116TH CONGRESS 

2D SESSION H. R. 1425 

AN ACT 

To amend the Patient Protection and Affordable Care Act 

to provide for a Improve Health Insurance Affordability 

Fund to provide for certain reinsurance payments to 

lower premiums in the individual health insurance market. 

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

2 This Act may be cited as the ‘‘Patient Protection and 

3 Affordable Care Enhancement Act’’. 

4 SEC. 2. TABLE OF CONTENTS. 

5 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—LOWERING HEALTH CARE COSTS AND PROTECTING 

PEOPLE WITH PREEXISTING CONDITIONS 

Sec. 101. Improving affordability by expanding premium assistance for consumers. 

Sec. 102. Improving affordability by reducing out-of-pocket and premium costs 

for consumers. 

Sec. 103. Expanding affordability for working families to fix the family glitch. 

Sec. 104. Tax credit reconciliation protections for individuals receiving social 

security lump-sum payments. 

Sec. 105. Preserving State option to implement health care Marketplaces. 

Sec. 106. Establishing a Health Insurance Affordability Fund. 

Sec. 107. Rescinding the short-term limited duration insurance regulation. 

Sec. 108. Revoking section 1332 guidance. 

Sec. 109. Requiring Marketplace outreach, educational activities, and annual 

enrollment targets. 

Sec. 110. Report on effects of website maintenance during open enrollment. 

Sec. 111. Promoting consumer outreach and education. 

Sec. 112. Improving transparency and accountability in the Marketplace. 

Sec. 113. Improving awareness of health coverage options. 

Sec. 114. Promoting State innovations to expand coverage. 

Sec. 115. Strengthening network adequacy. 

Sec. 116. Protecting consumers from unreasonable rate hikes. 

Sec. 117. Eligibility of DACA recipients for qualified health plans offered 

through Exchanges. 

TITLE II—ENCOURAGING MEDICAID EXPANSION AND 

STRENGTHENING THE MEDICAID PROGRAM 

Sec. 201. Incentivizing Medicaid expansion. 

Sec. 202. Providing 12-months of continuous eligibility for Medicaid and CHIP. 

Sec. 203. Mandatory 12-months of postpartum Medicaid eligibility. 

Sec. 204. Reducing the administrative FMAP for nonexpansion States. 

Sec. 205. Enhanced reporting requirements for nonexpansion states. 

Sec. 206. Primary care pay increase. 

Sec. 207. Permanent funding for CHIP. 

Sec. 208. Permanent extension of CHIP enrollment and quality measures. 

Sec. 209. State option to increase children’s eligibility for Medicaid and CHIP. 

Sec. 210. Medicaid coverage for citizens of Freely Associated States. 

Sec. 211. Extension of full Federal medical assistance percentage to Indian 

health care providers. 
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TITLE III—LOWERING PRICES THROUGH FAIR DRUG PRICE 

NEGOTIATION 

Sec. 301. Establishing a Fair Drug Pricing Program. 

Sec. 302. Drug manufacturer excise tax for noncompliance. 

Sec. 303. Fair Price Negotiation Implementation Fund. 

TITLE IV—PUBLIC HEALTH INVESTMENTS 

Sec. 401. Supporting increased innovation. 

1 TITLE I—LOWERING HEALTH 

2 CARE COSTS AND PRO3 TECTING PEOPLE WITH PRE4 EXISTING CONDITIONS 

5 SEC. 101. IMPROVING AFFORDABILITY BY EXPANDING PRE6 MIUM ASSISTANCE FOR CONSUMERS. 

7 (a) IN GENERAL.—Section 36B(b)(3)(A) of the In8 ternal Revenue Code of 1986 is amended to read as fol9 lows: 

10 ‘‘(A) APPLICABLE PERCENTAGE.—The ap11 plicable percentage for any taxable year shall be 

12 the percentage such that the applicable percent13 age for any taxpayer whose household income is 

14 within an income tier specified in the following 

15 table shall increase, on a sliding scale in a lin16 ear manner, from the initial premium percent17 age to the final premium percentage specified in 

18 such table for such income tier: 

‘‘In the case of household 

income (expressed as 

a percent of poverty line) 

within the following income tier: 

The initial 

premium 

percentage is— 

The final 

premium 

percentage is— 

Up to 150.0 percent ................................... 0.0 0.0
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‘‘In the case of household 

income (expressed as 

a percent of poverty line) 

within the following income tier: 

The initial 

premium 

percentage is— 

The final 

premium 

percentage is— 

150.0 percent up to 200.0 percent ............. 0.0 3.0

200.0 percent up to 250.0 percent ............. 3.0 4.0

250.0 percent up to 300.0 percent ............. 4.0 6.0

300.0 percent up to 400.0 percent ............. 6.0 8.5

400.0 percent and higher ........................... 8.5 8.5’’. 

1 (b) CONFORMING AMENDMENT.—Section 

2 36B(c)(1)(A) of the Internal Revenue Code of 1986 is 

3 amended by striking ‘‘but does not exceed 400 percent’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to taxable years beginning after 

6 December 31, 2019. 

7 SEC. 102. IMPROVING AFFORDABILITY BY REDUCING OUT8 OF-POCKET AND PREMIUM COSTS FOR CON9 SUMERS. 

10 Section 1302(c)(4) of the Patient Protection and Af11 fordable Care Act (42 U.S.C. 18022(c)(4)) is amended by 

12 striking ‘‘calendar year)’’ and inserting ‘‘calendar year, 

13 based on estimates and projections for the applicable cal14 endar year of the percentage (if any) by which the average 

15 per enrollee premium for eligible employer-sponsored 

16 health plans (as defined in section 5000A(f)(2) of the In17 ternal Revenue Code of 1986) exceeds such average per 

18 enrollee premium for the preceding calendar year, as pub19 lished in the National Health Expenditure Accounts)’’. 
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1 SEC. 103. EXPANDING AFFORDABILITY FOR WORKING FAM2 ILIES TO FIX THE FAMILY GLITCH. 

3 (a) IN GENERAL.—Clause (i) of section 36B(c)(2)(C) 

4 of the Internal Revenue Code of 1986 is amended to read 

5 as follows: 

6 ‘‘(i) COVERAGE MUST BE AFFORD7 ABLE.— 

8 ‘‘(I) EMPLOYEES.—An employee 

9 shall not be treated as eligible for 

10 minimum essential coverage if such 

11 coverage consists of an eligible em12 ployer-sponsored plan (as defined in 

13 section 5000A(f)(2)) and the employ14 ee’s required contribution (within the 

15 meaning of section 5000A(e)(1)(B)) 

16 with respect to the plan exceeds 9.5 

17 percent of the employee’s household 

18 income. 

19 ‘‘(II) FAMILY MEMBERS.—An in20 dividual who is eligible to enroll in an 

21 eligible employer-sponsored plan (as 

22 defined in section 5000A(f)(2)) by 

23 reason of a relationship the individual 

24 bears to the employee shall not be 

25 treated as eligible for minimum essen26 tial coverage by reason of such eligi-
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1 bility to enroll if the employee’s re2 quired contribution (within the mean3 ing of section 5000A(e)(1)(B), deter4 mined by substituting ‘family’ for 

5 ‘self-only’) with respect to the plan ex6 ceeds 9.5 percent of the employee’s 

7 household income.’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Clause (ii) of section 36B(c)(2)(C) of the 

10 Internal Revenue Code of 1986 is amended by strik11 ing ‘‘Except as provided in clause (iii), an employee’’ 

12 and inserting ‘‘An individual’’. 

13 (2) Clause (iii) of section 36B(c)(2)(C) of such 

14 Code is amended by striking ‘‘the last sentence of 

15 clause (i)’’ and inserting ‘‘clause (i)(II)’’. 

16 (3) Clause (iv) of section 36B(c)(2)(C) of such 

17 Code is amended by striking ‘‘the 9.5 percent under 

18 clause (i)(II)’’ and inserting ‘‘the 9.5 percent under 

19 clauses (i)(I) and (i)(II)’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2021. 
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1 SEC. 104. TAX CREDIT RECONCILIATION PROTECTIONS FOR 

2 INDIVIDUALS RECEIVING SOCIAL SECURITY 

3 LUMP-SUM PAYMENTS. 

4 (a) IN GENERAL.—Section 36B(d)(2) of the Internal 

5 Revenue Code of 1986 is amended by adding at the end 

6 the following new subparagraph: 

7 ‘‘(C) EXCLUSION OF PORTION OF LUMP8 SUM SOCIAL SECURITY BENEFITS.— 

9 ‘‘(i) IN GENERAL.—The term ‘modi10 fied adjusted gross income’ shall not in11 clude so much of any lump-sum social se12 curity benefit payment as is attributable to 

13 months ending before the beginning of the 

14 taxable year. 

15 ‘‘(ii) LUMP-SUM SOCIAL SECURITY

16 BENEFIT PAYMENT.—For purposes of this 

17 subparagraph, the term ‘lump-sum social 

18 security benefit payment’ means any pay19 ment of social security benefits (as defined 

20 in section 86(d)(1)) which constitutes more 

21 than 1 month of such benefits. 

22 ‘‘(iii) ELECTION TO INCLUDE EX23 CLUDABLE AMOUNT.—A taxpayer may 

24 elect (at such time and in such manner as 

25 the Secretary may provide) to have this 
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1 subparagraph not apply for any taxable 

2 year.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2019. 

6 SEC. 105. PRESERVING STATE OPTION TO IMPLEMENT 

7 HEALTH CARE MARKETPLACES. 

8 (a) IN GENERAL.—Section 1311 of the Patient Pro9 tection and Affordable Care Act (42 U.S.C. 18031) is 

10 amended— 

11 (1) in subsection (a)— 

12 (A) in paragraph (4)(B), by striking 

13 ‘‘under this subsection’’ and inserting ‘‘under 

14 this paragraph or paragraph (1)’’; and 

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

16 paragraph: 

17 ‘‘(6) ADDITIONAL PLANNING AND ESTABLISH18 MENT GRANTS.— 

19 ‘‘(A) IN GENERAL.—There shall be appro20 priated to the Secretary, out of any moneys in 

21 the Treasury not otherwise appropriated, $200 

22 million to award grants to eligible States for 

23 the uses described in paragraph (3). 
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1 ‘‘(B) DURATION AND RENEWABILITY.—A 

2 grant awarded under subparagraph (A) shall be 

3 for a period of 2 years and may not be renewed. 

4 ‘‘(C) LIMITATION.—A grant may not be 

5 awarded under subparagraph (A) after Decem6 ber 31, 2023. 

7 ‘‘(D) ELIGIBLE STATE DEFINED.—For 

8 purposes of this paragraph, the term ‘eligible 

9 State’ means a State that, as of the date of the 

10 enactment of this paragraph, is not operating 

11 an Exchange (other than an Exchange de12 scribed in section 155.200(f) of title 45, Code 

13 of Federal Regulations).’’; and 

14 (2) in subsection (d)(5)(A)— 

15 (A) by striking ‘‘OPERATIONS.—In estab16 lishing an Exchange under this section’’ and in17 serting ‘‘OPERATIONS.— 

18 ‘‘(i) IN GENERAL.—In establishing an 

19 Exchange under this section (other than in 

20 establishing an Exchange pursuant to a 

21 grant awarded under subsection (a)(6))’’; 

22 and 

23 (B) by adding at the end the following: 

24 ‘‘(ii) ADDITIONAL PLANNING AND ES25 TABLISHMENT GRANTS.—In establishing 
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1 an Exchange pursuant to a grant awarded 

2 under subsection (a)(6), the State shall en3 sure that such Exchange is self-sustaining 

4 beginning on January 1, 2025, including 

5 allowing the Exchange to charge assess6 ments or user fees to participating health 

7 insurance issuers, or to otherwise generate 

8 funding, to support its operations.’’. 

9 (b) CLARIFICATION REGARDING FAILURE TO ESTAB10 LISH EXCHANGE OR IMPLEMENT REQUIREMENTS.—Sec11 tion 1321(c) of the Patient Protection and Affordable 

12 Care Act (42 U.S.C. 18041(c)) is amended— 

13 (1) in paragraph (1), by striking ‘‘If’’ and in14 serting ‘‘Subject to paragraph (3), if’’; and 

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

16 paragraph: 

17 ‘‘(3) CLARIFICATION.—This subsection shall 

18 not apply in the case of a State that elects to apply 

19 the requirements described in subsection (a) and 

20 satisfies the requirement described in subsection (b) 

21 on or after January 1, 2014.’’. 
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1 SEC. 106. ESTABLISHING A HEALTH INSURANCE AFFORD2 ABILITY FUND. 

3 Subtitle D of title I of the Patient Protection and 

4 Affordable Care Act is amended by inserting after part 

5 5 (42 U.S.C. 18061 et seq.) the following new part: 

6 ‘‘PART 6—IMPROVE HEALTH INSURANCE 

7 AFFORDABILITY FUND 

8 ‘‘SEC. 1351. ESTABLISHMENT OF PROGRAM. 

9 ‘‘There is hereby established the ‘Improve Health In10 surance Affordability Fund’ to be administered by the Sec11 retary of Health and Human Services, acting through the 

12 Administrator of the Centers for Medicare & Medicaid 

13 Services (in this section referred to as the ‘Adminis14 trator’), to provide funding, in accordance with this part, 

15 to the 50 States and the District of Columbia (each re16 ferred to in this section as a ‘State’) beginning on January 

17 1, 2022, for the purposes described in section 1352. 

18 ‘‘SEC. 1352. USE OF FUNDS. 

19 ‘‘(a) IN GENERAL.—A State shall use the funds allo20 cated to the State under this part for one of the following 

21 purposes: 

22 ‘‘(1) To provide reinsurance payments to health 

23 insurance issuers with respect to individuals enrolled 

24 under individual health insurance coverage (other 

25 than through a plan described in subsection (b)) of26 fered by such issuers. 
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1 ‘‘(2) To provide assistance (other than through 

2 payments described in paragraph (1)) to reduce out3 of-pocket costs, such as copayments, coinsurance, 

4 premiums, and deductibles, of individuals enrolled 

5 under qualified health plans offered on the indi6 vidual market through an Exchange. 

7 ‘‘(b) EXCLUSION OF CERTAIN GRANDFATHERED AND

8 TRANSITIONAL PLANS.—For purposes of subsection (a), 

9 a plan described in this subsection is the following: 

10 ‘‘(1) A grandfathered health plan (as defined in 

11 section 1251). 

12 ‘‘(2) A plan (commonly referred to as a ‘transi13 tional plan’) continued under the letter issued by the 

14 Centers for Medicare & Medicaid Services on No15 vember 14, 2013, to the State Insurance Commis16 sioners outlining a transitional policy for coverage in 

17 the individual and small group markets to which sec18 tion 1251 does not apply, and under the extension 

19 of the transitional policy for such coverage set forth 

20 in the Insurance Standards Bulletin Series guidance 

21 issued by the Centers for Medicare & Medicaid Serv22 ices on March 5, 2014, February 29, 2016, Feb23 ruary 13, 2017, April 9, 2018, March 25, 2019, and 

24 January 31, 2020, or under any subsequent exten25 sions thereof. 
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1 ‘‘(3) Student health insurance coverage (as de2 fined in section 147.145 of title 45, Code of Federal 

3 Regulations). 

4 ‘‘SEC. 1353. STATE ELIGIBILITY AND APPROVAL; DEFAULT 

5 SAFEGUARD. 

6 ‘‘(a) ENCOURAGING STATE OPTIONS FOR ALLOCA7 TIONS.— 

8 ‘‘(1) IN GENERAL.—To be eligible for an alloca9 tion of funds under this part for a year (beginning 

10 with 2022), a State shall submit to the Adminis11 trator an application at such time (but, in the case 

12 of allocations for 2022, not later than 90 days after 

13 the date of the enactment of this part and, in the 

14 case of allocations for a subsequent year, not later 

15 than March 1 of the previous year) and in such form 

16 and manner as specified by the Administrator con17 taining— 

18 ‘‘(A) a description of how the funds will be 

19 used; and 

20 ‘‘(B) such other information as the Admin21 istrator may require. 

22 ‘‘(2) AUTOMATIC APPROVAL.—An application so 

23 submitted is approved unless the Administrator noti24 fies the State submitting the application, not later 

25 than 60 days after the date of the submission of 
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1 such application, that the application has been de2 nied for not being in compliance with any require3 ment of this part and of the reason for such denial. 

4 ‘‘(3) 5-YEAR APPLICATION APPROVAL.—If an 

5 application of a State is approved for a purpose de6 scribed in section 1352 for a year, such application 

7 shall be treated as approved for such purpose for 

8 each of the subsequent 4 years. 

9 ‘‘(4) REVOCATION OF APPROVAL.—The ap10 proval of an application of a State, with respect to 

11 a purpose described in section 1352, may be revoked 

12 if the State fails to use funds provided to the State 

13 under this section for such purpose or otherwise fails 

14 to comply with the requirements of this section. 

15 ‘‘(b) DEFAULT FEDERAL SAFEGUARD.— 

16 ‘‘(1) 2022.—For 2022, in the case of a State 

17 that does not submit an application under subsection 

18 (a) by the 90-day submission date applicable to such 

19 year under subsection (a)(1) and in the case of a 

20 State that does submit such an application by such 

21 date that is not approved, the Administrator, in con22 sultation with the State insurance commissioner, 

23 shall, from the amount calculated under paragraph 

24 (4) for such year, carry out the purpose described in 

25 paragraph (3) in such State for such year. 
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1 ‘‘(2) 2023 AND SUBSEQUENT YEARS.—For 

2 2023 or a subsequent year, in the case of a State 

3 that does not have in effect an approved application 

4 under this section for such year, the Administrator, 

5 in consultation with the State insurance commis6 sioner, shall, from the amount calculated under 

7 paragraph (4) for such year, carry out the purpose 

8 described in paragraph (3) in such State for such 

9 year. 

10 ‘‘(3) SPECIFIED USE.—The amount described 

11 in paragraph (4), with respect to 2022 or a subse12 quent year, shall be used to carry out the purpose 

13 described in section 1352(a)(1) in each State de14 scribed in paragraph (1) or (2) for such year, as ap15 plicable, by providing reinsurance payments to 

16 health insurance issuers with respect to attachment 

17 range claims (as defined in section 1354(b)(2)), 

18 using the dollar amounts specified in subparagraph 

19 (B) of such section for such year) in an amount 

20 equal to, subject to paragraph (5), the percentage 

21 (specified for such year by the Secretary under such 

22 subparagraph) of the amount of such claims. 

23 ‘‘(4) AMOUNT DESCRIBED.—The amount de24 scribed in this paragraph, with respect to 2022 or 

25 a subsequent year, is the amount equal to the total 
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1 sum of amounts that the Secretary would otherwise 

2 estimate under section 1354(b)(2)(A)(i) for such 

3 year for each State described in paragraph (1) or 

4 (2) for such year, as applicable, if each such State 

5 were not so described for such year. 

6 ‘‘(5) ADJUSTMENT.—For purposes of this sub7 section, the Secretary may apply a percentage under 

8 paragraph (3) with respect to a year that is less 

9 than the percentage otherwise specified in section 

10 1354(b)(2)(B) for such year, if the cost of paying 

11 the total eligible attachment range claims for States 

12 described in this subsection for such year at such 

13 percentage otherwise specified would exceed the 

14 amount calculated under paragraph (4) for such 

15 year. 

16 ‘‘SEC. 1354. ALLOCATIONS. 

17 ‘‘(a) APPROPRIATION.—For the purpose of providing 

18 allocations for States under subsection (b) and payments 

19 under section 1353(b) there is appropriated, out of any 

20 money in the Treasury not otherwise appropriated, 

21 $10,000,000,000 for 2022 and each subsequent year. 

22 ‘‘(b) ALLOCATIONS.— 

23 ‘‘(1) PAYMENT.— 

24 ‘‘(A) IN GENERAL.—From amounts appro25 priated under subsection (a) for a year, the 
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1 Secretary shall, with respect to a State not de2 scribed in section 1353(b) for such year and 

3 not later than the date specified under subpara4 graph (B) for such year, allocate for such State 

5 the amount determined for such State and year 

6 under paragraph (2). 

7 ‘‘(B) SPECIFIED DATE.—For purposes of 

8 subparagraph (A), the date specified in this 

9 subparagraph is— 

10 ‘‘(i) for 2022, the date that is 45 days 

11 after the date of the enactment of this 

12 part; and 

13 ‘‘(ii) for 2023 or a subsequent year, 

14 January 1 of the respective year. 

15 ‘‘(C) NOTIFICATIONS OF ALLOCATION

16 AMOUNTS.—For 2023 and each subsequent 

17 year, the Secretary shall notify each State of 

18 the amount determined for such State under 

19 paragraph (2) for such year by not later than 

20 January 1 of the previous year. 

21 ‘‘(2) ALLOCATION AMOUNT DETERMINA22 TIONS.— 

23 ‘‘(A) IN GENERAL.—For purposes of para24 graph (1), the amount determined under this 

25 paragraph for a year for a State described in 
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1 paragraph (1)(A) for such year is the amount 

2 equal to— 

3 ‘‘(i) the amount that the Secretary es4 timates would be expended under this part 

5 for such year on attachment range claims 

6 of individuals residing in such State if such 

7 State used such funds only for the purpose 

8 described in paragraph (1) of section 

9 1352(a) at the dollar amounts and per10 centage specified under subparagraph (B) 

11 for such year; minus 

12 ‘‘(ii) the amount, if any, by which the 

13 Secretary determines— 

14 ‘‘(I) the estimated amount of 

15 premium tax credits under section 

16 36B of the Internal Revenue Code of 

17 1986 that would be attributable to in18 dividuals residing in such State for 

19 such year without application of this 

20 part; exceeds 

21 ‘‘(II) the estimated amount of 

22 premium tax credits under section 

23 36B of the Internal Revenue Code of 

24 1986 that would be attributable to in25 dividuals residing in such State for 
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1 such year if such State were a State 

2 described in section 1353(b) for such 

3 year. 

4 For purposes of the previous sentence and sec5 tion 1353(b)(3), the term ‘attachment range 

6 claims’ means, with respect to an individual, the 

7 claims for such individual that exceed a dollar 

8 amount specified by the Secretary for a year, 

9 but do not exceed a ceiling dollar amount speci10 fied by the Secretary for such year, under sub11 paragraph (B). 

12 ‘‘(B) SPECIFICATIONS.—For purposes of 

13 subparagraph (A) and section 1353(b)(3), the 

14 Secretary shall determine the dollar amounts 

15 and the percentage to be specified under this 

16 subparagraph for a year in a manner to ensure 

17 that the total amount of expenditures under 

18 this part for such year is estimated to equal the 

19 total amount appropriated for such year under 

20 subsection (a) if such expenditures were used 

21 solely for the purpose described in paragraph 

22 (1) of section 1352(a) for attachment range 

23 claims at the dollar amounts and percentage so 

24 specified for such year. 
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1 ‘‘(3) AVAILABILITY.—Funds allocated to a 

2 State under this subsection for a year shall remain 

3 available through the end of the subsequent year.’’. 

