 

19 technologies (as defined by the Secretary) from any provi20 sion of section 1128B or 1877 of the Social Security Act 

21 for purposes of maintaining, analyzing, or transferring 

22 electronic health records. 

23 SEC. 504. STARK TECHNICAL PENALTY. 

24 Notwithstanding any other provision of law, the Sec25 retary of Health and Human Services may institute a civil 


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1 monetary penalty for technical, nonegregious violations of 

2 section 1877 of the Social Security Act in lieu of any pen3 alty otherwise applicable for such violations under such 

4 section. 

Æ 


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