4 SEC. 107. RESCINDING THE SHORT-TERM LIMITED DURA5 TION INSURANCE REGULATION. 

6 (a) FINDINGS.—Congress finds the following: 

7 (1) On August 3, 2018, the Administration 

8 issued a final rule entitled ‘‘Short-Term, Limited9 Duration Insurance’’ (83 Fed. Reg. 38212). 

10 (2) The final rule dramatically expands the sale 

11 and marketing of insurance that— 

12 (A) may discriminate against individuals 

13 living with preexisting health conditions, includ14 ing children with complex medical needs and 

15 disabilities and their families; 

16 (B) lacks important financial protections 

17 provided by the Patient Protection and Afford18 able Care Act (Public Law 111–148), including 

19 the prohibition of annual and lifetime coverage 

20 limits and annual out-of-pocket limits, that may 

21 increase the cost of treatment and cause finan22 cial hardship to those requiring medical care, 

23 including children with complex medical needs 

24 and disabilities and their families; and 
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1 (C) excludes coverage of essential health 

2 benefits including hospitalization, prescription 

3 drugs, and other lifesaving care. 

4 (3) The implementation and enforcement of the 

5 final rule weakens critical protections for up to 130 

6 million Americans living with preexisting health con7 ditions and may place a large financial burden on 

8 those who enroll in short-term limited-duration in9 surance, which jeopardizes Americans’ access to 

10 quality, affordable health insurance. 

11 (b) PROHIBITION.—The Secretary of Health and 

12 Human Services, the Secretary of the Treasury, and the 

13 Secretary of Labor— 

14 (1) may not take any action to implement, en15 force, or otherwise give effect to the rule entitled 

16 ‘‘Short-Term, Limited Duration Insurance’’ (83 

17 Fed. Reg. 38212 (August 3, 2018)); 

18 (2) shall apply any regulation revised by such 

19 rule as if such rule had not been issued; and 

20 (3) may not promulgate any substantially simi21 lar rule. 

22 SEC. 108. REVOKING SECTION 1332 GUIDANCE. 

23 (a) FINDINGS.—Congress finds the following: 

24 (1) On October 24, 2018, the administration 

25 published new guidance to carry out section 1332 of 
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1 the Patient Protection and Affordable Care Act (42 

2 U.S.C. 18052) entitled ‘‘State Relief and Empower3 ment Waivers’’ (83 Fed. Reg. 53575). 

4 (2) The new guidance encourages States to pro5 vide health insurance coverage through insurance 

6 plans that may discriminate against individuals with 

7 preexisting health conditions, including the one in 

8 four Americans living with a disability. 

9 (3) The implementation and enforcement of the 

10 new guidance weakens protections for the millions of 

11 Americans living with preexisting health conditions 

12 and jeopardizes Americans’ access to quality, afford13 able health insurance coverage. 

14 (b) PROVIDING THAT CERTAIN GUIDANCE RELATED

15 TO WAIVERS FOR STATE INNOVATION UNDER THE PA16 TIENT PROTECTION AND AFFORDABLE CARE ACT SHALL

17 HAVE NO FORCE OR EFFECT.—Beginning July 1, 2020, 

18 the Secretary of Health and Human Services and the Sec19 retary of the Treasury may not take any action to imple20 ment, enforce, or otherwise give effect to the guidance en21 titled ‘‘State Relief and Empowerment Waivers’’ (83 Fed. 

22 Reg. 53575 (October 24, 2018)), including any such ac23 tion that would result in individuals losing health insur24 ance coverage that includes the essential health benefits 

25 package (as defined in subsection (a) of section 1302 of 
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1 the Patient Protection and Affordable Care Act (42 

2 U.S.C. 18022(a)) without regard to any waiver of any pro3 vision of such package under a waiver under such section 

4 1332), including the maternity and newborn care essential 

5 health benefit described in subsection (b)(1)(D) of such 

6 section, including any such action that would result in a 

7 decrease in the number of such individuals enrolled in cov8 erage that is at least as comprehensive as the coverage 

9 defined in section 1302(a) of the Patient Protection and 

10 Affordable Care Act (42 U.S.C. 18022(a)) compared to 

11 the number of such individuals who would have been so 

12 enrolled in such coverage had such action not been taken, 

13 including any such action that would, with respect to indi14 viduals with substance use disorders, including opioid use 

15 disorders, reduce the availability or affordability of cov16 erage that is at least as comprehensive as the coverage 

17 defined in section 1302(a) of the Patient Protection and 

18 Affordable Care Act (42 U.S.C. 18022(a)) compared to 

19 the availability or affordability, respectively, of such cov20 erage had such action not been taken, including any such 

21 action that would result, with respect to vulnerable popu22 lations (including low-income individuals, elderly individ23 uals, and individuals with serious health issues or who 

24 have a greater risk of developing serious health issues), 

25 in a decrease in the availability of coverage that is at least 
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1 as comprehensive as the coverage defined in section 

2 1302(a) of the Patient Protection and Affordable Care Act 

3 (42 U.S.C. 18022(a)) with coverage and cost sharing pro4 tections required under section 1332(b)(1)(B) of such Act 

5 (42 U.S.C. 18052(b)(1)(B)), including any such action 

6 that would, with respect to individuals with preexisting 

7 conditions, reduce the affordability of coverage that is at 

8 least as comprehensive as the coverage defined in section 

9 1302(a) of the Patient Protection and Affordable Care Act 

10 (42 U.S.C. 18022(a)) compared to the affordability of 

11 such coverage had such action not been taken, including 

12 any such action that would result in higher health insur13 ance premiums for individuals enrolled in health insurance 

14 coverage that is at least as comprehensive as the coverage 

15 defined in section 1302(b) of such Act (42 U.S.C. 

16 18022(b)), and the Secretaries may not promulgate any 

17 substantially similar guidance or rule. Nothing in the pre18 vious sentence shall be construed to affect the approval 

19 of waivers under section 1332 of the Patient Protection 

20 and Affordable Care Act (42 U.S.C. 18052) that establish 

21 reinsurance programs that are consistent with the require22 ments under subsection (b)(1) of such section (42 U.S.C. 

23 18052(b)(1)), lower health insurance premiums, and pro24 tect health insurance coverage for people with preexisting 

25 conditions. 
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1 (c) GAO REPORT ON AFFECT OF STATE INNOVATION

2 WAIVERS ON COVERAGE OF INDIVIDUALS AND ON MEN3 TAL HEALTH HEALTH CARE TREATMENT.—Not later 

4 than 1 year after the date of the enactment of this Act, 

5 the Comptroller General of the United States shall submit 

6 to Congress a report on the number of individuals ex7 pected to lose access to health insurance coverage (as de8 fined in section 2791 of the Public Health Service Act (42 

9 U.S.C. 300gg–91)) if subsection (b) were not enacted and 

10 waivers under section 1332 of the Patient Protection and 

11 Affordable Care Act (42 U.S.C. 18052) were approved 

12 under the guidance described in such subsection (b). Such 

13 report shall include an analysis of the expected effect such 

14 waivers approved under such guidance would have on men15 tal health care treatment. 

16 SEC. 109. REQUIRING MARKETPLACE OUTREACH, EDU17 CATIONAL ACTIVITIES, AND ANNUAL EN18 ROLLMENT TARGETS. 

19 (a) IN GENERAL.—Section 1321(c) of the Patient 

20 Protection and Affordable Care Act (42 U.S.C. 18041(c)), 

21 as amended by section 105(b), is further amended by add22 ing at the end the following new paragraphs: 

23 ‘‘(4) OUTREACH AND EDUCATIONAL ACTIVI24 TIES.— 
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1 ‘‘(A) IN GENERAL.—In the case of an Ex2 change established or operated by the Secretary 

3 within a State pursuant to this subsection, the 

4 Secretary shall carry out outreach and edu5 cational activities for purposes of informing in6 dividuals about qualified health plans offered 

7 through the Exchange, including by informing 

8 such individuals of the availability of coverage 

9 under such plans and financial assistance for 

10 coverage under such plans. Such outreach and 

11 educational activities shall be provided in a 

12 manner that is culturally and linguistically ap13 propriate to the needs of the populations being 

14 served by the Exchange (including hard-to15 reach populations, such as racial and sexual mi16 norities, limited English proficient populations, 

17 individuals in rural areas, veterans, and young 

18 adults) and shall be provided to populations re19 siding in high health disparity areas (as defined 

20 in subparagraph (E)) served by the Exchange, 

21 in addition to other populations served by the 

22 Exchange. 

23 ‘‘(B) LIMITATION ON USE OF FUNDS.—No 

24 funds appropriated under this paragraph shall 
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1 be used for expenditures for promoting non2 ACA compliant health insurance coverage. 

3 ‘‘(C) NON-ACA COMPLIANT HEALTH INSUR4 ANCE COVERAGE.—For purposes of subpara5 graph (B): 

6 ‘‘(i) The term ‘non-ACA compliant 

7 health insurance coverage’ means health 

8 insurance coverage, or a group health plan, 

9 that is not a qualified health plan. 

10 ‘‘(ii) Such term includes the following: 

11 ‘‘(I) An association health plan. 

12 ‘‘(II) Short-term limited duration 

13 insurance. 

14 ‘‘(D) FUNDING.—Out of any funds in the 

15 Treasury not otherwise appropriated, there are 

16 hereby appropriated for fiscal year 2022 and 

17 each subsequent fiscal year, $100,000,000 to 

18 carry out this paragraph. Funds appropriated 

19 under this subparagraph shall remain available 

20 until expended. 

21 ‘‘(E) HIGH HEALTH DISPARITY AREA DE22 FINED.—For purposes of subparagraph (A), the 

23 term ‘high health disparity area’ means a con24 tiguous geographic area that— 
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1 ‘‘(i) is located in one census tract or 

2 ZIP code; 

3 ‘‘(ii) has measurable and documented 

4 racial, ethnic, or geographic health dispari5 ties; 

6 ‘‘(iii) has a low-income population, as 

7 demonstrated by— 

8 ‘‘(I) average income below 138 

9 percent of the Federal poverty line; or 

10 ‘‘(II) a rate of participation in 

11 the special supplemental nutrition 

12 program under section 17 of the Child 

13 Nutrition Act of 1966 (42 U.S.C. 

14 1786) that is higher than the national 

15 average rate of participation in such 

16 program; 

17 ‘‘(iv) has poor health outcomes, as 

18 demonstrated by— 

19 ‘‘(I) lower life expectancy than 

20 the national average; or 

21 ‘‘(II) a higher percentage of in22 stances of low birth weight than the 

23 national average; and 
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1 ‘‘(v) is part of a Metropolitan Statis2 tical Area identified by the Office of Man3 agement and Budget. 

4 ‘‘(5) ANNUAL ENROLLMENT TARGETS.—For 

5 plan year 2021 and each subsequent plan year, in 

6 the case of an Exchange established or operated by 

7 the Secretary within a State pursuant to this sub8 section, the Secretary shall establish annual enroll9 ment targets for such Exchange for such year.’’. 

10 (b) STUDY AND REPORT.—Not later than 30 days 

11 after the date of the enactment of this Act, the Secretary 

12 of Health and Human Services shall release to Congress 

13 all aggregated documents relating to studies and data sets 

14 that were created on or after January 1, 2014, and related 

15 to marketing and outreach with respect to qualified health 

16 plans offered through Exchanges under title I of the Pa17 tient Protection and Affordable Care Act (42 U.S.C. 

18 18001 et seq.). 

19 SEC. 110. REPORT ON EFFECTS OF WEBSITE MAINTENANCE 

20 DURING OPEN ENROLLMENT. 

21 Not later than 1 year after the date of the enactment 

22 of this Act, the Comptroller General of the United States 

23 shall submit to Congress a report examining whether the 

24 Department of Health and Human Services has been con25 ducting maintenance on the website commonly referred to 
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1 as ‘‘Healthcare.gov’’ during annual open enrollment peri2 ods (as described in section 1311(c)(6)(B) of the Patient 

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

4 18031(c)(6)(B)) in such a manner so as to minimize any 

5 disruption to the use of such website resulting from such 

6 maintenance. 

7 SEC. 111. PROMOTING CONSUMER OUTREACH AND EDU8 CATION. 

9 (a) IN GENERAL.—Section 1311(i) of the Patient 

10 Protection and Affordable Care Act (42 U.S.C. 18031(i)) 

11 is amended— 

12 (1) in paragraph (2), by adding at the end the 

13 following new subparagraph: 

14 ‘‘(C) SELECTION OF RECIPIENTS.—In the 

15 case of an Exchange established and operated 

16 by the Secretary within a State pursuant to sec17 tion 1321(c), in awarding grants under para18 graph (1), the Exchange shall— 

19 ‘‘(i) select entities to receive such 

20 grants based on an entity’s demonstrated 

21 capacity to carry out each of the duties 

22 specified in paragraph (3); 

23 ‘‘(ii) not take into account whether or 

24 not the entity has demonstrated how the 

25 entity will provide information to individ-
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1 uals relating to group health plans offered 

2 by a group or association of employers de3 scribed in section 2510.3–5(b) of title 29, 

4 Code of Federal Regulations (or any suc5 cessor regulation), or short-term limited 

6 duration insurance (as defined by the Sec7 retary for purposes of section 2791(b)(5) 

8 of the Public Health Service Act); and 

9 ‘‘(iii) ensure that, each year, the Ex10 change awards such a grant to— 

11 ‘‘(I) at least one entity described 

12 in this paragraph that is a community 

13 and consumer-focused nonprofit 

14 group; and 

15 ‘‘(II) at least one entity described 

16 in subparagraph (B), which may in17 clude another community and con18 sumer-focused nonprofit group in ad19 dition to any such group awarded a 

20 grant pursuant to subclause (I). 

21 In awarding such grants, an Exchange may 

22 consider an entity’s record with respect to 

23 waste, fraud, and abuse for purposes of main24 taining the integrity of such Exchange.’’; 

25 (2) in paragraph (3)— 
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1 (A) by amending subparagraph (C) to read 

2 as follows: 

3 ‘‘(C) facilitate enrollment, including with 

4 respect to individuals with limited English pro5 ficiency and individuals with chronic illnesses, 

6 in qualified health plans, State medicaid plans 

7 under title XIX of the Social Security Act, and 

8 State child health plans under title XXI of such 

9 Act;’’; 

10 (B) in subparagraph (D), by striking 

11 ‘‘and’’ at the end; 

12 (C) in subparagraph (E), by striking the 

13 period at the end and inserting ‘‘; and’’; 

14 (D) by inserting after subparagraph (E) 

15 the following new subparagraph: 

16 ‘‘(F) provide referrals to community-based 

17 organizations that address social needs related 

18 to health outcomes.’’; and 

19 (E) by adding at the end the following 

20 flush left sentence: 

21 ‘‘The duties specified in the preceding sentence may 

22 be carried out by such a navigator at any time dur23 ing a year.’’; 

24 (3) in paragraph (4)(A)— 
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1 (A) in the matter preceding clause (i), by 

2 striking ‘‘not’’; 

3 (B) in clause (i)— 

4 (i) by inserting ‘‘not’’ before ‘‘be’’; 

5 and 

6 (ii) by striking ‘‘; or’’ and inserting a 

7 semicolon; 

8 (C) in clause (ii)— 

9 (i) by inserting ‘‘not’’ before ‘‘re10 ceive’’; and 

11 (ii) by striking the period and insert12 ing a semicolon; and 

13 (D) by adding at the end the following new 

14 clauses: 

15 ‘‘(iii) maintain physical presence in 

16 the State of the Exchange so as to allow 

17 in-person assistance to consumers; and 

18 ‘‘(iv) receive opioid specific education 

19 and training that ensures the navigator 

20 can best educate individuals on qualified 

21 health plans offered through an Exchange, 

22 specifically coverage under such plans for 

23 opioid health care treatment.’’; and 

24 (4) in paragraph (6)— 
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1 (A) by striking ‘‘FUNDING.—Grants 

2 under’’ and inserting ‘‘FUNDING.— 

3 ‘‘(A) STATE EXCHANGES.—Grants under’’; 

4 and 

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

6 subparagraph: 

7 ‘‘(B) FEDERAL EXCHANGES.—For pur8 poses of carrying out this subsection, with re9 spect to an Exchange established and operated 

10 by the Secretary within a State pursuant to sec11 tion 1321(c), the Secretary shall obligate 

12 $100,000,000 out of amounts collected through 

13 the user fees on participating health insurance 

14 issuers pursuant to section 156.50 of title 45, 

15 Code of Federal Regulations (or any successor 

16 regulations), for fiscal year 2022 and each sub17 sequent fiscal year. Such amount for a fiscal 

18 year shall remain available until expended.’’. 

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

20 this section shall apply with respect to plan years begin21 ning on or after January 1, 2021. 

22 SEC. 112. IMPROVING TRANSPARENCY AND ACCOUNT23 ABILITY IN THE MARKETPLACE. 

24 (a) OPEN ENROLLMENT REPORTS.—For plan year 

25 2021 and each subsequent year, the Secretary of Health 
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1 and Human Services (referred to in this section as the 

2 ‘‘Secretary’’), in coordination with the Secretary of the 

3 Treasury and the Secretary of Labor, shall issue biweekly 

4 public reports during the annual open enrollment period 

5 on the performance of the federally facilitated Exchange 

6 operated pursuant to section 1321(c) of the Patient Pro7 tection and Affordable Care Act (42 U.S.C. 18041(c)). 

8 Each such report shall include a summary, including in9 formation on a State-by-State basis where available, of— 

10 (1) the number of unique website visits; 

11 (2) the number of individuals who create an ac12 count; 

13 (3) the number of calls to the call center; 

14 (4) the average wait time for callers contacting 

15 the call center; 

16 (5) the number of individuals who enroll in a 

17 qualified health plan; and 

18 (6) the percentage of individuals who enroll in 

19 a qualified health plan through each of— 

20 (A) the website; 

21 (B) the call center; 

22 (C) navigators; 

23 (D) agents and brokers; 

24 (E) the enrollment assistant program; 
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1 (F) directly from issuers or web brokers; 

2 and 

3 (G) other means. 

4 (b) OPEN ENROLLMENT AFTER ACTION REPORT.— 

5 For plan year 2021 and each subsequent year, the Sec6 retary, in coordination with the Secretary of the Treasury 

7 and the Secretary of Labor, shall publish an after action 

8 report not later than 3 months after the completion of the 

9 annual open enrollment period regarding the performance 

10 of the Exchange described in subsection (a) for the appli11 cable plan year. Each such report shall include a sum12 mary, including information on a State-by-State basis 

13 where available, of— 

14 (1) the open enrollment data reported under 

15 subsection (a) for the entirety of the enrollment pe16 riod; and 

17 (2) activities related to patient navigators de18 scribed in section 1311(i) of the Patient Protection 

19 and Affordable Care Act (42 U.S.C. 18031(i)), in20 cluding— 

21 (A) the performance objectives established 

22 by the Secretary for such patient navigators; 

23 (B) the number of consumers enrolled by 

24 such a patient navigator; 
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1 (C) an assessment of how such patient 

2 navigators have met established performance 

3 metrics, including a detailed list of all patient 

4 navigators, funding received by patient naviga5 tors, and whether established performance ob6 jectives of patient navigators were met; and 

7 (D) with respect to the performance objec8 tives described in subparagraph (A)— 

9 (i) whether such objectives assess the 

10 full scope of patient navigator responsibil11 ities, including general education, plan se12 lection, and determination of eligibility for 

13 tax credits, cost-sharing reductions, or 

14 other coverage; 

15 (ii) how the Secretary worked with pa16 tient navigators to establish such objec17 tives; and 

18 (iii) how the Secretary adjusted such 

19 objectives for case complexity and other 

20 contextual factors. 

21 (c) REPORT ON ADVERTISING AND CONSUMER OUT22 REACH.—Not later than 3 months after the completion of 

23 the annual open enrollment period for plan year 2021, the 

24 Secretary shall issue a report on advertising and outreach 
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1 to consumers for the open enrollment period for plan year 

2 2021. Such report shall include a description of— 

3 (1) the division of spending on individual adver4 tising platforms, including television and radio ad5 vertisements and digital media, to raise consumer 

6 awareness of open enrollment; 

7 (2) the division of spending on individual out8 reach platforms, including email and text messages, 

9 to raise consumer awareness of open enrollment; and 

10 (3) whether the Secretary conducted targeted 

11 outreach to specific demographic groups and geo12 graphic areas. 

13 (b) PROMOTING TRANSPARENCY AND ACCOUNT14 ABILITY IN THE ADMINISTRATION’S EXPENDITURES OF

15 EXCHANGE USER FEES.—For plan year 2021 and each 

16 subsequent plan year, not later than the date that is 3 

17 months after the end of such plan year, the Secretary of 

18 Health and Human Services shall submit to the appro19 priate committees of Congress and make available to the 

20 public an annual report on the expenditures by the De21 partment of Health and Human Services of user fees col22 lected pursuant to section 156.50 of title 45, Code of Fed23 eral Regulations (or any successor regulations). Each such 

24 report for a plan year shall include a detailed accounting 

25 of the amount of such user fees collected during such plan 
39 

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1 year and of the amount of such expenditures used during 

2 such plan year for the federally facilitated Exchange oper3 ated pursuant to section 1321(c) of the Patient Protection 

4 and Affordable Care Act (42 U.S.C. 18041(c)) on out5 reach and enrollment activities, navigators, maintenance 

6 of Healthcare.gov, and operation of call centers. 

7 SEC. 113. IMPROVING AWARENESS OF HEALTH COVERAGE 

8 OPTIONS. 

9 (a) IN GENERAL.—Not later than 90 days after the 

10 date of the enactment of this Act, the Secretary of Labor, 

11 in consultation with the Secretary of Health and Human 

12 Services, shall update, and make publicly available in a 

13 prominent location on the website of the Department of 

14 Labor, the model Consolidated Omnibus Budget Reconcili15 ation Act of 1985 (referred to in this section as 

16 ‘‘COBRA’’) continuation coverage general notice and the 

17 model COBRA continuation coverage election notice devel18 oped by the Secretary of Labor for purposes of facilitating 

19 compliance of group health plans with the notification re20 quirements under section 606 of the Employee Retirement 

21 Income Security Act of 1974 (29 U.S.C. 1166). In updat22 ing each such notice, the Secretary of Labor shall include 

23 information regarding any Exchange established under 

24 title I of the Patient Protection and Affordable Care Act 

25 (42 U.S.C. 18001 et seq.) through which a qualified bene-
40 

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1 ficiary may be eligible to enroll in a qualified health plan, 

2 including— 

3 (1) the publicly accessible Internet website ad4 dress for such Exchange; 

5 (2) the publicly accessible Internet website ad6 dress for the Find Local Help directory maintained 

7 by the Department of Health and Human Services 

8 on the healthcare.gov Internet website (or a suc9 cessor website); 

10 (3) a clear explanation that— 

11 (A) an individual who is eligible for con12 tinuation coverage may also be eligible to enroll, 

13 with financial assistance, in a qualified health 

14 plan offered through such Exchange, but, in the 

15 case that such individual elects to enroll in such 

16 continuation coverage and subsequently elects 

17 to terminate such continuation coverage before 

18 the period of such continuation coverage ex19 pires, such individual will not be eligible to en20 roll in a qualified health plan offered through 

21 such Exchange during a special enrollment pe22 riod; and 

23 (B) an individual who elects to enroll in 

24 continuation coverage will remain eligible to en25 roll in a qualified health plan offered through 
41 

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1 such Exchange during an open enrollment pe2 riod and may be eligible for financial assistance 

3 with respect to enrolling in such a qualified 

4 health plan; 

5 (4) information on consumer protections with 

6 respect to enrolling in a qualified health plan offered 

7 through such Exchange, including the requirement 

8 for such a qualified health plan to provide coverage 

9 for essential health benefits (as defined in section 

10 1302(b) of such Act (42 U.S.C. 18022(b)) and the 

11 requirements applicable to such a qualified health 

12 plan under part A of title XXVII of the Public 

13 Health Service Act (42 U.S.C. 300gg et seq.); and 

14 (5) information on the availability of financial 

15 assistance with respect to enrolling in a qualified 

16 health plan, including the maximum income limit for 

17 eligibility for a premium tax credit under section 

18 36B of the Internal Revenue Code of 1986. 

19 (b) NAME OF NOTICES.—In addition to updating the 

20 model COBRA continuation coverage general notice and 

21 the model COBRA continuation coverage election notice 

22 under paragraph (1), the Secretary of Labor shall rename 

23 each such notice as the ‘‘model COBRA continuation cov24 erage and Affordable Care Act coverage general notice’’ 
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1 and the ‘‘model COBRA continuation coverage and Af2 fordable Care Act coverage election notice’’, respectively. 

3 (c) CONSUMER TESTING.—Prior to making publicly 

4 available the model COBRA continuation coverage general 

5 notice and the model COBRA continuation coverage elec6 tion notice updated under paragraph (1), the Secretary 

7 of Labor shall provide an opportunity for consumer testing 

8 of each such notice, as so updated, to ensure that each 

9 such notice is clear and understandable to the average 

10 participant or beneficiary of a group health plan. 

11 (d) DEFINITIONS.—In this subsection: 

12 (1) CONTINUATION COVERAGE.—The term 

13 ‘‘continuation coverage’’, with respect to a group 

14 health plan, has the meaning given such term in sec15 tion 602 of the Employee Retirement Income Secu16 rity Act of 1974 (29 U.S.C. 1162). 

17 (2) GROUP HEALTH PLAN.—The term ‘‘group 

18 health plan’’ has the meaning given such term in 

19 section 607 of such Act (29 U.S.C. 1167). 

20 (3) QUALIFIED BENEFICIARY.—The term 

21 ‘‘qualified beneficiary’’ has the meaning given such 

22 term in such section 607. 

23 (4) QUALIFIED HEALTH PLAN.—The term 

24 ‘‘qualified health plan’’ has the meaning given such 
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1 term in section 1301 of the Patient Protection and 

2 Affordable Care Act (42 U.S.C. 18021). 

3 SEC. 114. PROMOTING STATE INNOVATIONS TO EXPAND 

4 COVERAGE. 

5 (a) IN GENERAL.—Subject to subsection (d), the Sec6 retary of Health and Human Services shall award grants 

7 to eligible State agencies to enable such States to explore 

8 innovative solutions to promote greater enrollment in 

9 health insurance coverage in the individual and small 

10 group markets, including activities described in subsection 

11 (c). 

12 (b) ELIGIBILITY.—For purposes of subsection (a), el13 igible State agencies are Exchanges established by a State 

14 under title I of the Patient Protection and Affordable Care 

15 Act (42 U.S.C. 18001 et seq.) and State agencies with 

16 primary responsibility over health and human services for 

17 the State involved. 

18 (c) USE OF FUNDS.—For purposes of subsection (a), 

19 the activities described in this subsection are the following: 

20 (1) State efforts to streamline health insurance 

21 enrollment procedures in order to reduce burdens on 

22 consumers and facilitate greater enrollment in health 

23 insurance coverage in the individual and small group 

24 markets, including automatic enrollment and re25 enrollment of, or pre-populated applications for, in-
44 

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1 dividuals without health insurance who are eligible 

2 for tax credits under section 36B of the Internal 

3 Revenue Code of 1986, with the ability to opt out 

4 of such enrollment. 

5 (2) State investment in technology to improve 

6 data sharing and collection for the purposes of facili7 tating greater enrollment in health insurance cov8 erage in such markets. 

9 (3) Implementation of a State version of an in10 dividual mandate to be enrolled in health insurance 

11 coverage. 

12 (4) Feasibility studies to develop comprehensive 

13 and coherent State plan for increasing enrollment in 

14 the individual and small group market. 

15 (d) FUNDING.—For purposes of carrying out this 

16 section, there is hereby appropriated, out of any funds in 

17 the Treasury not otherwise appropriated, $200,000,000 

18 for each of the fiscal years 2022 through 2024. Such 

19 amount shall remain available until expended. 

20 SEC. 115. STRENGTHENING NETWORK ADEQUACY. 

21 (a) IN GENERAL.—Section 1311(d) of the Patient 

22 Protection and Affordable Care Act (42 U.S.C. 18031(d)) 

23 is amended by adding at the end the following new para24 graph: 

25 ‘‘(8) NETWORK ADEQUACY STANDARDS.— 
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1 ‘‘(A) CERTAIN EXCHANGES.—In the case 

2 of an Exchange operated by the Secretary pur3 suant section 1321(c)(1) or an Exchange de4 scribed in section 155.200(f) of title 42, Code 

5 of Federal Regulations (or a successor regula6 tion), the Exchange shall require each qualified 

7 health plan offered through such Exchange to 

8 meet such quantitative network adequacy stand9 ards as the Secretary may prescribe for pur10 poses of this subparagraph. 

11 ‘‘(B) STATE EXCHANGES.—In the case of 

12 an Exchange not described in subparagraph 

13 (A), the Exchange shall establish quantitative 

14 network adequacy standards with respect to 

15 qualified health plans offered through such Ex16 change and require such plans to meet such 

17 standards.’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply with respect to plan years begin20 ning on or after January 1, 2022. 

21 SEC. 116. PROTECTING CONSUMERS FROM UNREASONABLE 

22 RATE HIKES. 

23 (a) PROTECTION FROM EXCESSIVE, UNJUSTIFIED, 

24 OR UNFAIRLY DISCRIMINATORY RATES.—The first sec25 tion 2794 of the Public Health Service Act (42 U.S.C. 
46 

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1 300gg–94), as added by section 1003 of the Patient Pro2 tection and Affordable Care Act (Public Law 111–148), 

3 is amended by adding at the end the following new sub4 section: 

5 ‘‘(e) PROTECTION FROM EXCESSIVE, UNJUSTIFIED, 

6 OR UNFAIRLY DISCRIMINATORY RATES.— 

7 ‘‘(1) AUTHORITY OF STATES.—Nothing in this 

8 section shall be construed to prohibit a State from 

9 imposing requirements (including requirements re10 lating to rate review standards and procedures and 

11 information reporting) on health insurance issuers 

12 with respect to rates that are in addition to the re13 quirements of this section and are more protective of 

14 consumers than such requirements. 

15 ‘‘(2) CONSULTATION IN RATE REVIEW PROC16 ESS.—In carrying out this section, the Secretary 

17 shall consult with the National Association of Insur18 ance Commissioners and consumer groups. 

19 ‘‘(3) DETERMINATION OF WHO CONDUCTS RE20 VIEWS FOR EACH STATE.—The Secretary shall de21 termine, after the date of enactment of this section 

22 and periodically thereafter, the following: 

23 ‘‘(A) In which markets in each State the 

24 State insurance commissioner or relevant State 

25 regulator shall undertake the corrective actions 
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1 under paragraph (4), based on the Secretary’s 

2 determination that the State regulator is ade3 quately undertaking and utilizing such actions 

4 in that market. 

5 ‘‘(B) In which markets in each State the 

6 Secretary shall undertake the corrective actions 

7 under paragraph (4), in cooperation with the 

8 relevant State insurance commissioner or State 

9 regulator, based on the Secretary’s determina10 tion that the State is not adequately under11 taking and utilizing such actions in that mar12 ket. 

13 ‘‘(4) CORRECTIVE ACTION FOR EXCESSIVE, UN14 JUSTIFIED, OR UNFAIRLY DISCRIMINATORY

15 RATES.—In accordance with the process established 

16 under this section, the Secretary or the relevant 

17 State insurance commissioner or State regulator 

18 shall take corrective actions to ensure that any ex19 cessive, unjustified, or unfairly discriminatory rates 

20 are corrected prior to implementation, or as soon as 

21 possible thereafter, through mechanisms such as— 

22 ‘‘(A) denying rates; 

23 ‘‘(B) modifying rates; or 

24 ‘‘(C) requiring rebates to consumers. 
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1 ‘‘(5) NONCOMPLIANCE.—Failure to comply with 

2 any corrective action taken by the Secretary under 

3 this subsection may result in the application of civil 

4 monetary penalties under section 2723 and, if the 

5 Secretary determines appropriate, make the plan in6 volved ineligible for classification as a qualified 

7 health plan.’’. 

8 (b) CLARIFICATION OF REGULATORY AUTHORITY.— 

9 Such section is further amended— 

10 (1) in subsection (a)— 

11 (A) in the heading, by striking ‘‘PRE12 MIUM’’ and inserting ‘‘RATE’’; 

13 (B) in paragraph (1), by striking ‘‘unrea14 sonable increases in premiums’’ and inserting 

15 ‘‘potentially excessive, unjustified, or unfairly 

16 discriminatory rates, including premiums,’’; and 

17 (C) in paragraph (2)— 

18 (i) by striking ‘‘an unreasonable pre19 mium increase’’ and inserting ‘‘a poten20 tially excessive, unjustified, or unfairly dis21 criminatory rate’’; 

22 (ii) by striking ‘‘the increase’’ and in23 serting ‘‘the rate’’; and 

24 (iii) by striking ‘‘such increases’’ and 

25 inserting ‘‘such rates’’; and 
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1 (2) in subsection (b)— 

2 (A) by striking ‘‘premium increases’’ each 

3 place it appears and inserting ‘‘rates’’; and 

4 (B) in paragraph (2)(B), by striking ‘‘pre5 mium’’ and inserting ‘‘rate’’. 

6 (c) CONFORMING AMENDMENTS.—Title XXVII of 

7 the Public Health Service Act (42 U.S.C. 300gg et seq.) 

8 is amended— 

9 (1) in section 2723 (42 U.S.C. 300gg–22), as 

10 redesignated by the Patient Protection and Afford11 able Care Act— 

12 (A) in subsection (a)— 

13 (i) in paragraph (1), by inserting 

14 ‘‘and section 2794’’ after ‘‘this part’’; and 

15 (ii) in paragraph (2), by inserting ‘‘or 

16 section 2794’’ after ‘‘this part’’; and 

17 (B) in subsection (b)— 

18 (i) in paragraph (1), by inserting 

19 ‘‘and section 2794’’ after ‘‘this part’’; and 

20 (ii) in paragraph (2)— 

21 (I) in subparagraph (A), by in22 serting ‘‘or section 2794 that is’’ after 

23 ‘‘this part’’; and 
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1 (II) in subparagraph (C)(ii), by 

2 inserting ‘‘or section 2794’’ after 

3 ‘‘this part’’; and 

4 (2) in section 2761 (42 U.S.C. 300gg–61)— 

5 (A) in subsection (a)— 

6 (i) in paragraph (1), by inserting 

7 ‘‘and section 2794’’ after ‘‘this part’’; and 

8 (ii) in paragraph (2)— 

9 (I) by inserting ‘‘or section 

10 2794’’ after ‘‘set forth in this part’’; 

11 and 

12 (II) by inserting ‘‘and section 

13 2794’’ after ‘‘the requirements of this 

14 part’’; and 

15 (B) in subsection (b)— 

16 (i) by inserting ‘‘and section 2794’’ 

17 after ‘‘this part’’; and 

18 (ii) by inserting ‘‘and section 2794’’ 

19 after ‘‘part A’’. 

20 (d) APPLICABILITY TO GRANDFATHERED PLANS.— 

21 Section 1251(a)(4)(A) of the Patient Protection and Af22 fordable Care Act (Public Law 111–148), as added by sec23 tion 2301 of the Health Care and Education Reconcili24 ation Act of 2010 (Public Law 111–152), is amended by 

25 adding at the end the following: 
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1 ‘‘(v) Section 2794 (relating to reason2 ableness of rates with respect to health in3 surance coverage).’’. 

4 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated to carry out this Act 

6 such sums as may be necessary. 

7 (f) EFFECTIVE DATE.—The amendments made by 

8 this section shall take effect on the date of enactment of 

9 this Act and shall be implemented with respect to health 

10 plans beginning not later than January 1, 2022. 

11 SEC. 117. ELIGIBILITY OF DACA RECIPIENTS FOR QUALI12 FIED HEALTH PLANS OFFERED THROUGH EX13 CHANGES. 

14 (a) IN GENERAL.—Section 1312(f)(3) of the Patient 

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

16 18032(f)(3)) is amended— 

17 (1) by striking ‘‘or an alien lawfully present in 

18 the United States’’ and inserting ‘‘, an alien lawfully 

19 present in the United States, or a DACA recipient’’; 

20 and 

21 (2) by adding at the end the following: ‘‘For 

22 purposes of the previous sentence, the term ‘DACA 

23 recipient’ means an individual who was granted de24 ferred action pursuant to the Deferred Action for 

25 Childhood Arrivals Program announced in the 
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1 memorandum of the Secretary of Homeland Security 

2 dated June 15, 2012, and for whom such grant re3 mains valid.’’. 

4 (b) APPLICATION OF REDUCED COST-SHARING.— 

5 Section 1402(e)(2) of the Patient Protection and Afford6 able Care Act (42 U.S.C. 18071(e)(2)) is amended by add7 ing at the end the following: ‘‘A DACA recipient (as de8 fined in section 1312(f)(3)) shall be treated as lawfully 

9 present for purposes of this section.’’. 

10 (c) ELIGIBILITY FOR ADVANCE PAYMENTS.—Section 

11 1412(d) of the Patient Protection and Affordable Care Act 

12 (42 U.S.C. 18082(d)) is amended by adding at the end 

13 the following: ‘‘For purposes of the previous sentence, a 

14 DACA recipient (as defined in section 1312(f)(3)) shall 

15 be treated as lawfully present in the United States.’’. 

16 (d) VERIFICATION OF ELIGIBILITY.—Section 

17 1411(c)(2)(B) of the Patient Protection and Affordable 

18 Care Act (42 U.S.C. 18081(c)(2)(B)) is amended— 

19 (1) in clause (i)(I), by inserting ‘‘or a DACA 

20 recipient (as defined in section 1312(f)(3))’’ after 

21 ‘‘an alien lawfully present in the United States’’; 

22 and 

23 (2) in clause (ii), by inserting ‘‘or a DACA re24 cipient (as defined in section 1312(f)(3))’’ after ‘‘an 

25 alien lawfully present in the United States’’. 
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1 (e) APPLICATION OF TAX CREDIT FOR COVERAGE

2 UNDER A QUALIFIED HEALTH PLAN.—Section 36B(e)(2) 

3 of the Internal Revenue Code of 1986 is amended by add4 ing at the end the following: ‘‘A DACA recipient (as de5 fined in section 1312(f)(3) of the Patient Protection and 

6 Affordable Care Act) shall be treated as lawfully present 

7 for purposes of this section.’’. 

8 (f) EFFECTIVE DATE.—The amendments made by 

9 this section shall take effect on January 1, 2021. 

10 TITLE II—ENCOURAGING MED11 ICAID EXPANSION AND 

12 STRENGTHENING THE MED13 ICAID PROGRAM 

14 SEC. 201. INCENTIVIZING MEDICAID EXPANSION. 

15 (a) IN GENERAL.—Section 1905(y)(1) of the Social 

16 Security Act (42 U.S.C. 1396d(y)(1)) is amended— 

17 (1) in subparagraph (A), by striking ‘‘2014, 

18 2015, and 2016’’ and inserting ‘‘each of the first 3 

19 consecutive 12-month periods in which the State 

20 provides medical assistance to newly eligible individ21 uals’’; 

22 (2) in subparagraph (B), by striking ‘‘2017’’ 

23 and inserting ‘‘the fourth consecutive 12-month pe24 riod in which the State provides medical assistance 

25 to newly eligible individuals’’; 
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1 (3) in subparagraph (C), by striking ‘‘2018’’ 

2 and inserting ‘‘the fifth consecutive 12-month period 

3 in which the State provides medical assistance to 

4 newly eligible individuals’’; 

5 (4) in subparagraph (D), by striking ‘‘2019’’ 

6 and inserting ‘‘the sixth consecutive 12-month period 

7 in which the State provides medical assistance to 

8 newly eligible individuals’’; and 

9 (5) in subparagraph (E), by striking ‘‘2020 and 

10 each year thereafter’’ and inserting ‘‘the seventh 

11 consecutive 12-month period in which the State pro12 vides medical assistance to newly eligible individuals 

13 and each such period thereafter’’. 

14 (b) EFFECTIVE DATE.—Beginning on January 1, 

15 2022, the amendments made by subsection (a) shall take 

16 effect as if included in the enactment of the Patient Pro17 tection and Affordable Care Act (Public Law 111–148). 

18 SEC. 202. PROVIDING 12-MONTHS OF CONTINUOUS ELIGI19 BILITY FOR MEDICAID AND CHIP. 

20 (a) REQUIREMENT OF 12-MONTH CONTINUOUS EN21 ROLLMENT UNDER MEDICAID.—Section 1902(e)(12) of 

22 the Social Security Act (42 U.S.C. 1396a(e)(12)) is 

23 amended to read as follows: 

24 ‘‘(12) 12-MONTH CONTINUOUS ENROLLMENT.— 

25 Notwithstanding any other provision of this title, a 
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1 State plan approved under this title (or under any 

2 waiver of such plan approved pursuant to section 

3 1115 or section 1915), shall provide that an indi4 vidual who is determined to be eligible for benefits 

5 under such plan (or waiver) shall remain eligible and 

6 enrolled for such benefits through the end of the 

7 month in which the 12-month period (beginning on 

8 the date of determination of eligibility) ends.’’. 

9 (b) REQUIREMENT OF 12-MONTH CONTINUOUS EN10 ROLLMENT UNDER CHIP.— 

11 (1) IN GENERAL.—Section 2102(b) of the So12 cial Security Act (42 U.S.C. 1397bb(b)) is amended 

13 by adding at the end the following new paragraph: 

14 ‘‘(6) REQUIREMENT FOR 12-MONTH CONTIN15 UOUS ENROLLMENT.—Notwithstanding any other 

16 provision of this title, a State child health plan that 

17 provides child health assistance under this title 

18 through a means other than described in section 

19 2101(a)(2), shall provide that an individual who is 

20 determined to be eligible for benefits under such 

21 plan shall remain eligible and enrolled for such bene22 fits through the end of the month in which the 12- 

23 month period (beginning on the date of determina24 tion of eligibility) ends.’’. 
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1 (2) CONFORMING AMENDMENT.—Section 

2 2105(a)(4)(A) of the Social Security Act (42 U.S.C. 

3 1397ee(a)(4)(A)) is amended— 

4 (A) by striking ‘‘has elected the option of’’ 

5 and inserting ‘‘is in compliance with the re6 quirement for’’; and 

7 (B) by striking ‘‘applying such policy 

8 under its State child health plan under this 

9 title’’ and inserting ‘‘in compliance with section 

10 2102(b)’’. 

11 (c) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as provided in para13 graph (2) or (3), the amendments made by sub14 sections (a) and (b) shall apply to determinations 

15 (and redeterminations) of eligibility made on or after 

16 the date that is 12 months after the last day of the 

17 emergency period described in section 1135(g)(1)(B) 

18 of the Social Security Act (42 U.S.C. 1320b– 

19 5(g)(1)(B)). 

20 (2) EXTENSION OF EFFECTIVE DATE FOR

21 STATE LAW AMENDMENT.—In the case of a State 

22 plan under title XIX or State child health plan 

23 under title XXI of the Social Security Act (42 

24 U.S.C. 1396 et seq.; 42 U.S.C. 1397aa et seq.) 

25 which the Secretary of Health and Human Services 
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1 determines requires State legislation (other than leg2 islation appropriating funds) in order for the respec3 tive plan to meet the additional requirement imposed 

4 by the amendment made by subsection (a) or (b), re5 spectively, the respective plan shall not be regarded 

6 as failing to comply with the requirements of such 

7 title solely on the basis of its failure to meet such 

8 applicable additional requirement before the first 

9 day of the first calendar quarter beginning after the 

10 close of the first regular session of the State legisla11 ture that begins after the date of enactment of this 

12 Act. For purposes of the previous sentence, in the 

13 case of a State that has a 2-year legislative session, 

14 each year of the session is considered to be a sepa15 rate regular session of the State legislature. 

16 (3) OPTION TO IMPLEMENT 12-MONTH CONTIN17 UOUS ELIGIBILITY PRIOR TO EFFECTIVE DATE.—A 

18 State may elect through a State plan amendment 

19 under title XIX or XXI of the Social Security Act 

20 (42 U.S.C. 1396 et seq.; 42 U.S.C. 1397aa et seq.) 

21 to apply the amendment made by subsection (a) or 

22 (b), respectively, on any date prior to the date speci23 fied in paragraph (1), but not sooner than the date 

24 of the enactment of this Act. 
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1 SEC. 203. MANDATORY 12-MONTHS OF POSTPARTUM MED2 ICAID ELIGIBILITY. 

3 (a) EXTENDING CONTINUOUS MEDICAID AND CHIP 

4 COVERAGE FOR PREGNANT AND POSTPARTUM WOMEN.— 

5 (1) MEDICAID.—Title XIX of the Social Secu6 rity Act (42 U.S.C. 1396 et seq.) is amended— 

7 (A) in section 1902(l)(1)(A), by striking 

8 ‘‘60-day period’’ and inserting ‘‘365-day pe9 riod’’; 

10 (B) in section 1902(e)(6), by striking ‘‘60- 

11 day period’’ and inserting ‘‘365-day period’’; 

12 (C) in section 1903(v)(4)(A)(i), by striking 

13 ‘‘60-day period’’ and inserting ‘‘365-day pe14 riod’’; and 

15 (D) in section 1905(a), in the 4th sentence 

16 in the matter following paragraph (30), by 

17 striking ‘‘60-day period’’ and inserting ‘‘365- 

18 day period’’. 

19 (2) CHIP.—Section 2112 of the Social Security 

20 Act (42 U.S.C. 1397ll) is amended by striking ‘‘60- 

21 day period’’ each place it appears and inserting 

22 ‘‘365-day period’’. 

23 (b) REQUIRING FULL BENEFITS FOR PREGNANT

24 AND POSTPARTUM WOMEN.— 

25 (1) MEDICAID.— 
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1 (A) IN GENERAL.—Paragraph (5) of sec2 tion 1902(e) of the Social Security Act (24 

3 U.S.C. 1396a(e)) is amended to read as follows: 

4 ‘‘(5) Any woman who is eligible for medical as5 sistance under the State plan or a waiver of such 

6 plan and who is, or who while so eligible becomes, 

7 pregnant, shall continue to be eligible under the plan 

8 or waiver for medical assistance through the end of 

9 the month in which the 365-day period (beginning 

10 on the last day of her pregnancy) ends, regardless 

11 of the basis for the woman’s eligibility for medical 

12 assistance, including if the woman’s eligibility for 

13 medical assistance is on the basis of being preg14 nant.’’. 

15 (B) CONFORMING AMENDMENT.—Section 

16 1902(a)(10) of the Social Security Act (42 

17 U.S.C. 1396a(a)(10)) is amended in the matter 

18 following subparagraph (G) by striking ‘‘(VII) 

19 the medical assistance’’ and all that follows 

20 through ‘‘complicate pregnancy,’’. 

21 (2) CHIP.—Section 2107(e)(1) of the Social 

22 Security Act (42 U.S.C. 1397gg(e)(1)) is amended— 

23 (A) by redesignating subparagraphs (H) 

24 through (S) as subparagraphs (I) through (T), 

25 respectively; and 
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1 (B) by inserting after subparagraph (G), 

2 the following: 

3 ‘‘(H) Section 1902(e)(5) (requiring 365- 

4 day continuous coverage for pregnant and 

5 postpartum women).’’. 

6 (c) MAINTENANCE OF EFFORT.— 

7 (1) MEDICAID.—Section 1902 of the Social Se8 curity Act (42 U.S.C. 1396a) is amended— 

9 (A) in paragraph (74), by striking ‘‘sub10 section (gg); and’’ and inserting ‘‘subsections 

11 (gg) and (qq);’’; and 

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

13 subsection: 

14 ‘‘(qq) MAINTENANCE OF EFFORT RELATED TO LOW15 INCOME PREGNANT WOMEN.—For calendar quarters be16 ginning on or after the effective date described in section 

17 203(d) of the Patient Protection and Affordable Care En18 hancement Act, and before January 1, 2023, no Federal 

19 payment shall be made to a State under section 1903(a) 

20 for amounts expended under a State plan under this title 

21 or a waiver of such plan if the State— 

22 ‘‘(1) has in effect under such plan eligibility 

23 standards, methodologies, or procedures for individ24 uals described in subsection (l)(1) who are eligible 

25 for medical assistance under the State plan or waiv-
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1 er under subsection (a)(10)(A)(ii)(IX) that are more 

2 restrictive than the eligibility standards, methodolo3 gies, or procedures, respectively, for such individuals 

4 under such plan or waiver that are in effect on the 

5 date of the enactment of this subsection; or 

6 ‘‘(2) provides medical assistance to individuals 

7 described in subsection (l)(1) who are eligible for 

8 medical assistance under such plan or waiver under 

9 subsection (a)(10)(A)(ii)(IX) at a level that is less 

10 than the level at which the State provides such as11 sistance to such individuals under such plan or waiv12 er on the date of the enactment of this subsection.’’. 

13 (2) CHIP.—Section 2112 of the Social Security 

14 Act (42 U.S.C. 1397ll), as amended by subsection 

15 (b), is further amended by adding at the end the fol16 lowing subsection: 

17 ‘‘(g) MAINTENANCE OF EFFORT.—For calendar 

18 quarters beginning on or after the effective date described 

19 in section 203(d) of the Patient Protection and Affordable 

20 Care Enhancement Act, and before January 1, 2023, no 

21 payment may be made under section 2105(a) with respect 

22 to a State child health plan if the State— 

23 ‘‘(1) has in effect under such plan eligibility 

24 standards, methodologies, or procedures for targeted 

25 low-income pregnant women that are more restric-
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1 tive than the eligibility standards, methodologies, or 

2 procedures, respectively, under such plan that are in 

3 effect on the date of the enactment of this sub4 section; or 

5 ‘‘(2) provides pregnancy-related assistance to 

6 targeted low-income pregnant women under such 

7 plan at a level that is less than the level at which 

8 the State provides such assistance to such women 

9 under such plan on the date of the enactment of this 

10 subsection.’’. 

11 (d) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as provided under 

13 paragraph (2), the amendments made by subsections 

14 (a) and (b) shall take effect on (and the effective 

15 date described in this subsection shall be) the first 

16 day of the calendar quarter during which the last 

17 day of the emergency period described in section 

18 1135(g)(1)(B) of the Social Security Act (42 U.S.C. 

19 1320b–5(g)(1)(B)) occurs. 

20 (2) EXTENSION OF EFFECTIVE DATE FOR

21 STATE LAW AMENDMENT.—In the case of a State 

22 plan under title XIX or State child health plan 

23 under title XXI of the Social Security Act (42 

24 U.S.C. 1396 et seq.; 42 U.S.C. 1397aa et seq.) 

25 which the Secretary of Health and Human Services 
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1 determines requires State legislation (other than leg2 islation appropriating funds) in order for the respec3 tive plan to meet the additional requirement imposed 

4 by the amendments made by subsection (a) or (b), 

5 respectively, the respective plan shall not be re6 garded as failing to comply with the requirements of 

7 such title solely on the basis of its failure to meet 

8 such applicable additional requirement before the 

9 first day of the first calendar quarter beginning 

10 after the close of the first regular session of the 

11 State legislature that begins after the date of enact12 ment of this Act. For purposes of the previous sen13 tence, in the case of a State that has a 2-year legis14 lative session, each year of the session is considered 

15 to be a separate regular session of the State legisla16 ture. 

17 SEC. 204. REDUCING THE ADMINISTRATIVE FMAP FOR 

18 NONEXPANSION STATES. 

19 Section 1903 of the Social Security Act (42 U.S.C. 

20 1396b) is amended— 

21 (1) in subsection (a)(7), by inserting ‘‘sub22 section (bb) and’’ before ‘‘section 1919(g)(3)(B)’’; 

23 and 

24 (2) by adding at the end the following new sub25 section: 
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1 ‘‘(bb) REDUCTION OF FEDERAL PAYMENTS FOR

2 CERTAIN ADMINISTRATIVE COSTS OF NONEXPANSION

3 STATES.— 

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

5 does not provide under the State plan of such State 

6 (or waiver of such plan) for making medical assist7 ance available in accordance with section 1902(k)(1) 

8 to all individuals described in section 

9 1902(a)(10)(i)(VIII) for a calendar quarter begin10 ning on or after October 1, 2022, the Secretary may 

11 reduce the percentage specified in subsection (a)(7) 

12 for amounts described in such subsection expended 

13 during such quarter by such State by the number of 

14 percentage points specified in paragraph (2) for such 

15 quarter. 

16 ‘‘(2) AMOUNT OF REDUCTION.—For purposes 

17 of paragraph (1), the number of percentage points 

18 specified in this paragraph for a calendar quarter is 

19 the following: 

20 ‘‘(A) For the calendar quarter beginning 

21 on October 1, 2022, 0.5. 

22 ‘‘(B) For a calendar quarter beginning on 

23 or after January 1, 2023, and ending before 

24 July 1, 2027, the number of percentage points 
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1 specified under this paragraph for the previous 

2 quarter, plus 0.5. 

3 ‘‘(C) For a calendar quarter beginning on 

4 or after July 1, 2027, 10. 

5 ‘‘(3) DEFINITION.—For purposes of this sub6 section, the term ‘State’ means a State that is one 

7 of the 50 States or the District of Columbia.’’. 

8 SEC. 205. ENHANCED REPORTING REQUIREMENTS FOR 

9 NONEXPANSION STATES. 

10 Section 1903 of the Social Security Act (42 U.S.C. 

11 1396b), as amended by section 204, is further amended— 

12 (1) in subsection (a)(7), by striking ‘‘subsection 

13 (bb)’’ and inserting ‘‘subsections (bb) and (cc)’’; and 

14 (2) by adding at the end the following new sub15 section: 

16 ‘‘(cc) REDUCTION OF FEDERAL PAYMENTS FOR CER17 TAIN ADMINISTRATIVE COSTS OF NONEXPANSION STATES

18 THAT DO NOT SATISFY REPORTING REQUIREMENTS.— 

19 ‘‘(1) IN GENERAL.— 

20 ‘‘(A) REDUCTION.—In the case of a non21 expansion State, with respect to a fiscal year 

22 (beginning with fiscal year 2023) that does not 

23 satisfy the reporting requirement under para24 graph (2) for such fiscal year, the percentage 

25 specified in subsection (a)(7) for amounts de-
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1 scribed in such subsection expended by such 

2 State during a calendar quarter described in 

3 paragraph (4) with respect to such fiscal year, 

4 subject to subparagraph (B), shall be reduced 

5 by the number of percentage points specified in 

6 paragraph (4) for the respective calendar quar7 ter. 

8 ‘‘(B) EXCEPTION.—In the case of a non9 expansion State that is subject to a reduction 

10 under subparagraph (A) for the calendar quar11 ter described in paragraph (4)(A) with respect 

12 to a fiscal year, if the State satisfies the criteria 

13 described in subparagraphs (A), (B), and (C) of 

14 paragraph (2) (without regard to the dates 

15 specified in such subparagraph (A) and (C)) be16 fore the beginning of a subsequent calendar 

17 quarter described in paragraph (4) with respect 

18 to such fiscal year, then such State shall not be 

19 subject to a reduction under subparagraph (A) 

20 for such subsequent calendar quarter. 

21 ‘‘(2) REPORTING REQUIREMENT.—For pur22 poses of paragraph (1), a nonexpansion State satis23 fies the reporting requirement under this paragraph 

24 for a fiscal year, if the nonexpansion State— 
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1 ‘‘(A) by not later than January 1 of such 

2 year, posts on the public website of the State 

3 agency administering the State plan, the infor4 mation described in paragraph (3) with respect 

5 to such State for the previous year; 

6 ‘‘(B) provides for at least a 30-day period 

7 for notice and comment on such information; 

8 and 

9 ‘‘(C) by not later than March 1 of such 

10 year, submits to the Secretary a complete re11 port including such information, comments sub12 mitted pursuant to subparagraph (B), and a re13 sponse by the State to each such comment. 

14 ‘‘(3) INFORMATION DESCRIBED.—The informa15 tion described in this paragraph, with respect to a 

16 State and year, is the following: 

17 ‘‘(A) The the estimated number of individ18 uals who were uninsured for at least 6 months, 

19 shown by age-groups of 0 to 18 years of age 

20 and of 19 years of age to 64 years of age, as 

21 well as a detailed description of the basis for 

22 the estimates. 

23 ‘‘(B) The estimated number of the individ24 uals estimated under subparagraph (A) in the 

25 State who would be eligible for medical assist-
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1 ance under the State plan if the State were to 

2 make medical assistance under the State plan 

3 available in accordance with section 1902(k)(1) 

4 to all individuals described in section 

5 1902(a)(10)(i)(VIII), and a detailed description 

6 of the basis for the estimates. 

7 ‘‘(C) A comprehensive listing of State in8 come eligibility criteria for all mandatory and 

9 optional Medicaid eligibility groups for which 

10 the State plan provides medical assistance 

11 (other than with respect to individuals described 

12 in clause (i)(II), (ii)(VI), or (ii)(XXII) of sec13 tion 1902(a)(10)(A)). 

14 ‘‘(D) The total amount of hospital uncom15 pensated-care costs and a breakdown of the 

16 source of such costs, as well as a breakdown for 

17 rural and non-rural hospitals. 

18 ‘‘(4) PERCENTAGE DESCRIBED.—For purposes 

19 of paragraph (1), a calendar quarter described in 

20 this paragraph, with respect to a fiscal year, and the 

21 percentage points described in this paragraph for 

22 such quarter, with respect to a State, are— 

23 ‘‘(A) for the calendar quarter beginning on 

24 the April 1 occurring during such fiscal year, 

25 0.5 percentage points; 
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1 ‘‘(B) for the calendar quarter beginning on 

2 the July 1 occurring during such fiscal year, 

3 1.0 percentage point; and 

4 ‘‘(C) for the calendar quarter beginning on 

5 the October 1 occurring during the subsequent 

6 fiscal year, 1.5 percentage points. 

7 ‘‘(5) PAYMENT IN CASE OF REPORTING

8 STATE.—The expenses incurred by a non-expansion 

9 State, with respect to any calendar quarter with re10 spect to a fiscal year (beginning with 2021), for car11 rying out subparagraphs (A) through (C) of para12 graph (2) shall, for purposes of section 1903(a)(7), 

13 be considered to be expenses necessary for the prop14 er and efficient administration of the State plan 

15 under this title. 

16 ‘‘(6) NONEXPANION STATE DEFINED.—For 

17 purposes of this subsection, the term ‘nonexpansion 

18 State’ means, with respect to a fiscal year, a State 

19 that as of the first quarter of such fiscal year does 

20 not provide under the State plan of such State (or 

21 waiver of such plan) for making medical assistance 

22 available in accordance with section 1902(k)(1) to 

23 all individuals described in section 

24 1902(a)(10)(i)(VIII).’’. 
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1 SEC. 206. PRIMARY CARE PAY INCREASE. 

2 (a) RENEWAL OF PAYMENT FLOOR; ADDITIONAL

3 PROVIDERS.— 

4 (1) IN GENERAL.—Section 1902(a)(13) of the 

5 Social Security Act (42 U.S.C. 1396a(a)(13)) is 

6 amended by striking subparagraph (C) and inserting 

7 the following: 

8 ‘‘(C) payment for primary care services (as 

9 defined in subsection (jj)) at a rate that is not 

10 less than 100 percent of the payment rate that 

11 applies to such services and physician under 

12 part B of title XVIII (or, if greater, the pay13 ment rate that would be applicable under such 

14 part if the conversion factor under section 

15 1848(d) for the year involved were the conver16 sion factor under such section for 2009), and 

17 that is not less than the rate that would other18 wise apply to such services under this title if 

19 the rate were determined without regard to this 

20 subparagraph, and that are— 

21 ‘‘(i) furnished during 2013 and 2014, 

22 by a physician with a primary specialty 

23 designation of family medicine, general in24 ternal medicine, or pediatric medicine; or 

25 ‘‘(ii) furnished during the period that 

26 begins on the first day of the first month 
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1 that begins one year after the date of en2 actment of the Patient Protection and Af3 fordable Care Enhancement Act and ends 

4 September 30, 2024— 

5 ‘‘(I) by a physician with a pri6 mary specialty designation of family 

7 medicine, general internal medicine, 

8 or pediatric medicine, but only if the 

9 physician self-attests that the physi10 cian is Board certified in family medi11 cine, general internal medicine, or pe12 diatric medicine; 

13 ‘‘(II) by a physician with a pri14 mary specialty designation of obstet15 rics and gynecology, but only if the 

16 physician self-attests that the physi17 cian is Board certified in obstetrics 

18 and gynecology; 

19 ‘‘(III) by an advanced practice 

20 clinician, as defined by the Secretary, 

21 that works under the supervision of— 

22 ‘‘(aa) a physician that satis23 fies the criteria specified in sub24 clause (I) or (II); or 
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1 ‘‘(bb) a nurse practitioner or 

2 a physician assistant (as such 

3 terms are defined in section 

4 1861(aa)(5)(A)) who is working 

5 in accordance with State law, or 

6 a certified nurse-midwife (as de7 fined in section 1861(gg)) who is 

8 working in accordance with State 

9 law; 

10 ‘‘(IV) by a rural health clinic, 

11 Federally-qualified health center, or 

12 other health clinic that receives reim13 bursement on a fee schedule applica14 ble to a physician, a nurse practi15 tioner or a physician assistant (as 

16 such terms are defined in section 

17 1861(aa)(5)(A)) who is working in ac18 cordance with State law, or a certified 

19 nurse-midwife (as defined in section 

20 1861(gg)) who is working in accord21 ance with State law, for services fur22 nished by a physician, nurse practi23 tioner, physician assistant, or certified 

24 nurse-midwife, or services furnished 

25 by an advanced practice clinician su-
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1 pervised by a physician described in 

2 subclause (I)(aa) or (II)(aa), another 

3 advanced practice clinician, or a cer4 tified nurse-midwife; or 

5 ‘‘(V) by a nurse practitioner or a 

6 physician assistant (as such terms are 

7 defined in section 1861(aa)(5)(A)) 

8 who is working in accordance with 

9 State law, or a certified nurse-midwife 

10 (as defined in section 1861(gg)) who 

11 is working in accordance with State 

12 law, in accordance with procedures 

13 that ensure that the portion of the 

14 payment for such services that the 

15 nurse practitioner, physician assist16 ant, or certified nurse-midwife is paid 

17 is not less than the amount that the 

18 nurse practitioner, physician assist19 ant, or certified nurse-midwife would 

20 be paid if the services were provided 

21 under part B of title XVIII;’’. 

22 (2) CONFORMING AMENDMENTS.—Section 

23 1905(dd) of the Social Security Act (42 U.S.C. 

24 1396d(dd)) is amended— 
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1 (A) by striking ‘‘Notwithstanding’’ and in2 serting the following: 

3 ‘‘(1) IN GENERAL.—Notwithstanding’’; 

4 (B) by inserting ‘‘or furnished during the 

5 additional period specified in paragraph (2),’’ 

6 after ‘‘2015,’’; and 

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

8 ‘‘(2) ADDITIONAL PERIOD.—For purposes of 

9 paragraph (1), the additional period specified in this 

10 paragraph is the period that begins on the first day 

11 of the first month that begins one year after the 

12 date of enactment of the Patient Protection and Af13 fordable Care Enhancement Act.’’. 

14 (b) IMPROVED TARGETING OF PRIMARY CARE.—Sec15 tion 1902(jj) of the Social Security Act (42 U.S.C. 

16 1396a(jj)) is amended— 

17 (1) by redesignating paragraphs (1) and (2) as 

18 subparagraphs (A) and (B), respectively and realign19 ing the left margins accordingly; 

20 (2) by striking ‘‘For purposes of’’ and inserting 

21 the following: 

22 ‘‘(1) IN GENERAL.—For purposes of’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(2) EXCLUSIONS.—Such term does not include 

25 any services described in subparagraph (A) or (B) of 
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1 paragraph (1) if such services are provided in an 

2 emergency department of a hospital.’’. 

3 (c) ENSURING PAYMENT BY MANAGED CARE ENTI4 TIES.— 

5 (1) IN GENERAL.—Section 1903(m)(2)(A) of 

6 the Social Security Act (42 U.S.C. 1396b(m)(2)(A)) 

7 is amended— 

8 (A) in clause (xii), by striking ‘‘and’’ after 

9 the semicolon; 

10 (B) by realigning the left margin of clause 

11 (xiii) so as to align with the left margin of 

12 clause (xii) and by striking the period at the 

13 end of clause (xiii) and inserting ‘‘; and’’; and 

14 (C) by inserting after clause (xiii) the fol15 lowing: 

16 ‘‘(xiv) such contract provides that (I) payments 

17 to providers specified in section 1902(a)(13)(C) for 

18 primary care services defined in section 1902(jj) 

19 that are furnished during a year or period specified 

20 in section 1902(a)(13)(C) and section 1905(dd) are 

21 at least equal to the amounts set forth and required 

22 by the Secretary by regulation, (II) the entity shall, 

23 upon request, provide documentation to the State, 

24 sufficient to enable the State and the Secretary to 

25 ensure compliance with subclause (I), and (III) the 
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1 Secretary shall approve payments described in sub2 clause (I) that are furnished through an agreed 

3 upon capitation, partial capitation, or other value4 based payment arrangement if the capitation, partial 

5 capitation, or other value-based payment arrange6 ment is based on a reasonable methodology and the 

7 entity provides documentation to the State sufficient 

8 to enable the State and the Secretary to ensure com9 pliance with subclause (I).’’. 

10 (2) CONFORMING AMENDMENT.—Section 

11 1932(f) of the Social Security Act (42 U.S.C. 

12 1396u–2(f)) is amended by inserting ‘‘and clause 

13 (xiv) of section 1903(m)(2)(A)’’ before the period. 

14 SEC. 207. PERMANENT FUNDING FOR CHIP. 

15 (a) IN GENERAL.—Section 2104(a) of the Social Se16 curity Act (42 U.S.C. 1397dd(a)) is amended— 

17 (1) in paragraph (26), by inserting at the end 

18 ‘‘and’’; 

19 (2) by amending paragraph (27) to read as fol20 lows: 

21 ‘‘(27) for each fiscal year beginning with fiscal 

22 year 2024, such sums as are necessary to fund allot23 ments to States under subsections (c) and (m).’’; 

24 and 

25 (3) by striking paragraph (28). 
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1 (b) IN GENERAL.—Section 2104(a)(28) of the Social 

2 Security Act (42 U.S.C. 1397dd(a)(28)) is amended to 

3 read as follows: 

4 ‘‘(28) for fiscal year 2027 and each subsequent 

5 year, such sums as are necessary to fund allotments 

6 to States under subsections (c) and (m).’’. 

7 (c) ALLOTMENTS.— 

8 (1) IN GENERAL.—Section 2104(m) of the So9 cial Security Act (42 U.S.C. 1397dd(m)) is amend10 ed— 

11 (A) in paragraph (2)(B)(i), by striking ‘‘,, 

12 2023, and 2027’’ and inserting ‘‘and 2023’’; 

13 (B) in paragraph (7)— 

14 (i) in subparagraph (A), by striking 

15 ‘‘and ending with fiscal year 2027,’’; and 

16 (ii) in the flush left matter at the end, 

17 by striking ‘‘or fiscal year 2026’’ and in18 serting ‘‘fiscal year 2026, or a subsequent 

19 even-numbered fiscal year’’; 

20 (C) in paragraph (9)— 

21 (i) by striking ‘‘(10), or (11)’’ and in22 serting ‘‘or (10)’’; and 

23 (ii) by striking ‘‘2023, or 2027,’’ and 

24 inserting ‘‘or 2023’’; and 

25 (D) by striking paragraph (11). 
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1 (2) CONFORMING AMENDMENT.—Section 

2 50101(b)(2) of the Bipartisan Budget Act of 2018 

3 (Public Law 115–123) is repealed. 

4 SEC. 208. PERMANENT EXTENSION OF CHIP ENROLLMENT 

5 AND QUALITY MEASURES. 

6 (a) PEDIATRIC QUALITY MEASURES PROGRAM.— 

7 Section 1139A(i)(1) of the Social Security Act (42 U.S.C. 

8 1320b–9a(i)(1)) is amended— 

9 (1) in subparagraph (C), by striking at the end 

10 ‘‘and’’; 

11 (2) in subparagraph (D), by striking the period 

12 at the end and insert a semicolon; and 

13 (3) by adding at the end the following new sub14 paragraphs: 

15 ‘‘(E) for fiscal year 2028, $15,000,000 for 

16 the purpose of carrying out this section (other 

17 than subsections (e), (f), and (g)); and 

18 ‘‘(F) for a subsequent fiscal year, the 

19 amount appropriated under this paragraph for 

20 the previous fiscal year, increased by the per21 centage increase in the consumer price index for 

22 all urban consumers (all items; United States 

23 city average) over such previous fiscal year, for 

24 the purpose of carrying out this section (other 

25 than subsections (e), (f), and (g)).’’. 
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1 (b) EXPRESS LANE ELIGIBILITY OPTION.—Section 

2 1902(e)(13) of the Social Security Act (42 U.S.C. 

3 1396a(e)(13)) is amended by striking subparagraph (I). 

4 (c) ASSURANCE OF AFFORDABILITY STANDARD FOR

5 CHILDREN AND FAMILIES.— 

6 (1) IN GENERAL.—Section 2105(d)(3) of the 

7 Social Security Act (42 U.S.C. 1397ee(d)(3)) is 

8 amended— 

9 (A) in the paragraph heading, by striking 

10 ‘‘THROUGH SEPTEMBER 30, 2027’’; and 

11 (B) in subparagraph (A), in the matter 

12 preceding clause (i)— 

13 (i) by striking ‘‘During the period 

14 that begins on the date of enactment of 

15 the Patient Protection and Affordable Care 

16 Act and ends on September 30, 2027’’ and 

17 inserting ‘‘Beginning on the date of the en18 actment of the Patient Protection and Af19 fordable Care Act’’; 

20 (ii) by striking ‘‘During the period 

21 that begins on October 1, 2019, and ends 

22 on September 30, 2027’’ and inserting 

23 ‘‘Beginning on October 1, 2019’’; and 

24 (iii) by striking ‘‘The preceding sen25 tences shall not be construed as preventing 
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1 a State during any such periods from’’ and 

2 inserting ‘‘The preceding sentences shall 

3 not be construed as preventing a State 

4 from’’. 

5 (2) CONFORMING AMENDMENTS.—Section 

6 1902(gg)(2) of the Social Security Act (42 U.S.C. 

7 1396a(gg)(2)) is amended— 

8 (A) in the paragraph heading, by striking 

9 ‘‘THROUGH SEPTEMBER 30, 2027’’; and 

10 (B) by striking ‘‘through September 30’’ 

11 and all that follows through ‘‘ends on Sep12 tember 30, 2027’’ and inserting ‘‘(but begin13 ning on October 1, 2019,’’. 

14 (d) QUALIFYING STATES OPTION.—Section 

15 2105(g)(4) of the Social Security Act (42 U.S.C. 

16 1397ee(g)(4)) is amended— 

17 (1) in the paragraph heading, by striking ‘‘FOR

18 FISCAL YEARS 2009 THROUGH 2027’’ and inserting 

19 ‘‘AFTER FISCAL YEAR 2008’’; and 

20 (2) in subparagraph (A), by striking ‘‘for any 

21 of fiscal years 2009 through 2027’’ and inserting 

22 ‘‘for any fiscal year after fiscal year 2008’’. 

23 (e) OUTREACH AND ENROLLMENT PROGRAM.—Sec24 tion 2113 of the Social Security Act (42 U.S.C. 1397mm) 

25 is amended— 
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1 (1) in subsection (a)— 

2 (A) in paragraph (1), by striking ‘‘during 

3 the period of fiscal years 2009 through 2027’’ 

4 and inserting ‘‘, beginning with fiscal year 

5 2009,’’; 

6 (B) in paragraph (2)— 

7 (i) by striking ‘‘10 percent of such 

8 amounts’’ and inserting ‘‘10 percent of 

9 such amounts for the period or the fiscal 

10 year for which such amounts are appro11 priated’’; and 

12 (ii) by striking ‘‘during such period’’ 

13 and inserting ‘‘, during such period or such 

14 fiscal year,’’; and 

15 (C) in paragraph (3), by striking ‘‘For the 

16 period of fiscal years 2024 through 2027, an 

17 amount equal to 10 percent of such amounts’’ 

18 and inserting ‘‘Beginning with fiscal year 2024, 

19 an amount equal to 10 percent of such amounts 

20 for the period or the fiscal year for which such 

21 amounts are appropriated’’; and 

22 (2) in subsection (g)— 

23 (A) by striking ‘‘2017,,’’ and inserting 

24 ‘‘2017,’’; 
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1 (B) by striking ‘‘and $48,000,000’’ and in2 serting ‘‘$48,000,000’’; and 

3 (C) by inserting after ‘‘through 2027’’ the 

4 following: ‘‘, $12,000,000 for fiscal year 2028, 

5 and, for each fiscal year after fiscal year 2028, 

6 the amount appropriated under this subsection 

7 for the previous fiscal year, increased by the 

8 percentage increase in the consumer price index 

9 for all urban consumers (all items; United 

10 States city average) over such previous fiscal 

11 year’’. 

12 (f) CHILD ENROLLMENT CONTINGENCY FUND.— 

13 Section 2104(n) of the Social Security Act (42 U.S.C. 

14 1397dd(n)) is amended— 

15 (1) in paragraph (2)— 

16 (A) in subparagraph (A)(ii)— 

17 (i) by striking ‘‘and 2024 through 

18 2026’’ and inserting ‘‘beginning with fiscal 

19 year 2024’’; and 

20 (ii) by striking ‘‘2023, and 2027’’ and 

21 inserting ‘‘, and 2023’’; and 

22 (B) in subparagraph (B)— 

23 (i) by striking ‘‘2024 through 2026’’ 

24 and inserting ‘‘beginning with fiscal year 

25 2024’’; and 
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1 (ii) by striking ‘‘2023, and 2027’’ and 

2 inserting ‘‘, and 2023’’; and 

3 (2) in paragraph (3)(A)— 

4 (A) by striking ‘‘fiscal years 2024 through 

5 2026’’ and inserting ‘‘beginning with fiscal year 

6 2024’’; and 

7 (B) by striking ‘‘2023, or 2027’’ and in8 serting ‘‘, or 2023’’. 

9 SEC. 209. STATE OPTION TO INCREASE CHILDREN’S ELIGI10 BILITY FOR MEDICAID AND CHIP. 

11 Section 2110(b)(1)(B)(ii) of the Social Security Act 

12 (42 U.S.C. 1397jj(b)(1)(B)(ii)) is amended— 

13 (1) in subclause (II), by striking ‘‘or’’ at the 

14 end; 

15 (2) in subclause (III), by striking ‘‘and’’ at the 

16 end and inserting ‘‘or’’; and 

17 (3) by inserting after subclause (III) the fol18 lowing new subclause: 

19 ‘‘(IV) at the option of the State, 

20 whose family income exceeds the max21 imum income level otherwise estab22 lished for children under the State 

23 child health plan as of the date of the 

24 enactment of this subclause; and’’. 
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1 SEC. 210. MEDICAID COVERAGE FOR CITIZENS OF FREELY 

2 ASSOCIATED STATES. 

3 (a) IN GENERAL.—Section 402(b)(2) of the Personal 

4 Responsibility and Work Opportunity Reconciliation Act 

5 of 1996 (8 U.S.C. 1612(b)(2)) is amended by adding at 

6 the end the following new subparagraph: 

7 ‘‘(G) MEDICAID EXCEPTION FOR CITIZENS

8 OF FREELY ASSOCIATED STATES.—With respect 

9 to eligibility for benefits for the designated Fed10 eral program defined in paragraph (3)(C) (re11 lating to the Medicaid program), section 401(a) 

12 and paragraph (1) shall not apply to any indi13 vidual who lawfully resides in 1 of the 50 States 

14 or the District of Columbia in accordance with 

15 the Compacts of Free Association between the 

16 Government of the United States and the Gov17 ernments of the Federated States of Micro18 nesia, the Republic of the Marshall Islands, and 

19 the Republic of Palau and shall not apply, at 

20 the option of the Governor of Puerto Rico, the 

21 Virgin Islands, Guam, the Northern Mariana 

22 Islands, or American Samoa as communicated 

23 to the Secretary of Health and Human Services 

24 in writing, to any individual who lawfully re25 sides in the respective territory in accordance 

26 with such Compacts.’’. 
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1 (b) EXCEPTION TO 5–YEAR LIMITED ELIGIBILITY.— 

2 Section 403(d) of such Act (8 U.S.C. 1613(d)) is amend3 ed— 

4 (1) in paragraph (1), by striking ‘‘or’’ at the 

5 end; 

6 (2) in paragraph (2), by striking the period at 

7 the end and inserting ‘‘; or’’; and 

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

9 paragraph: 

10 ‘‘(3) an individual described in section 

11 402(b)(2)(G), but only with respect to the des12 ignated Federal program defined in section 

13 402(b)(3)(C).’’. 

14 (c) DEFINITION OF QUALIFIED ALIEN.—Section 

15 431(b) of such Act (8 U.S.C. 1641(b)) is amended— 

16 (1) in paragraph (6), by striking ‘‘; or’’ at the 

17 end and inserting a comma; 

18 (2) in paragraph (7), by striking the period at 

19 the end and inserting ‘‘, or’’; and 

20 (3) by adding at the end the following new 

21 paragraph: 

22 ‘‘(8) an individual who lawfully resides in the 

23 United States in accordance with a Compact of Free 

24 Association referred to in section 402(b)(2)(G), but 

25 only with respect to the designated Federal program 
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1 defined in section 402(b)(3)(C) (relating to the Med2 icaid program).’’. 

3 (d) APPLICATION TO STATE PLANS.—Section 

4 1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 

5 1396a(a)(10)(A)(i)) is amended by inserting after sub6 clause (IX) the following: 

7 ‘‘(X) who are described in section 

8 402(b)(2)(G) of the Personal Respon9 sibility and Work Opportunity Rec10 onciliation Act of 1996 and eligible 

11 for benefits under this title by reason 

12 of application of such section;’’. 

13 (e) CONFORMING AMENDMENTS.—Section 1108 of 

14 the Social Security Act (42 U.S.C. 1308) is amended— 

15 (1) in subsection (f), in the matter preceding 

16 paragraph (1), by striking ‘‘subsections (g) and (h) 

17 and section 1935(e)(1)(B)’’ and inserting ‘‘sub18 sections (g), (h), and (i) and section 1935(e)(1)(B)’’; 

19 and 

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

21 ‘‘(i) EXCLUSION OF MEDICAL ASSISTANCE EXPENDI22 TURES FOR CITIZENS OF FREELY ASSOCIATED STATES.— 

23 Expenditures for medical assistance provided to an indi24 vidual described in section 431(b)(8) of the Personal Re25 sponsibility and Work Opportunity Reconciliation Act of 
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1 1996 (8 U.S.C. 1641(b)(8)) shall not be taken into ac2 count for purposes of applying payment limits under sub3 sections (f) and (g).’’. 

4 (f) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to benefits for items and services 

6 furnished on or after the date of the enactment of this 

7 Act. 

8 SEC. 211. EXTENSION OF FULL FEDERAL MEDICAL ASSIST9 ANCE PERCENTAGE TO INDIAN HEALTH 

10 CARE PROVIDERS. 

11 (a) IN GENERAL.—Section 1905 of the Social Secu12 rity Act (42 U.S.C. 1396d) is amended— 

13 (1) in subsection (a), by amending paragraph 

14 (9) to read as follows: 

15 ‘‘(9) clinic services furnished by or under the 

16 direction of a physician, without regard to whether 

17 the clinic itself is administered by a physician, in18 cluding— 

19 ‘‘(A) such services furnished outside the 

20 clinic by clinic personnel to an eligible indi21 vidual who does not reside in a permanent 

22 dwelling or does not have a fixed home or mail23 ing address; and 

24 ‘‘(B) such services provided outside the 

25 clinic on the basis of a referral from a clinic ad-
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1 ministered by an Indian Health Program (as 

2 defined in paragraph (12) of section 4 of the 

3 Indian Health Care Improvement Act, or an 

4 Urban Indian Organization as defined in para5 graph (29) of section 4 of such Act that has a 

6 grant or contract with the Indian Health Serv7 ice under title V of such Act;’’. 

8 (2) in subsection (b), by inserting after ‘‘(as de9 fined in section 4 of the Indian Health Care Im10 provement Act)’’ the following: ‘‘; the Federal med11 ical assistance percentage shall also be 100 per cen12 tum with respect to amounts expended as medical 

13 assistance for services which are received through an 

14 Urban Indian organization (as defined in section 4 

15 of the Indian Health Care Improvement Act) that 

16 has a grant or contract with the Indian Health Serv17 ice under title V of such Act’’. 

18 (b) EXTENSION OF FULL FEDERAL MEDICAL AS19 SISTANCE PERCENTAGE TO SERVICES FURNISHED BY NA20 TIVE HAWAIIAN HEALTH CARE SYSTEMS.— 

21 (1) IN GENERAL.—Beginning on the date of en22 actment of this Act— 

23 (A) for purposes of section 1905(a)(9) of 

24 the Social Security Act (42 U.S.C. 

25 1396d(a)(9)), services described in subsection 
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1 (b) that are furnished in any location shall be 

2 deemed to be clinic services; and 

3 (B) notwithstanding section 1905(b) of the 

4 Social Security Act (42 U.S.C. 1396d(b)), the 

5 Federal medical assistance percentage with re6 spect to amounts expended as medical assist7 ance for such services shall be 100 percent. 

8 (2) SERVICES DESCRIBED.—The services de9 scribed in this subsection are services for which pay10 ment is available under the State plan under title 

11 XIX of the Social Security Act (42 U.S.C. 1396 et 

12 seq.) of Hawaii (or any waiver of such plan) that— 

13 (A) are furnished on or after the date of 

14 enactment of this Act; 

15 (B) are furnished to an individual who— 

16 (i) is a Native Hawaiian; and 

17 (ii) is eligible for medical assistance 

18 under such plan; and 

19 (C) are furnished by an Indian health care 

20 provider (as such term is defined in section 

21 1932(h)(4)(A) of the Social Security Act (42 

22 U.S.C. 1396u–2(h)(4)(A)) or a Native Hawai23 ian health care system (without regard to 

24 whether such services are furnished through an 

25 Indian Health Service facility). 
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1 TITLE III—LOWERING PRICES 

2 THROUGH FAIR DRUG PRICE 

3 NEGOTIATION 

4 SEC. 301. ESTABLISHING A FAIR DRUG PRICING PROGRAM. 

5 (a) PROGRAM TO LOWER PRICES FOR CERTAIN

6 HIGH-PRICED SINGLE SOURCE DRUGS.—Title XI of the 

7 Social Security Act (42 U.S.C. 1301 et seq.) is amended 

8 by adding at the end the following new part: 

9 ‘‘PART E—FAIR PRICE NEGOTIATION PROGRAM 

10 TO LOWER PRICES FOR CERTAIN HIGH11 PRICED SINGLE SOURCE DRUGS 

12 ‘‘SEC. 1191. ESTABLISHMENT OF PROGRAM. 

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

14 Fair Price Negotiation Program (in this part referred to 

15 as the ‘program’). Under the program, with respect to 

16 each price applicability period, the Secretary shall— 

17 ‘‘(1) publish a list of selected drugs in accord18 ance with section 1192; 

19 ‘‘(2) enter into agreements with manufacturers 

20 of selected drugs with respect to such period, in ac21 cordance with section 1193; 

22 ‘‘(3) negotiate and, if applicable, renegotiate 

23 maximum fair prices for such selected drugs, in ac24 cordance with section 1194; and 
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1 ‘‘(4) carry out the administrative duties de2 scribed in section 1196. 

3 ‘‘(b) DEFINITIONS RELATING TO TIMING.—For pur4 poses of this part: 

5 ‘‘(1) INITIAL PRICE APPLICABILITY YEAR.—The 

6 term ‘initial price applicability year’ means a plan 

7 year (beginning with plan year 2023) or, if agreed 

8 to in an agreement under section 1193 by the Sec9 retary and manufacturer involved, a period of more 

10 than one plan year (beginning on or after January 

11 1, 2023). 

12 ‘‘(2) PRICE APPLICABILITY PERIOD.—The term 

13 ‘price applicability period’ means, with respect to a 

14 drug, the period beginning with the initial price ap15 plicability year with respect to which such drug is a 

16 selected drug and ending with the last plan year 

17 during which the drug is a selected drug. 

18 ‘‘(3) SELECTED DRUG PUBLICATION DATE.— 

19 The term ‘selected drug publication date’ means, 

20 with respect to each initial price applicability year, 

21 April 15 of the plan year that begins 2 years prior 

22 to such year. 

23 ‘‘(4) VOLUNTARY NEGOTIATION PERIOD.—The 

24 term ‘voluntary negotiation period’ means, with re-
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1 spect to an initial price applicability year with re2 spect to a selected drug, the period— 

3 ‘‘(A) beginning on the sooner of— 

4 ‘‘(i) the date on which the manufac5 turer of the drug and the Secretary enter 

6 into an agreement under section 1193 with 

7 respect to such drug; or 

8 ‘‘(ii) June 15 following the selected 

9 drug publication date with respect to such 

10 selected drug; and 

11 ‘‘(B) ending on March 31 of the year that 

12 begins one year prior to the initial price appli13 cability year. 

14 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 

15 part: 

16 ‘‘(1) FAIR PRICE ELIGIBLE INDIVIDUAL.—The 

17 term ‘fair price eligible individual’ means, with re18 spect to a selected drug— 

19 ‘‘(A) in the case such drug is furnished or 

20 dispensed to the individual at a pharmacy or by 

21 a mail order service— 

22 ‘‘(i) an individual who is enrolled 

23 under a prescription drug plan under part 

24 D of title XVIII or an MA–PD plan under 

25 part C of such title if coverage is provided 
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1 under such plan for such selected drug; 

2 and 

3 ‘‘(ii) an individual who is enrolled 

4 under a group health plan or health insur5 ance coverage offered in the group or indi6 vidual market (as such terms are defined 

7 in section 2791 of the Public Health Serv8 ice Act) with respect to which there is in 

9 effect an agreement with the Secretary 

10 under section 1197 with respect to such se11 lected drug as so furnished or dispensed; 

12 and 

13 ‘‘(B) in the case such drug is furnished or 

14 administered to the individual by a hospital, 

15 physician, or other provider of services or sup16 plier— 

17 ‘‘(i) an individual who is entitled to 

18 benefits under part A of title XVIII or en19 rolled under part B of such title if such se20 lected drug is covered under the respective 

21 part; and 

22 ‘‘(ii) an individual who is enrolled 

23 under a group health plan or health insur24 ance coverage offered in the group or indi25 vidual market (as such terms are defined 
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1 in section 2791 of the Public Health Serv2 ice Act) with respect to which there is in 

3 effect an agreement with the Secretary 

4 under section 1197 with respect to such se5 lected drug as so furnished or adminis6 tered. 

7 ‘‘(2) MAXIMUM FAIR PRICE.—The term ‘max8 imum fair price’ means, with respect to a plan year 

9 during a price applicability period and with respect 

10 to a selected drug (as defined in section 1192(c)) 

11 with respect to such period, the price published pur12 suant to section 1195 in the Federal Register for 

13 such drug and year. 

14 ‘‘(3) AVERAGE INTERNATIONAL MARKET PRICE

15 DEFINED.— 

16 ‘‘(A) IN GENERAL.—The terms ‘average 

17 international market price’ and ‘AIM price’ 

18 mean, with respect to a drug, the average price 

19 (which shall be the net average price, if prac20 ticable, and volume-weighted, if practicable) for 

21 a unit (as defined in paragraph (4)) of the drug 

22 for sales of such drug (calculated across dif23 ferent dosage forms and strengths of the drug 

24 and not based on the specific formulation or 

25 package size or package type), as computed (as 
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1 of the date of publication of such drug as a se2 lected drug under section 1192(a)) in all coun3 tries described in clause (ii) of subparagraph 

4 (B) that are applicable countries (as described 

5 in clause (i) of such subparagraph) with respect 

6 to such drug. 

7 ‘‘(B) APPLICABLE COUNTRIES.— 

8 ‘‘(i) IN GENERAL.—For purposes of 

9 subparagraph (A), a country described in 

10 clause (ii) is an applicable country de11 scribed in this clause with respect to a 

12 drug if there is available an average price 

13 for any unit for the drug for sales of such 

14 drug in such country. 

15 ‘‘(ii) COUNTRIES DESCRIBED.—For 

16 purposes of this paragraph, the following 

17 are countries described in this clause: 

18 ‘‘(I) Australia. 

19 ‘‘(II) Canada. 

20 ‘‘(III) France. 

21 ‘‘(IV) Germany. 

22 ‘‘(V) Japan. 

23 ‘‘(VI) The United Kingdom. 

24 ‘‘(4) UNIT.—The term ‘unit’ means, with re25 spect to a drug, the lowest identifiable quantity 
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1 (such as a capsule or tablet, milligram of molecules, 

2 or grams) of the drug that is dispensed. 

3 ‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS 

4 AS SELECTED DRUGS. 

5 ‘‘(a) IN GENERAL.—Not later than the selected drug 

6 publication date with respect to an initial price applica7 bility year, subject to subsection (h), the Secretary shall 

8 select and publish in the Federal Register a list of— 

9 ‘‘(1)(A) with respect to an initial price applica10 bility year during 2023, at least 25 negotiation-eligi11 ble drugs described in subparagraphs (A) and (B), 

12 but not subparagraph (C), of subsection (d)(1) (or, 

13 with respect to an initial price applicability year dur14 ing such period beginning after 2023, the maximum 

15 number (if such number is less than 25) of such ne16 gotiation-eligible drugs for the year) with respect to 

17 such year; and 

18 ‘‘(B) with respect to an initial price applica19 bility year during 2024 or a subsequent year, at 

20 least 50 negotiation-eligible drugs described in sub21 paragraphs (A) and (B), but not subparagraph (C), 

22 of subsection (d)(1) (or, with respect to an initial 

23 price applicability year during such period, the max24 imum number (if such number is less than 50) of 
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1 such negotiation-eligible drugs for the year) with re2 spect to such year; 

3 ‘‘(2) all negotiation-eligible drugs described in 

4 subparagraph (C) of such subsection with respect to 

5 such year; and 

6 ‘‘(3) all new-entrant negotiation-eligible drugs 

7 (as defined in subsection (g)(1)) with respect to such 

8 year. 

9 Each drug published on the list pursuant to the previous 

10 sentence shall be subject to the negotiation process under 

11 section 1194 for the voluntary negotiation period with re12 spect to such initial price applicability year (and the re13 negotiation process under such section as applicable for 

14 any subsequent year during the applicable price applica15 bility period). In applying this subsection, any negotiation16 eligible drug that is selected under this subsection for an 

17 initial price applicability year shall not count toward the 

18 required minimum amount of drugs to be selected under 

19 paragraph (1) for any subsequent year, including such a 

20 drug so selected that is subject to renegotiation under sec21 tion 1194. 

22 ‘‘(b) SELECTION OF DRUGS.—In carrying out sub23 section (a)(1) the Secretary shall select for inclusion on 

24 the published list described in subsection (a) with respect 

25 to a price applicability period, the negotiation-eligible 
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1 drugs that the Secretary projects will result in the greatest 

2 savings to the Federal Government or fair price eligible 

3 individuals during the price applicability period. In making 

4 this projection of savings for drugs for which there is an 

5 AIM price for a price applicability period, the savings shall 

6 be projected across different dosage forms and strengths 

7 of the drugs and not based on the specific formulation or 

8 package size or package type of the drugs, taking into con9 sideration both the volume of drugs for which payment 

10 is made, to the extent such data is available, and the 

11 amount by which the net price for the drugs exceeds the 

12 AIM price for the drugs. 

13 ‘‘(c) SELECTED DRUG.—For purposes of this part, 

14 each drug included on the list published under subsection 

15 (a) with respect to an initial price applicability year shall 

16 be referred to as a ‘selected drug’ with respect to such 

17 year and each subsequent plan year beginning before the 

18 first plan year beginning after the date on which the Sec19 retary determines two or more drug products— 

20 ‘‘(1) are approved or licensed (as applicable)— 

21 ‘‘(A) under section 505(j) of the Federal 

22 Food, Drug, and Cosmetic Act using such drug 

23 as the listed drug; or 
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1 ‘‘(B) under section 351(k) of the Public 

2 Health Service Act using such drug as the ref3 erence product; and 

4 ‘‘(2) continue to be marketed. 

5 ‘‘(d) NEGOTIATION-ELIGIBLE DRUG.— 

6 ‘‘(1) IN GENERAL.—For purposes of this part, 

7 the term ‘negotiation-eligible drug’ means, with re8 spect to the selected drug publication date with re9 spect to an initial price applicability year, a quali10 fying single source drug, as defined in subsection 

11 (e), that meets any of the following criteria: 

12 ‘‘(A) COVERED PART D DRUGS.—The drug 

13 is among the 125 covered part D drugs (as de14 fined in section 1860D–2(e)) for which there 

15 was an estimated greatest net spending under 

16 parts C and D of title XVIII, as determined by 

17 the Secretary, during the most recent plan year 

18 prior to such drug publication date for which 

19 data are available. 

20 ‘‘(B) OTHER DRUGS.—The drug is among 

21 the 125 drugs for which there was an estimated 

22 greatest net spending in the United States (in23 cluding the 50 States, the District of Columbia, 

24 and the territories of the United States), as de25 termined by the Secretary, during the most re-
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1 cent plan year prior to such drug publication 

2 date for which data are available. 

3 ‘‘(C) INSULIN.—The drug is a qualifying 

4 single source drug described in subsection 

5 (e)(3). 

6 ‘‘(2) CLARIFICATION.—In determining whether 

7 a qualifying single source drug satisfies any of the 

8 criteria described in paragraph (1), the Secretary 

9 shall, to the extent practicable, use data that is ag10 gregated across dosage forms and strengths of the 

11 drug and not based on the specific formulation or 

12 package size or package type of the drug. 

13 ‘‘(3) PUBLICATION.—Not later than the se14 lected drug publication date with respect to an ini15 tial price applicability year, the Secretary shall pub16 lish in the Federal Register a list of negotiation-eli17 gible drugs with respect to such selected drug publi18 cation date. 

19 ‘‘(e) QUALIFYING SINGLE SOURCE DRUG.—For pur20 poses of this part, the term ‘qualifying single source drug’ 

21 means any of the following: 

22 ‘‘(1) DRUG PRODUCTS.—A drug that— 

23 ‘‘(A) is approved under section 505(c) of 

24 the Federal Food, Drug, and Cosmetic Act and 
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1 continues to be marketed pursuant to such ap2 proval; and 

3 ‘‘(B) is not the listed drug for any drug 

4 that is approved and continues to be marketed 

5 under section 505(j) of such Act. 

6 ‘‘(2) BIOLOGICAL PRODUCTS.—A biological 

7 product that— 

8 ‘‘(A) is licensed under section 351(a) of 

9 the Public Health Service Act, including any 

10 product that has been deemed to be licensed 

11 under section 351 of such Act pursuant to sec12 tion 7002(e)(4) of the Biologics Price Competi13 tion and Innovation Act of 2009, and continues 

14 to be marketed under section 351 of such Act; 

15 and 

16 ‘‘(B) is not the reference product for any 

17 biological product that is licensed and continues 

18 to be marketed under section 351(k) of such 

19 Act. 

20 ‘‘(3) INSULIN PRODUCT.—Notwithstanding 

21 paragraphs (1) and (2), any insulin product that is 

22 approved under subsection (c) or (j) of section 505 

23 of the Federal Food, Drug, and Cosmetic Act or li24 censed under subsection (a) or (k) of section 351 of 

25 the Public Health Service Act and continues to be 
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1 marketed under such section 505 or 351, including 

2 any insulin product that has been deemed to be li3 censed under section 351(a) of the Public Health 

4 Service Act pursuant to section 7002(e)(4) of the 

5 Biologics Price Competition and Innovation Act of 

6 2009 and continues to be marketed pursuant to such 

7 licensure. 

8 For purposes of applying paragraphs (1) and (2), a drug 

9 or biological product that is marketed by the same sponsor 

10 or manufacturer (or an affiliate thereof or a cross-licensed 

11 producer or distributor) as the listed drug or reference 

12 product described in such respective paragraph shall not 

13 be taken into consideration. 

14 ‘‘(f) INFORMATION ON INTERNATIONAL DRUG

15 PRICES.—For purposes of determining which negotiation16 eligible drugs to select under subsection (a) and, in the 

17 case of such drugs that are selected drugs, to determine 

18 the maximum fair price for such a drug and whether such 

19 maximum fair price should be renegotiated under section 

20 1194, the Secretary shall use data relating to the AIM 

21 price with respect to such drug as available or provided 

22 to the Secretary and shall on an ongoing basis request 

23 from manufacturers of selected drugs information on the 

24 AIM price of such a drug. 
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1 ‘‘(g) NEW-ENTRANT NEGOTIATION-ELIGIBLE

2 DRUGS.— 

3 ‘‘(1) IN GENERAL.—For purposes of this part, 

4 the term ‘new-entrant negotiation-eligible drug’ 

5 means, with respect to the selected drug publication 

6 date with respect to an initial price applicability 

7 year, a qualifying single source drug— 

8 ‘‘(A) that is first approved or licensed, as 

9 described in paragraph (1), (2), or (3) of sub10 section (e), as applicable, during the year pre11 ceding such selected drug publication date; and 

12 ‘‘(B) that the Secretary determines under 

13 paragraph (2) is likely to be included as a nego14 tiation-eligible drug with respect to the subse15 quent selected drug publication date. 

16 ‘‘(2) DETERMINATION.—In the case of a quali17 fying single source drug that meets the criteria de18 scribed in subparagraph (A) of paragraph (1), with 

19 respect to an initial price applicability year, if the 

20 wholesale acquisition cost at which such drug is first 

21 marketed in the United States is equal to or greater 

22 than the median household income (as determined 

23 according to the most recent data collected by the 

24 United States Census Bureau), the Secretary shall 

25 determine before the selected drug publication date 
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1 with respect to the initial price applicability year, if 

2 the drug is likely to be included as a negotiation-eli3 gible drug with respect to the subsequent selected 

4 drug publication date, based on the projected spend5 ing under title XVIII or in the United States on 

6 such drug. For purposes of this paragraph the term 

7 ‘United States’ includes the 50 States, the District 

8 of Columbia, and the territories of the United 

9 States. 

10 ‘‘(h) CONFLICT OF INTEREST.— 

11 ‘‘(1) IN GENERAL.—In the case the Inspector 

12 General of the Department of Health and Human 

13 Services determines the Secretary has a conflict, 

14 with respect to a matter described in paragraph (2), 

15 the individual described in paragraph (3) shall carry 

16 out the duties of the Secretary under this part, with 

17 respect to a negotiation-eligible drug, that would 

18 otherwise be such a conflict. 

19 ‘‘(2) MATTER DESCRIBED.—A matter described 

20 in this paragraph is— 

21 ‘‘(A) a financial interest (as described in 

22 section 2635.402 of title 5, Code of Federal 

23 Regulations (except for an interest described in 

24 subsection (b)(2)(iv) of such section)) on the 

25 date of the selected drug publication date, with 
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1 respect the price applicability year (as applica2 ble); 

3 ‘‘(B) a personal or business relationship 

4 (as described in section 2635.502 of such title) 

5 on the date of the selected drug publication 

6 date, with respect the price applicability year; 

7 ‘‘(C) employment by a manufacturer of a 

8 negotiation-eligible drug during the preceding 

9 10-year period beginning on the date of the se10 lected drug publication date, with respect to 

11 each price applicability year; and 

12 ‘‘(D) any other matter the General Counsel 

13 determines appropriate. 

14 ‘‘(3) INDIVIDUAL DESCRIBED.—An individual 

15 described in this paragraph is— 

16 ‘‘(A) the highest-ranking officer or em17 ployee of the Department of Health and 

18 Human Services (as determined by the organi19 zational chart of the Department) that does not 

20 have a conflict under this subsection; and 

21 ‘‘(B) is nominated by the President and 

22 confirmed by the Senate with respect to the po23 sition. 
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1 ‘‘SEC. 1193. MANUFACTURER AGREEMENTS. 

2 ‘‘(a) IN GENERAL.—For purposes of section 

3 1191(a)(2), the Secretary shall enter into agreements with 

4 manufacturers of selected drugs with respect to a price 

5 applicability period, by not later than June 15 following 

6 the selected drug publication date with respect to such se7 lected drug, under which— 

8 ‘‘(1) during the voluntary negotiation period for 

9 the initial price applicability year for the selected 

10 drug, the Secretary and manufacturer, in accordance 

11 with section 1194, negotiate to determine (and, by 

12 not later than the last date of such period and in ac13 cordance with subsection (c), agree to) a maximum 

14 fair price for such selected drug of the manufacturer 

15 in order to provide access to such price— 

16 ‘‘(A) to fair price eligible individuals who 

17 with respect to such drug are described in sub18 paragraph (A) of section 1191(c)(1) and are 

19 furnished or dispensed such drug during, sub20 ject to subparagraph (2), the price applicability 

21 period; and 

22 ‘‘(B) to hospitals, physicians, and other 

23 providers of services and suppliers with respect 

24 to fair price eligible individuals who with re25 spect to such drug are described in subpara26 graph (B) of such section and are furnished or 
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1 administered such drug during, subject to sub2 paragraph (2), the price applicability period; 

3 ‘‘(2) the Secretary and the manufacturer shall, 

4 in accordance with a process and during a period 

5 specified by the Secretary pursuant to rulemaking, 

6 renegotiate (and, by not later than the last date of 

7 such period and in accordance with subsection (c), 

8 agree to) the maximum fair price for such drug if 

9 the Secretary determines that there is a material 

10 change in any of the factors described in section 

11 1194(d) relating to the drug, including changes in 

12 the AIM price for such drug, in order to provide ac13 cess to such maximum fair price (as so renegoti14 ated)— 

15 ‘‘(A) to fair price eligible individuals who 

16 with respect to such drug are described in sub17 paragraph (A) of section 1191(c)(1) and are 

18 furnished or dispensed such drug during any 

19 year during the price applicability period (be20 ginning after such renegotiation) with respect 

21 to such selected drug; and 

22 ‘‘(B) to hospitals, physicians, and other 

23 providers of services and suppliers with respect 

24 to fair price eligible individuals who with re25 spect to such drug are described in subpara-
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1 graph (B) of such section and are furnished or 

2 administered such drug during any year de3 scribed in subparagraph (A); 

4 ‘‘(3) the maximum fair price (including as re5 negotiated pursuant to paragraph (2)), with respect 

6 to such a selected drug, shall be provided to fair 

7 price eligible individuals, who with respect to such 

8 drug are described in subparagraph (A) of section 

9 1191(c)(1), at the pharmacy or by a mail order serv10 ice at the point-of-sale of such drug; 

11 ‘‘(4) the manufacturer, subject to subsection 

12 (d), submits to the Secretary, in a form and manner 

13 specified by the Secretary— 

14 ‘‘(A) for the voluntary negotiation period 

15 for the price applicability period (and, if appli16 cable, before any period of renegotiation speci17 fied pursuant to paragraph (2)) with respect to 

18 such drug all information that the Secretary re19 quires to carry out the negotiation (or renegoti20 ation process) under this part, including infor21 mation described in section 1192(f) and section 

22 1194(d)(1); and 

23 ‘‘(B) on an ongoing basis, information on 

24 changes in prices for such drug that would af25 fect the AIM price for such drug or otherwise 
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1 provide a basis for renegotiation of the max2 imum fair price for such drug pursuant to 

3 paragraph (2); 

4 ‘‘(5) the manufacturer agrees that in the case 

5 the selected drug of a manufacturer is a drug de6 scribed in subsection (c), the manufacturer will, in 

7 accordance with such subsection, make any payment 

8 required under such subsection with respect to such 

9 drug; and 

10 ‘‘(6) the manufacturer complies with require11 ments imposed by the Secretary for purposes of ad12 ministering the program, including with respect to 

13 the duties described in section 1196. 

14 ‘‘(b) AGREEMENT IN EFFECT UNTIL DRUG IS NO

15 LONGER A SELECTED DRUG.—An agreement entered into 

16 under this section shall be effective, with respect to a drug, 

17 until such drug is no longer considered a selected drug 

18 under section 1192(c). 

19 ‘‘(c) SPECIAL RULE FOR CERTAIN SELECTED DRUGS

20 WITHOUT AIM PRICE.— 

21 ‘‘(1) IN GENERAL.—In the case of a selected 

22 drug for which there is no AIM price available with 

23 respect to the initial price applicability year for such 

24 drug and for which an AIM price becomes available 

25 beginning with respect to a subsequent plan year 
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1 during the price applicability period for such drug, 

2 if the Secretary determines that the amount de3 scribed in paragraph (2)(A) for a unit of such drug 

4 is greater than the amount described in paragraph 

5 (2)(B) for a unit of such drug, then by not later 

6 than one year after the date of such determination, 

7 the manufacturer of such selected drug shall pay to 

8 the Treasury an amount equal to the product of— 

9 ‘‘(A) the difference between such amount 

10 described in paragraph (2)(A) for a unit of 

11 such drug and such amount described in para12 graph (2)(B) for a unit of such drug; and 

13 ‘‘(B) the number of units of such drug sold 

14 in the United States, including the 50 States, 

15 the District of Columbia, and the territories of 

16 the United States, during the period described 

17 in paragraph (2)(B). 

18 ‘‘(2) AMOUNTS DESCRIBED.— 

19 ‘‘(A) WEIGHTED AVERAGE PRICE BEFORE

20 AIM PRICE AVAILABLE.—For purposes of para21 graph (1), the amount described in this sub22 paragraph for a selected drug described in such 

23 paragraph, is the amount equal to the weighted 

24 average manufacturer price (as defined in sec25 tion 1927(k)(1)) for such dosage strength and 
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1 form for the drug during the period beginning 

2 with the first plan year for which the drug is 

3 included on the list of negotiation-eligible drugs 

4 published under section 1192(d) and ending 

5 with the last plan year during the price applica6 bility period for such drug with respect to which 

7 there is no AIM price available for such drug. 

8 ‘‘(B) AMOUNT MULTIPLIER AFTER AIM

9 PRICE AVAILABLE.—For purposes of paragraph 

10 (1), the amount described in this subparagraph 

11 for a selected drug described in such paragraph, 

12 is the amount equal to 200 percent of the AIM 

13 price for such drug with respect to the first 

14 plan year during the price applicability period 

15 for such drug with respect to which there is an 

16 AIM price available for such drug. 

17 ‘‘(d) CONFIDENTIALITY OF INFORMATION.—Infor18 mation submitted to the Secretary under this part by a 

19 manufacturer of a selected drug that is proprietary infor20 mation of such manufacturer (as determined by the Sec21 retary) may be used only by the Secretary or disclosed 

22 to and used by the Comptroller General of the United 

23 States or the Medicare Payment Advisory Commission for 

24 purposes of carrying out this part. 

25 ‘‘(e) REGULATIONS.— 
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1 ‘‘(1) IN GENERAL.—The Secretary shall, pursu2 ant to rulemaking, specify, in accordance with para3 graph (2), the information that must be submitted 

4 under subsection (a)(4). 

5 ‘‘(2) INFORMATION SPECIFIED.—Information 

6 described in paragraph (1), with respect to a se7 lected drug, shall include information on sales of the 

8 drug (by the manufacturer of the drug or by another 

9 entity under license or other agreement with the 

10 manufacturer, with respect to the sales of such drug, 

11 regardless of the name under which the drug is sold) 

12 in any foreign country that is part of the AIM price. 

13 The Secretary shall verify, to the extent practicable, 

14 such sales from appropriate officials of the govern15 ment of the foreign country involved. 

16 ‘‘(f) COMPLIANCE WITH REQUIREMENTS FOR AD17 MINISTRATION OF PROGRAM.—Each manufacturer with 

18 an agreement in effect under this section shall comply with 

19 requirements imposed by the Secretary or a third party 

20 with a contract under section 1196(c)(1), as applicable, 

21 for purposes of administering the program. 

22 ‘‘SEC. 1194. NEGOTIATION AND RENEGOTIATION PROCESS. 

23 ‘‘(a) IN GENERAL.—For purposes of this part, under 

24 an agreement under section 1193 between the Secretary 

25 and a manufacturer of a selected drug, with respect to 
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1 the period for which such agreement is in effect and in 

2 accordance with subsections (b) and (c), the Secretary and 

3 the manufacturer— 

4 ‘‘(1) shall during the voluntary negotiation pe5 riod with respect to the initial price applicability 

6 year for such drug, in accordance with this section, 

7 negotiate a maximum fair price for such drug for 

8 the purpose described in section 1193(a)(1); and 

9 ‘‘(2) as applicable pursuant to section 

10 1193(a)(2) and in accordance with the process speci11 fied pursuant to such section, renegotiate such max12 imum fair price for such drug for the purpose de13 scribed in such section. 

14 ‘‘(b) NEGOTIATING METHODOLOGY AND OBJEC15 TIVE.— 

16 ‘‘(1) IN GENERAL.—The Secretary shall develop 

17 and use a consistent methodology for negotiations 

18 under subsection (a) that, in accordance with para19 graph (2) and subject to paragraph (3), achieves the 

20 lowest maximum fair price for each selected drug 

21 while appropriately rewarding innovation. 

22 ‘‘(2) PRIORITIZING FACTORS.—In considering 

23 the factors described in subsection (d) in negotiating 

24 (and, as applicable, renegotiating) the maximum fair 

25 price for a selected drug, the Secretary shall, to the 
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1 extent practicable, consider all of the available fac2 tors listed but shall prioritize the following factors: 

3 ‘‘(A) RESEARCH AND DEVELOPMENT

4 COSTS.—The factor described in paragraph 

5 (1)(A) of subsection (d). 

6 ‘‘(B) MARKET DATA.—The factor de7 scribed in paragraph (1)(B) of such subsection. 

8 ‘‘(C) UNIT COSTS OF PRODUCTION AND

9 DISTRIBUTION.—The factor described in para10 graph (1)(C) of such subsection. 

11 ‘‘(D) COMPARISON TO EXISTING THERA12 PEUTIC ALTERNATIVES.—The factor described 

13 in paragraph (2)(A) of such subsection. 

14 ‘‘(3) REQUIREMENT.— 

15 ‘‘(A) IN GENERAL.—In negotiating the 

16 maximum fair price of a selected drug, with re17 spect to an initial price applicability year for 

18 the selected drug, and, as applicable, in renego19 tiating the maximum fair price for such drug, 

20 with respect to a subsequent year during the 

21 price applicability period for such drug, in the 

22 case that the manufacturer of the selected drug 

23 offers under the negotiation or renegotiation, as 

24 applicable, a price for such drug that is not 

25 more than the target price described in sub-
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1 paragraph (B) for such drug for the respective 

2 year, the Secretary shall agree under such ne3 gotiation or renegotiation, respectively, to such 

4 offered price as the maximum fair price. 

5 ‘‘(B) TARGET PRICE.— 

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

7 (ii), the target price described in this sub8 paragraph for a selected drug with respect 

9 to a year, is the average price (which shall 

10 be the net average price, if practicable, and 

11 volume-weighted, if practicable) for a unit 

12 of such drug for sales of such drug, as 

13 computed (across different dosage forms 

14 and strengths of the drug and not based 

15 on the specific formulation or package size 

16 or package type of the drug) in the appli17 cable country described in section 

18 1191(c)(3)(B) with respect to such drug 

19 that, with respect to such year, has the 

20 lowest average price for such drug as com21 pared to the average prices (as so com22 puted) of such drug with respect to such 

23 year in the other applicable countries de24 scribed in such section with respect to such 

25 drug. 
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1 ‘‘(ii) SELECTED DRUGS WITHOUT AIM

2 PRICE.—In applying this paragraph in the 

3 case of negotiating the maximum fair price 

4 of a selected drug for which there is no 

5 AIM price available with respect to the ini6 tial price applicability year for such drug, 

7 or, as applicable, renegotiating the max8 imum fair price for such drug with respect 

9 to a subsequent year during the price ap10 plicability period for such drug before the 

11 first plan year for which there is an AIM 

12 price available for such drug, the target 

13 price described in this subparagraph for 

14 such drug and respective year is the 

15 amount that is 80 percent of the average 

16 manufacturer price (as defined in section 

17 1927(k)(1)) for such drug and year. 

18 ‘‘(4) ANNUAL REPORT.—After the completion 

19 of each voluntary negotiation period, the Secretary 

20 shall submit to Congress a report on the maximum 

21 fair prices negotiated (or, as applicable, renegoti22 ated) for such period. Such report shall include in23 formation on how such prices so negotiated (or re24 negotiated) meet the requirements of this part, in25 cluding the requirements of this subsection. 
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1 ‘‘(c) LIMITATION.— 

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

3 the maximum fair price negotiated (including as re4 negotiated) under this section for a selected drug, 

5 with respect to each plan year during a price appli6 cability period for such drug, shall not exceed 120 

7 percent of the AIM price applicable to such drug 

8 with respect to such year. 

9 ‘‘(2) SELECTED DRUGS WITHOUT AIM PRICE.— 

10 In the case of a selected drug for which there is no 

11 AIM price available with respect to the initial price 

12 applicability year for such drug, for each plan year 

13 during the price applicability period before the first 

14 plan year for which there is an AIM price available 

15 for such drug, the maximum fair price negotiated 

16 (including as renegotiated) under this section for the 

17 selected drug shall not exceed the amount equal to 

18 85 percent of the average manufacturer price for the 

19 drug with respect to such year. 

20 ‘‘(d) CONSIDERATIONS.—For purposes of negotiating 

21 and, as applicable, renegotiating (including for purposes 

22 of determining whether to renegotiate) the maximum fair 

23 price of a selected drug under this part with the manufac24 turer of the drug, the Secretary, consistent with sub25 section (b)(2), shall take into consideration the factors de-
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1 scribed in paragraphs (1), (2), (3), and (5), and may take 

2 into consideration the factor described in paragraph (4): 

3 ‘‘(1) MANUFACTURER-SPECIFIC INFORMA4 TION.—The following information, including as sub5 mitted by the manufacturer: 

6 ‘‘(A) Research and development costs of 

7 the manufacturer for the drug and the extent to 

8 which the manufacturer has recouped research 

9 and development costs. 

10 ‘‘(B) Market data for the drug, including 

11 the distribution of sales across different pro12 grams and purchasers and projected future rev13 enues for the drug. 

14 ‘‘(C) Unit costs of production and distribu15 tion of the drug. 

16 ‘‘(D) Prior Federal financial support for 

17 novel therapeutic discovery and development 

18 with respect to the drug. 

19 ‘‘(E) Data on patents and on existing and 

20 pending exclusivity for the drug. 

21 ‘‘(F) National sales data for the drug. 

22 ‘‘(G) Information on clinical trials for the 

23 drug in the United States or in applicable coun24 tries described in section 1191(c)(3)(B). 
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1 ‘‘(2) INFORMATION ON ALTERNATIVE PROD2 UCTS.—The following information: 

3 ‘‘(A) The extent to which the drug rep4 resents a therapeutic advance as compared to 

5 existing therapeutic alternatives and, to the ex6 tent such information is available, the costs of 

7 such existing therapeutic alternatives. 

8 ‘‘(B) Information on approval by the Food 

9 and Drug Administration of alternative drug 

10 products. 

11 ‘‘(C) Information on comparative effective12 ness analysis for such products, taking into 

13 consideration the effects of such products on 

14 specific populations, such as individuals with 

15 disabilities, the elderly, terminally ill, children, 

16 and other patient populations. 

17 In considering information described in subpara18 graph (C), the Secretary shall not use evidence or 

19 findings from comparative clinical effectiveness re20 search in a manner that treats extending the life of 

21 an elderly, disabled, or terminally ill individual as of 

22 lower value than extending the life of an individual 

23 who is younger, nondisabled, or not terminally ill. 

24 Nothing in the previous sentence shall affect the ap-
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1 plication or consideration of an AIM price for a se2 lected drug. 

3 ‘‘(3) FOREIGN SALES INFORMATION.—To the 

4 extent available on a timely basis, including as pro5 vided by a manufacturer of the selected drug or oth6 erwise, information on sales of the selected drug in 

7 each of the countries described in section 

8 1191(c)(3)(B). 

9 ‘‘(4) VA DRUG PRICING INFORMATION.—Infor10 mation disclosed to the Secretary pursuant to sub11 section (f). 

12 ‘‘(5) ADDITIONAL INFORMATION.—Information 

13 submitted to the Secretary, in accordance with a 

14 process specified by the Secretary, by other parties 

15 that are affected by the establishment of a maximum 

16 fair price for the selected drug. 

17 ‘‘(e) REQUEST FOR INFORMATION.—For purposes of 

18 negotiating and, as applicable, renegotiating (including for 

19 purposes of determining whether to renegotiate) the max20 imum fair price of a selected drug under this part with 

21 the manufacturer of the drug, with respect to a price ap22 plicability period, and other relevant data for purposes of 

23 this section— 

24 ‘‘(1) the Secretary shall, not later than the se25 lected drug publication date with respect to the ini-
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1 tial price applicability year of such period, request 

2 drug pricing information from the manufacturer of 

3 such selected drug, including information described 

4 in subsection (d)(1); and 

5 ‘‘(2) by not later than October 1 following the 

6 selected drug publication date, the manufacturer of 

7 such selected drug shall submit to the Secretary 

8 such requested information in such form and man9 ner as the Secretary may require. 

10 The Secretary shall request, from the manufacturer or 

11 others, such additional information as may be needed to 

12 carry out the negotiation and renegotiation process under 

13 this section. 

14 ‘‘(f) DISCLOSURE OF INFORMATION.—For purposes 

15 of this part, the Secretary of Veterans Affairs may disclose 

16 to the Secretary of Health and Human Services the price 

17 of any negotiation-eligible drug that is purchased pursuant 

18 to section 8126 of title 38, United States Code. 

19 ‘‘SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES. 

20 ‘‘(a) IN GENERAL.—With respect to an initial price 

21 applicability year and selected drug with respect to such 

22 year, not later than April 1 of the plan year prior to such 

23 initial price applicability year, the Secretary shall publish 

24 in the Federal Register the maximum fair price for such 
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1 drug negotiated under this part with the manufacturer of 

2 such drug. 

3 ‘‘(b) UPDATES.— 

4 ‘‘(1) SUBSEQUENT YEAR MAXIMUM FAIR

5 PRICES.—For a selected drug, for each plan year 

6 subsequent to the initial price applicability year for 

7 such drug with respect to which an agreement for 

8 such drug is in effect under section 1193, the Sec9 retary shall publish in the Federal Register— 

10 ‘‘(A) subject to subparagraph (B), the 

11 amount equal to the maximum fair price pub12 lished for such drug for the previous year, in13 creased by the annual percentage increase in 

14 the consumer price index for all urban con15 sumers (all items; U.S. city average) as of Sep16 tember of such previous year; or 

17 ‘‘(B) in the case the maximum fair price 

18 for such drug was renegotiated, for the first 

19 year for which such price as so renegotiated ap20 plies, such renegotiated maximum fair price. 

21 ‘‘(2) PRICES NEGOTIATED AFTER DEADLINE.— 

22 In the case of a selected drug with respect to an ini23 tial price applicability year for which the maximum 

24 fair price is determined under this part after the 

25 date of publication under this section, the Secretary 
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1 shall publish such maximum fair price in the Fed2 eral Register by not later than 30 days after the 

3 date such maximum price is so determined. 

4 ‘‘SEC. 1196. ADMINISTRATIVE DUTIES; COORDINATION PRO5 VISIONS. 

6 ‘‘(a) ADMINISTRATIVE DUTIES.— 

7 ‘‘(1) IN GENERAL.—For purposes of section 

8 1191, the administrative duties described in this sec9 tion are the following: 

10 ‘‘(A) The establishment of procedures (in11 cluding through agreements with manufacturers 

12 under this part, contracts with prescription 

13 drug plans under part D of title XVIII and 

14 MA–PD plans under part C of such title, and 

15 agreements under section 1197 with group 

16 health plans and health insurance issuers of 

17 health insurance coverage offered in the indi18 vidual or group market) under which the max19 imum fair price for a selected drug is provided 

20 to fair price eligible individuals, who with re21 spect to such drug are described in subpara22 graph (A) of section 1191(c)(1), at pharmacies 

23 or by mail order service at the point-of-sale of 

24 the drug for the applicable price period for such 

25 drug and providing that such maximum fair 
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1 price is used for determining cost-sharing under 

2 such plans or coverage for the selected drug. 

3 ‘‘(B) The establishment of procedures (in4 cluding through agreements with manufacturers 

5 under this part and contracts with hospitals, 

6 physicians, and other providers of services and 

7 suppliers and agreements under section 1197 

8 with group health plans and health insurance 

9 issuers of health insurance coverage offered in 

10 the individual or group market) under which, in 

11 the case of a selected drug furnished or admin12 istered by such a hospital, physician, or other 

13 provider of services or supplier to fair price eli14 gible individuals (who with respect to such drug 

15 are described in subparagraph (B) of section 

16 1191(c)(1)), the maximum fair price for the se17 lected drug is provided to such hospitals, physi18 cians, and other providers of services and sup19 pliers (as applicable) with respect to such indi20 viduals and providing that such maximum fair 

21 price is used for determining cost-sharing under 

22 the respective part, plan, or coverage for the se23 lected drug. 

24 ‘‘(C) The establishment of procedures (in25 cluding through agreements and contracts de-
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1 scribed in subparagraphs (A) and (B)) to en2 sure that, not later than 90 days after the dis3 pensing of a selected drug to a fair price eligi4 ble individual by a pharmacy or mail order serv5 ice, the pharmacy or mail order service is reim6 bursed for an amount equal to the difference 

7 between— 

8 ‘‘(i) the lesser of— 

9 ‘‘(I) the wholesale acquisition 

10 cost of the drug; 

11 ‘‘(II) the national average drug 

12 acquisition cost of the drug; and 

13 ‘‘(III) any other similar deter14 mination of pharmacy acquisition 

15 costs of the drug, as determined by 

16 the Secretary; and 

17 ‘‘(ii) the maximum fair price for the 

18 drug. 

19 ‘‘(D) The establishment of procedures to 

20 ensure that the maximum fair price for a se21 lected drug is applied before— 

22 ‘‘(i) any coverage or financial assist23 ance under other health benefit plans or 

24 programs that provide coverage or finan25 cial assistance for the purchase or provi-
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1 sion of prescription drug coverage on be2 half of fair price eligible individuals as the 

3 Secretary may specify; and 

4 ‘‘(ii) any other discounts. 

5 ‘‘(E) The establishment of procedures to 

6 enter into appropriate agreements and protocols 

7 for the ongoing computation of AIM prices for 

8 selected drugs, including, to the extent possible, 

9 to compute the AIM price for selected drugs 

10 and including by providing that the manufac11 turer of such a selected drug should provide in12 formation for such computation not later than 

13 3 months after the first date of the voluntary 

14 negotiation period for such selected drug. 

15 ‘‘(F) The establishment of procedures to 

16 compute and apply the maximum fair price 

17 across different strengths and dosage forms of 

18 a selected drug and not based on the specific 

19 formulation or package size or package type of 

20 the drug. 

21 ‘‘(G) The establishment of procedures to 

22 negotiate and apply the maximum fair price in 

23 a manner that does not include any dispensing 

24 or similar fee. 
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1 ‘‘(H) The establishment of procedures to 

2 carry out the provisions of this part, as applica3 ble, with respect to— 

4 ‘‘(i) fair price eligible individuals who 

5 are enrolled under a prescription drug plan 

6 under part D of title XVIII or an MA–PD 

7 plan under part C of such title; 

8 ‘‘(ii) fair price eligible individuals who 

9 are enrolled under a group health plan or 

10 health insurance coverage offered by a 

11 health insurance issuer in the individual or 

12 group market with respect to which there 

13 is an agreement in effect under section 

14 1197; and 

15 ‘‘(iii) fair price eligible individuals who 

16 are entitled to benefits under part A of 

17 title XVIII or enrolled under part B of 

18 such title. 

19 ‘‘(I) The establishment of a negotiation 

20 process and renegotiation process in accordance 

21 with section 1194, including a process for ac22 quiring information described in subsection (d) 

23 of such section and determining amounts de24 scribed in subsection (b) of such section. 
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1 ‘‘(J) The provision of a reasonable dispute 

2 resolution mechanism to resolve disagreements 

3 between manufacturers, fair price eligible indi4 viduals, and the third party with a contract 

5 under subsection (c)(1). 

6 ‘‘(2) MONITORING COMPLIANCE.— 

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

8 monitor compliance by a manufacturer with the 

9 terms of an agreement under section 1193, in10 cluding by establishing a mechanism through 

11 which violations of such terms may be reported. 

12 ‘‘(B) NOTIFICATION.—If a third party 

13 with a contract under subsection (c)(1) deter14 mines that the manufacturer is not in compli15 ance with such agreement, the third party shall 

16 notify the Secretary of such noncompliance for 

17 appropriate enforcement under section 4192 of 

18 the Internal Revenue Code of 1986 or section 

19 1198, as applicable. 

20 ‘‘(b) COLLECTION OF DATA.— 

21 ‘‘(1) FROM PRESCRIPTION DRUG PLANS AND

22 MA–PD PLANS.—The Secretary may collect appro23 priate data from prescription drug plans under part 

24 D of title XVIII and MA–PD plans under part C of 

25 such title in a timeframe that allows for maximum 
129 

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1 fair prices to be provided under this part for selected 

2 drugs. 

3 ‘‘(2) FROM HEALTH PLANS.—The Secretary 

4 may collect appropriate data from group health 

5 plans or health insurance issuers offering group or 

6 individual health insurance coverage in a timeframe 

7 that allows for maximum fair prices to be provided 

8 under this part for selected drugs. 

9 ‘‘(3) COORDINATION OF DATA COLLECTION.— 

10 To the extent feasible, as determined by the Sec11 retary, the Secretary shall ensure that data collected 

12 pursuant to this subsection is coordinated with, and 

13 not duplicative of, other Federal data collection ef14 forts. 

15 ‘‘(c) CONTRACT WITH THIRD PARTIES.— 

16 ‘‘(1) IN GENERAL.—The Secretary may enter 

17 into a contract with 1 or more third parties to ad18 minister the requirements established by the Sec19 retary in order to carry out this part. At a min20 imum, the contract with a third party under the pre21 ceding sentence shall require that the third party— 

22 ‘‘(A) receive and transmit information be23 tween the Secretary, manufacturers, and other 

24 individuals or entities the Secretary determines 

25 appropriate; 
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1 ‘‘(B) receive, distribute, or facilitate the 

2 distribution of funds of manufacturers to ap3 propriate individuals or entities in order to 

4 meet the obligations of manufacturers under 

5 agreements under this part; 

6 ‘‘(C) provide adequate and timely informa7 tion to manufacturers, consistent with the 

8 agreement with the manufacturer under this 

9 part, as necessary for the manufacturer to ful10 fill its obligations under this part; and 

11 ‘‘(D) permit manufacturers to conduct 

12 periodic audits, directly or through contracts, of 

13 the data and information used by the third 

14 party to determine discounts for applicable 

15 drugs of the manufacturer under the program. 

16 ‘‘(2) PERFORMANCE REQUIREMENTS.—The 

17 Secretary shall establish performance requirements 

18 for a third party with a contract under paragraph 

19 (1) and safeguards to protect the independence and 

20 integrity of the activities carried out by the third 

21 party under the program under this part. 

22 ‘‘SEC. 1197. VOLUNTARY PARTICIPATION BY OTHER 

23 HEALTH PLANS. 

24 ‘‘(a) AGREEMENT TO PARTICIPATE UNDER PRO25 GRAM.— 
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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

2 under the program under this part the Secretary 

3 shall be treated as having in effect an agreement 

4 with a group health plan or health insurance issuer 

5 offering group or individual health insurance cov6 erage (as such terms are defined in section 2791 of 

7 the Public Health Service Act), with respect to a 

8 price applicability period and a selected drug with 

9 respect to such period— 

10 ‘‘(A) with respect to such selected drug 

11 furnished or dispensed at a pharmacy or by 

12 mail order service if coverage is provided under 

13 such plan or coverage during such period for 

14 such selected drug as so furnished or dispensed; 

15 and 

16 ‘‘(B) with respect to such selected drug 

17 furnished or administered by a hospital, physi18 cian, or other provider of services or supplier if 

19 coverage is provided under such plan or cov20 erage during such period for such selected drug 

21 as so furnished or administered. 

22 ‘‘(2) OPTING OUT OF AGREEMENT.—The Sec23 retary shall not be treated as having in effect an 

24 agreement under the program under this part with 

25 a group health plan or health insurance issuer offer-
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1 ing group or individual health insurance coverage 

2 with respect to a price applicability period and a se3 lected drug with respect to such period if such a 

4 plan or issuer affirmatively elects, through a process 

5 specified by the Secretary, not to participate under 

6 the program with respect to such period and drug. 

7 ‘‘(b) PUBLICATION OF ELECTION.—With respect to 

8 each price applicability period and each selected drug with 

9 respect to such period, the Secretary and the Secretary 

10 of Labor and the Secretary of the Treasury, as applicable, 

11 shall make public a list of each group health plan and each 

12 health insurance issuer offering group or individual health 

13 insurance coverage, with respect to which coverage is pro14 vided under such plan or coverage for such drug, that has 

15 elected under subsection (a) not to participate under the 

16 program with respect to such period and drug. 

17 ‘‘SEC. 1198. CIVIL MONETARY PENALTY. 

18 ‘‘(a) VIOLATIONS RELATING TO OFFERING OF MAX19 IMUM FAIR PRICE.—Any manufacturer of a selected drug 

20 that has entered into an agreement under section 1193, 

21 with respect to a plan year during the price applicability 

22 period for such drug, that does not provide access to a 

23 price that is not more than the maximum fair price (or 

24 a lesser price) for such drug for such year— 
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1 ‘‘(1) to a fair price eligible individual who with 

2 respect to such drug is described in subparagraph 

3 (A) of section 1191(c)(1) and who is furnished or 

4 dispensed such drug during such year; or 

5 ‘‘(2) to a hospital, physician, or other provider 

6 of services or supplier with respect to fair price eligi7 ble individuals who with respect to such drug is de8 scribed in subparagraph (B) of such section and is 

9 furnished or administered such drug by such hos10 pital, physician, or provider or supplier during such 

11 year; 

12 shall be subject to a civil monetary penalty equal to ten 

13 times the amount equal to the difference between the price 

14 for such drug made available for such year by such manu15 facturer with respect to such individual or hospital, physi16 cian, provider, or supplier and the maximum fair price for 

17 such drug for such year. 

18 ‘‘(b) VIOLATIONS OF CERTAIN TERMS OF AGREE19 MENT.—Any manufacturer of a selected drug that has en20 tered into an agreement under section 1193, with respect 

21 to a plan year during the price applicability period for 

22 such drug, that is in violation of a requirement imposed 

23 pursuant to section 1193(a)(6) shall be subject to a civil 

24 monetary penalty of not more than $1,000,000 for each 

25 such violation. 
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1 ‘‘(c) APPLICATION.—The provisions of section 1128A 

2 (other than subsections (a) and (b)) shall apply to a civil 

3 monetary penalty under this section in the same manner 

4 as such provisions apply to a penalty or proceeding under 

5 section 1128A(a). 

6 ‘‘SEC. 1199. MISCELLANEOUS PROVISIONS. 

7 ‘‘(a) PAPERWORK REDUCTION ACT.—Chapter 35 of 

8 title 44, United States Code, shall not apply to data col9 lected under this part. 

10 ‘‘(b) NATIONAL ACADEMY OF MEDICINE STUDY.— 

11 Not later than December 31, 2025, the National Academy 

12 of Medicine shall conduct a study, and submit to Congress 

13 a report, on recommendations for improvements to the 

14 program under this part, including the determination of 

15 the limits applied under section 1194(c). 

16 ‘‘(c) MEDPAC STUDY.—Not later than December 31, 

17 2025, the Medicare Payment Advisory Commission shall 

18 conduct a study, and submit to Congress a report, on the 

19 program under this part with respect to the Medicare pro20 gram under title XVIII, including with respect to the ef21 fect of the program on individuals entitled to benefits or 

22 enrolled under such title. 

23 ‘‘(d) LIMITATION ON JUDICIAL REVIEW.—The fol24 lowing shall not be subject to judicial review: 
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1 ‘‘(1) The selection of drugs for publication 

2 under section 1192(a). 

3 ‘‘(2) The determination of whether a drug is a 

4 negotiation-eligible drug under section 1192(d). 

5 ‘‘(3) The determination of the maximum fair 

6 price of a selected drug under section 1194. 

7 ‘‘(4) The determination of units of a drug for 

8 purposes of section 1191(c)(3). 

9 ‘‘(e) COORDINATION.—In carrying out this part with 

10 respect to group health plans or health insurance coverage 

11 offered in the group market that are subject to oversight 

12 by the Secretary of Labor or the Secretary of the Treas13 ury, the Secretary of Health and Human Services shall 

14 coordinate with such respective Secretary. 

15 ‘‘(f) DATA SHARING.—The Secretary shall share with 

16 the Secretary of the Treasury such information as is nec17 essary to determine the tax imposed by section 4192 of 

18 the Internal Revenue Code of 1986. 

19 ‘‘(g) GAO STUDY.—Not later than December 31, 

20 2025, the Comptroller General of the United States shall 

21 conduct a study of, and submit to Congress a report on, 

22 the implementation of the Fair Price Negotiation Program 

23 under this part.’’. 

24 (b) APPLICATION OF MAXIMUM FAIR PRICES AND

25 CONFORMING AMENDMENTS.— 
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1 (1) UNDER MEDICARE.— 

2 (A) APPLICATION TO PAYMENTS UNDER

3 PART B.—Section 1847A(b)(1)(B) of the Social 

4 Security Act (42 U.S.C. 1395w–3a(b)(1)(B)) is 

5 amended by inserting ‘‘or in the case of such a 

6 drug or biological that is a selected drug (as de7 fined in section 1192(c)), with respect to a 

8 price applicability period (as defined in section 

9 1191(b)(2)), 106 percent of the maximum fair 

10 price (as defined in section 1191(c)(2) applica11 ble for such drug and a plan year during such 

12 period’’ after ‘‘paragraph (4)’’. 

13 (B) EXCEPTION TO PART D NON-INTER14 FERENCE.—Section 1860D–11(i) of the Social 

15 Security Act (42 U.S.C. 1395w–111(i)) is 

16 amended by inserting ‘‘, except as provided 

17 under part E of title XI’’ after ‘‘the Secretary’’. 

18 (C) APPLICATION AS NEGOTIATED PRICE

19 UNDER PART D.—Section 1860D–2(d)(1) of the 

20 Social Security Act (42 U.S.C. 1395w– 

21 102(d)(1)) is amended— 

22 (i) in subparagraph (B), by inserting 

23 ‘‘, subject to subparagraph (D),’’ after 

24 ‘‘negotiated prices’’; and 
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1 (ii) by adding at the end the following 

2 new subparagraph: 

3 ‘‘(D) APPLICATION OF MAXIMUM FAIR

4 PRICE FOR SELECTED DRUGS.—In applying this 

5 section, in the case of a covered part D drug 

6 that is a selected drug (as defined in section 

7 1192(c)), with respect to a price applicability 

8 period (as defined in section 1191(b)(2)), the 

9 negotiated prices used for payment (as de10 scribed in this subsection) shall be the max11 imum fair price (as defined in section 

12 1191(c)(2)) for such drug and for each plan 

13 year during such period.’’. 

14 (D) INFORMATION FROM PRESCRIPTION

15 DRUG PLANS AND MA–PD PLANS REQUIRED.— 

16 (i) PRESCRIPTION DRUG PLANS.—Sec17 tion 1860D–12(b) of the Social Security 

18 Act (42 U.S.C. 1395w–112(b)) is amended 

19 by adding at the end the following new 

20 paragraph: 

21 ‘‘(8) PROVISION OF INFORMATION RELATED TO

22 MAXIMUM FAIR PRICES.—Each contract entered into 

23 with a PDP sponsor under this part with respect to 

24 a prescription drug plan offered by such sponsor 

25 shall require the sponsor to provide information to 
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1 the Secretary as requested by the Secretary in ac2 cordance with section 1196(b).’’. 

3 (ii) MA–PD PLANS.—Section 

4 1857(f)(3) of the Social Security Act (42 

5 U.S.C. 1395w–27(f)(3)) is amended by 

6 adding at the end the following new sub7 paragraph: 

8 ‘‘(E) PROVISION OF INFORMATION RE9 LATED TO MAXIMUM FAIR PRICES.—Section 

10 1860D–12(b)(8).’’. 

11 (2) UNDER GROUP HEALTH PLANS AND

12 HEALTH INSURANCE COVERAGE.— 

13 (A) PHSA.—Part A of title XXVII of the 

14 Public Health Service Act is amended by insert15 ing after section 2729 the following new sec16 tion: 

17 ‘‘SEC. 2729A. FAIR PRICE NEGOTIATION PROGRAM AND AP18 PLICATION OF MAXIMUM FAIR PRICES. 

19 ‘‘(a) IN GENERAL.—In the case of a group health 

20 plan or health insurance issuer offering group or indi21 vidual health insurance coverage that is treated under sec22 tion 1197 of the Social Security Act as having in effect 

23 an agreement with the Secretary under the Fair Price Ne24 gotiation Program under part E of title XI of such Act, 

25 with respect to a price applicability period (as defined in 
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1 section 1191(b) of such Act) and a selected drug (as de2 fined in section 1192(c) of such Act) with respect to such 

3 period with respect to which coverage is provided under 

4 such plan or coverage— 

5 ‘‘(1) the provisions of such part shall apply— 

6 ‘‘(A) if coverage of such selected drug is 

7 provided under such plan or coverage if the 

8 drug is furnished or dispensed at a pharmacy 

9 or by a mail order service, to the plans or cov10 erage offered by such plan or issuer, and to the 

11 individuals enrolled under such plans or cov12 erage, during such period, with respect to such 

13 selected drug, in the same manner as such pro14 visions apply to prescription drug plans and 

15 MA–PD plans, and to individuals enrolled 

16 under such prescription drug plans and MA– 

17 PD plans during such period; and 

18 ‘‘(B) if coverage of such selected drug is 

19 provided under such plan or coverage if the 

20 drug is furnished or administered by a hospital, 

21 physician, or other provider of services or sup22 plier, to the plans or coverage offered by such 

23 plan or issuers, to the individuals enrolled 

24 under such plans or coverage, and to hospitals, 

25 physicians, and other providers of services and 
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1 suppliers during such period, with respect to 

2 such drug in the same manner as such provi3 sions apply to the Secretary, to individuals enti4 tled to benefits under part A of title XVIII or 

5 enrolled under part B of such title, and to hos6 pitals, physicians, and other providers and sup7 pliers participating under title XVIII during 

8 such period; 

9 ‘‘(2) the plan or issuer shall apply any cost10 sharing responsibilities under such plan or coverage, 

11 with respect to such selected drug, by substituting 

12 an amount not more than the maximum fair price 

13 negotiated under such part E of title XI for such 

14 drug in lieu of the drug price upon which the cost15 sharing would have otherwise applied, and such cost16 sharing responsibilities with respect to such selected 

17 drug may not exceed such maximum fair price; and 

18 ‘‘(3) the Secretary shall apply the provisions of 

19 such part E to such plan, issuer, and coverage, such 

20 individuals so enrolled in such plans and coverage, 

21 and such hospitals, physicians, and other providers 

22 and suppliers participating in such plans and cov23 erage. 

24 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION

25 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health 
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1 plan or a health insurance issuer offering group or indi2 vidual health insurance coverage shall publicly disclose in 

3 a manner and in accordance with a process specified by 

4 the Secretary any election made under section 1197 of the 

5 Social Security Act by the plan or issuer to not participate 

6 in the Fair Price Negotiation Program under part E of 

7 title XI of such Act with respect to a selected drug (as 

8 defined in section 1192(c) of such Act) for which coverage 

9 is provided under such plan or coverage before the begin10 ning of the plan year for which such election was made.’’. 

11 (B) ERISA.— 

12 (i) IN GENERAL.—Subpart B of part 

13 7 of subtitle B of title I of the Employee 

14 Retirement Income Security Act of 1974 

15 (29 U.S.C. 1181 et seq.) is amended by 

16 adding at the end the following new sec17 tion: 

18 ‘‘SEC. 716. FAIR PRICE NEGOTIATION PROGRAM AND APPLI19 CATION OF MAXIMUM FAIR PRICES. 

20 ‘‘(a) IN GENERAL.—In the case of a group health 

21 plan or health insurance issuer offering group health in22 surance coverage that is treated under section 1197 of the 

23 Social Security Act as having in effect an agreement with 

24 the Secretary under the Fair Price Negotiation Program 

25 under part E of title XI of such Act, with respect to a 
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1 price applicability period (as defined in section 1191(b) 

2 of such Act) and a selected drug (as defined in section 

3 1192(c) of such Act) with respect to such period with re4 spect to which coverage is provided under such plan or 

5 coverage— 

6 ‘‘(1) the provisions of such part shall apply, as 

7 applicable— 

8 ‘‘(A) if coverage of such selected drug is 

9 provided under such plan or coverage if the 

10 drug is furnished or dispensed at a pharmacy 

11 or by a mail order service, to the plans or cov12 erage offered by such plan or issuer, and to the 

13 individuals enrolled under such plans or cov14 erage, during such period, with respect to such 

15 selected drug, in the same manner as such pro16 visions apply to prescription drug plans and 

17 MA–PD plans, and to individuals enrolled 

18 under such prescription drug plans and MA– 

19 PD plans during such period; and 

20 ‘‘(B) if coverage of such selected drug is 

21 provided under such plan or coverage if the 

22 drug is furnished or administered by a hospital, 

23 physician, or other provider of services or sup24 plier, to the plans or coverage offered by such 

25 plan or issuers, to the individuals enrolled 
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•HR 1425 EH

1 under such plans or coverage, and to hospitals, 

2 physicians, and other providers of services and 

3 suppliers during such period, with respect to 

4 such drug in the same manner as such provi5 sions apply to the Secretary, to individuals enti6 tled to benefits under part A of title XVIII or 

7 enrolled under part B of such title, and to hos8 pitals, physicians, and other providers and sup9 pliers participating under title XVIII during 

10 such period; 

11 ‘‘(2) the plan or issuer shall apply any cost12 sharing responsibilities under such plan or coverage, 

13 with respect to such selected drug, by substituting 

14 an amount not more than the maximum fair price 

15 negotiated under such part E of title XI for such 

16 drug in lieu of the drug price upon which the cost17 sharing would have otherwise applied, and such cost18 sharing responsibilities with respect to such selected 

19 drug may not exceed such maximum fair price; and 

20 ‘‘(3) the Secretary shall apply the provisions of 

21 such part E to such plan, issuer, and coverage, and 

22 such individuals so enrolled in such plans. 

23 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION

24 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health 

25 plan or a health insurance issuer offering group health in-
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1 surance coverage shall publicly disclose in a manner and 

2 in accordance with a process specified by the Secretary 

3 any election made under section 1197 of the Social Secu4 rity Act by the plan or issuer to not participate in the 

5 Fair Price Negotiation Program under part E of title XI 

6 of such Act with respect to a selected drug (as defined 

7 in section 1192(c) of such Act) for which coverage is pro8 vided under such plan or coverage before the beginning 

9 of the plan year for which such election was made.’’. 

10 (ii) APPLICATION TO RETIREE AND

11 CERTAIN SMALL GROUP HEALTH PLANS.— 

12 Section 732(a) of the Employee Retire13 ment Income Security Act of 1974 (29 

14 U.S.C. 1191a(a)) is amended by striking 

15 ‘‘section 711’’ and inserting ‘‘sections 711 

16 and 716’’. 

17 (iii) CLERICAL AMENDMENT.—The 

18 table of sections for subpart B of part 7 of 

19 subtitle B of title I of the Employee Re20 tirement Income Security Act of 1974 is 

21 amended by adding at the end the fol22 lowing: 

‘‘Sec. 716. Fair Price Negotiation Program and application of maximum fair 

prices.’’. 

23 (C) IRC.— 
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1 (i) IN GENERAL.—Subchapter B of 

2 chapter 100 of the Internal Revenue Code 

3 of 1986 is amended by adding at the end 

4 the following new section: 

5 ‘‘SEC. 9816. FAIR PRICE NEGOTIATION PROGRAM AND AP6 PLICATION OF MAXIMUM FAIR PRICES. 

7 ‘‘(a) IN GENERAL.—In the case of a group health 

8 plan that is treated under section 1197 of the Social Secu9 rity Act as having in effect an agreement with the Sec10 retary under the Fair Price Negotiation Program under 

11 part E of title XI of such Act, with respect to a price 

12 applicability period (as defined in section 1191(b) of such 

13 Act) and a selected drug (as defined in section 1192(c) 

14 of such Act) with respect to such period with respect to 

15 which coverage is provided under such plan— 

16 ‘‘(1) the provisions of such part shall apply, as 

17 applicable— 

18 ‘‘(A) if coverage of such selected drug is 

19 provided under such plan if the drug is fur20 nished or dispensed at a pharmacy or by a mail 

21 order service, to the plan, and to the individuals 

22 enrolled under such plan during such period, 

23 with respect to such selected drug, in the same 

24 manner as such provisions apply to prescription 

25 drug plans and MA–PD plans, and to individ-
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1 uals enrolled under such prescription drug 

2 plans and MA–PD plans during such period; 

3 and 

4 ‘‘(B) if coverage of such selected drug is 

5 provided under such plan if the drug is fur6 nished or administered by a hospital, physician, 

7 or other provider of services or supplier, to the 

8 plan, to the individuals enrolled under such 

9 plan, and to hospitals, physicians, and other 

10 providers of services and suppliers during such 

11 period, with respect to such drug in the same 

12 manner as such provisions apply to the Sec13 retary, to individuals entitled to benefits under 

14 part A of title XVIII or enrolled under part B 

15 of such title, and to hospitals, physicians, and 

16 other providers and suppliers participating 

17 under title XVIII during such period; 

18 ‘‘(2) the plan shall apply any cost-sharing re19 sponsibilities under such plan, with respect to such 

20 selected drug, by substituting an amount not more 

21 than the maximum fair price negotiated under such 

22 part E of title XI for such drug in lieu of the drug 

23 price upon which the cost-sharing would have other24 wise applied, and such cost-sharing responsibilities 
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1 with respect to such selected drug may not exceed 

2 such maximum fair price; and 

3 ‘‘(3) the Secretary shall apply the provisions of 

4 such part E to such plan and such individuals so en5 rolled in such plan. 

6 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION

7 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health 

8 plan shall publicly disclose in a manner and in accordance 

9 with a process specified by the Secretary any election 

10 made under section 1197 of the Social Security Act by 

11 the plan to not participate in the Fair Price Negotiation 

12 Program under part E of title XI of such Act with respect 

13 to a selected drug (as defined in section 1192(c) of such 

14 Act) for which coverage is provided under such plan before 

15 the beginning of the plan year for which such election was 

16 made.’’. 

17 (ii) APPLICATION TO RETIREE AND

18 CERTAIN SMALL GROUP HEALTH PLANS.— 

19 Section 9831(a)(2) of the Internal Revenue 

20 Code of 1986 is amended by inserting 

21 ‘‘other than with respect to section 9816,’’ 

22 before ‘‘any group health plan’’. 

23 (iii) CLERICAL AMENDMENT.—The 

24 table of sections for subchapter B of chap-
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1 ter 100 of such Code is amended by add2 ing at the end the following new item: 

‘‘Sec. 9816. Fair Price Negotiation Program and application of maximum fair 

prices.’’. 

3 (3) FAIR PRICE NEGOTIATION PROGRAM PRICES

4 INCLUDED IN BEST PRICE AND AMP.—Section 1927 

5 of the Social Security Act (42 U.S.C. 1396r–8) is 

6 amended— 

7 (A) in subsection (c)(1)(C)(ii)— 

8 (i) in subclause (III), by striking at 

9 the end ‘‘; and’’; 

10 (ii) in subclause (IV), by striking at 

11 the end the period and inserting ‘‘; and’’; 

12 and 

13 (iii) by adding at the end the fol14 lowing new subclause: 

15 ‘‘(V) in the case of a rebate pe16 riod and a covered outpatient drug 

17 that is a selected drug (as defined in 

18 section 1192(c)) during such rebate 

19 period, shall be inclusive of the price 

20 for such drug made available from the 

21 manufacturer during the rebate period 

22 by reason of application of part E of 

23 title XI to any wholesaler, retailer, 

24 provider, health maintenance organi-
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1 zation, nonprofit entity, or govern2 mental entity within the United 

3 States.’’; and 

4 (B) in subsection (k)(1)(B), by adding at 

5 the end the following new clause: 

6 ‘‘(iii) CLARIFICATION.—Notwith7 standing clause (i), in the case of a rebate 

8 period and a covered outpatient drug that 

9 is a selected drug (as defined in section 

10 1192(c)) during such rebate period, any 

11 reduction in price paid during the rebate 

12 period to the manufacturer for the drug by 

13 a wholesaler or retail community pharmacy 

14 described in subparagraph (A) by reason of 

15 application of part E of title XI shall be 

16 included in the average manufacturer price 

17 for the covered outpatient drug.’’. 

18 (4) FEHBP.—Section 8902 of title 5, United 

19 States Code, is amended by adding at the end the 

20 following: 

21 ‘‘(p) A contract may not be made or a plan approved 

22 under this chapter with any carrier that has affirmatively 

23 elected, pursuant to section 1197 of the Social Security 

24 Act, not to participate in the Fair Price Negotiation Pro25 gram established under section 1191 of such Act for any 
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1 selected drug (as that term is defined in section 1192(c) 

2 of such Act).’’. 

3 (5) OPTION OF SECRETARY OF VETERANS AF4 FAIRS TO PURCHASE COVERED DRUGS AT MAXIMUM

5 FAIR PRICES.—Section 8126 of title 38, United 

6 States Code, is amended— 

7 (A) in subsection (a)(2), by inserting ‘‘, 

8 subject to subsection (j),’’ after ‘‘may not ex9 ceed’’; 

10 (B) in subsection (d), in the matter pre11 ceding paragraph (1), by inserting ‘‘, subject to 

12 subsection (j)’’ after ‘‘for the procurement of 

13 the drug’’; and 

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

15 subsection: 

16 ‘‘(j)(1) In the case of a covered drug that is a selected 

17 drug, for any year during the price applicability period for 

18 such drug, if the Secretary determines that the maximum 

19 fair price of such drug for such year is less than the price 

20 for such drug otherwise in effect pursuant to this section 

21 (including after application of any reduction under sub22 section (a)(2) and any discount under subsection (c)), at 

23 the option of the Secretary, in lieu of the maximum price 

24 (determined after application of the reduction under sub25 section (a)(2) and any discount under subsection (c), as 
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1 applicable) that would be permitted to be charged during 

2 such year for such drug pursuant to this section without 

3 application of this subsection, the maximum price per4 mitted to be charged during such year for such drug pur5 suant to this section shall be such maximum fair price for 

6 such drug and year. 

7 ‘‘(2) For purposes of this subsection: 

8 ‘‘(A) The term ‘maximum fair price’ means, 

9 with respect to a selected drug and year during the 

10 price applicability period for such drug, the max11 imum fair price (as defined in section 1191(c)(2) of 

12 the Social Security Act) for such drug and year. 

13 ‘‘(B) The term ‘negotiation eligible drug’ has 

14 the meaning given such term in section 1192(d)(1) 

15 of the Social Security Act. 

16 ‘‘(C) The term ‘price applicability period’ has, 

17 with respect to a selected drug, the meaning given 

18 such term in section 1191(b)(2) of such Act. 

19 ‘‘(D) The term ‘selected drug’ means, with re20 spect to a year, a drug that is a selected drug under 

21 section 1192(c) of such Act for such year.’’. 
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1 SEC. 302. DRUG MANUFACTURER EXCISE TAX FOR NON2 COMPLIANCE. 

3 (a) IN GENERAL.—Subchapter E of chapter 32 of the 

4 Internal Revenue Code of 1986 is amended by adding at 

5 the end the following new section: 

6 ‘‘SEC. 4192. SELECTED DRUGS DURING NONCOMPLIANCE 

7 PERIODS. 

8 ‘‘(a) IN GENERAL.—There is hereby imposed on the 

9 sale by the manufacturer, producer, or importer of any 

10 selected drug during a day described in subsection (b) a 

11 tax in an amount such that the applicable percentage is 

12 equal to the ratio of— 

13 ‘‘(1) such tax, divided by 

14 ‘‘(2) the sum of such tax and the price for 

15 which so sold. 

16 ‘‘(b) NONCOMPLIANCE PERIODS.—A day is described 

17 in this subsection with respect to a selected drug if it is 

18 a day during one of the following periods: 

19 ‘‘(1) The period beginning on the June 16th 

20 immediately following the selected drug publication 

21 date and ending on the first date during which the 

22 manufacturer of the drug has in place an agreement 

23 described in subsection (a) of section 1193 of the 

24 Social Security Act with respect to such drug. 

25 ‘‘(2) The period beginning on the April 1st im26 mediately following the June 16th described in para-
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1 graph (1) and ending on the first date during which 

2 the manufacturer of the drug has agreed to a max3 imum fair price under such agreement. 

4 ‘‘(3) In the case of a selected drug with respect 

5 to which the Secretary of Health and Human Serv6 ices has specified a renegotiation period under such 

7 agreement, the period beginning on the first date 

8 after the last date of such renegotiation period and 

9 ending on the first date during which the manufac10 turer of the drug has agreed to a renegotiated max11 imum fair price under such agreement. 

12 ‘‘(4) With respect to information that is re13 quired to be submitted to the Secretary of Health 

14 and Human Services under such agreement, the pe15 riod beginning on the date on which such Secretary 

16 certifies that such information is overdue and ending 

17 on the date that such information is so submitted. 

18 ‘‘(5) In the case of a selected drug with respect 

19 to which a payment is due under subsection (c) of 

20 such section 1193, the period beginning on the date 

21 on which the Secretary of Health and Human Serv22 ices certifies that such payment is overdue and end23 ing on the date that such payment is made in full. 

24 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 

25 this section, the term ‘applicable percentage’ means— 
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1 ‘‘(1) in the case of sales of a selected drug dur2 ing the first 90 days described in subsection (b) with 

3 respect to such drug, 65 percent, 

4 ‘‘(2) in the case of sales of such drug during 

5 the 91st day through the 180th day described in 

6 subsection (b) with respect to such drug, 75 percent, 

7 ‘‘(3) in the case of sales of such drug during 

8 the 181st day through the 270th day described in 

9 subsection (b) with respect to such drug, 85 percent, 

10 and 

11 ‘‘(4) in the case of sales of such drug during 

12 any subsequent day, 95 percent. 

13 ‘‘(d) SELECTED DRUG.—For purposes of this sec14 tion— 

15 ‘‘(1) IN GENERAL.—The term ‘selected drug’ 

16 means any selected drug (within the meaning of sec17 tion 1192 of the Social Security Act) which is manu18 factured or produced in the United States or entered 

19 into the United States for consumption, use, or 

20 warehousing. 

21 ‘‘(2) UNITED STATES.—The term ‘United 

22 States’ has the meaning given such term by section 

23 4612(a)(4). 

24 ‘‘(3) COORDINATION WITH RULES FOR POSSES25 SIONS OF THE UNITED STATES.—Rules similar to 
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1 the rules of paragraphs (2) and (4) of section 

2 4132(c) shall apply for purposes of this section. 

3 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

4 section, the terms ‘selected drug publication date’ and 

5 ‘maximum fair price’ have the meaning given such terms 

6 in section 1191 of the Social Security Act. 

7 ‘‘(f) ANTI-ABUSE RULE.—In the case of a sale which 

8 was timed for the purpose of avoiding the tax imposed by 

9 this section, the Secretary may treat such sale as occur10 ring during a day described in subsection (b).’’. 

11 (b) NO DEDUCTION FOR EXCISE TAX PAYMENTS.— 

12 Section 275 of the Internal Revenue Code of 1986 is 

13 amended by adding ‘‘or by section 4192’’ before the period 

14 at the end of subsection (a)(6). 

15 (c) CONFORMING AMENDMENTS.— 

16 (1) Section 4221(a) of the Internal Revenue 

17 Code of 1986 is amended by inserting ‘‘or 4192’’ 

18 after ‘‘section 4191’’. 

19 (2) Section 6416(b)(2) of such Code is amend20 ed by inserting ‘‘or 4192’’ after ‘‘section 4191’’. 

21 (d) CLERICAL AMENDMENTS.— 

22 (1) The heading of subchapter E of chapter 32 

23 of the Internal Revenue Code of 1986 is amended by 

24 striking ‘‘Medical Devices’’ and inserting 

25 ‘‘Other Medical Products’’. 
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1 (2) The table of subchapters for chapter 32 of 

2 such Code is amended by striking the item relating 

3 to subchapter E and inserting the following new 

4 item: 

‘‘SUBCHAPTER E. OTHER MEDICAL PRODUCTS’’. 

5 (3) The table of sections for subchapter E of 

6 chapter 32 of such Code is amended by adding at 

7 the end the following new item: 

‘‘Sec. 4192. Selected drugs during noncompliance periods.’’. 

8 (e) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to sales after the date of the enact10 ment of this Act. 

11 SEC. 303. FAIR PRICE NEGOTIATION IMPLEMENTATION 

12 FUND. 

13 (a) IN GENERAL.—There is hereby established a Fair 

14 Price Negotiation Implementation Fund (referred to in 

15 this section as the ‘‘Fund’’). The Secretary of Health and 

16 Human Services may obligate and expend amounts in the 

17 Fund to carry out this title (and the amendments made 

18 by such title). 

19 (b) FUNDING.—There is authorized to be appro20 priated, and there is hereby appropriated, out of any mon21 ies in the Treasury not otherwise appropriated, to the 

22 Fund $3,000,000,000, to remain available until expended, 

23 of which— 
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1 (1) $600,000,000 shall become available on the 

2 date of the enactment of this Act; 

3 (2) $600,000,000 shall become available on Oc4 tober 1, 2020; 

5 (3) $600,000,000 shall become available on Oc6 tober 1, 2021; 

7 (4) $600,000,000 shall become available on Oc8 tober 1, 2022; and 

9 (5) $600,000,000 shall become available on Oc10 tober 1, 2023. 

11 (c) SUPPLEMENT NOT SUPPLANT.—Any amounts 

12 appropriated pursuant to this section shall be in addition 

13 to any other amounts otherwise appropriated pursuant to 

14 any other provision of law. 

15 TITLE IV—PUBLIC HEALTH 

16 INVESTMENTS 

17 SEC. 401. SUPPORTING INCREASED INNOVATION. 

18 (a) IN GENERAL.—The Secretary of Health and 

19 Human Services, acting through the Director of the Na20 tional Institutes of Health, shall continue to support and 

21 to expand, as applicable, biomedical research carried out 

22 through the National Institutes of Health innovation 

23 projects described in section 1001(b)(4) of the 21st Cen24 tury Cures Act (Public Law 114–255). The Secretary 

25 shall ensure that any such research (and related activities) 
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1 is conducted in compliance with section 492B of the Public 

2 Health Service Act (42 U.S.C. 289a–2) (relating to the 

3 inclusion of women and members of minority groups in 

4 research). 

5 (b) AUTHORIZATION OF APPROPRIATIONS.—To carry 

6 out this subsection, in addition to funds made available 

7 under paragraph (2) of section 1001(b) of the 21st Cen8 tury Cures Act (Public Law 114–255), there is authorized 

9 to be appropriated, and there is appropriated to the NIH 

10 Innovation Account established under such section 

11 1001(b), out of any moneys in the Treasury not otherwise 

12 obligated, $2,000,000,000 for fiscal year 2021, to remain 

13 available until expended. 

Passed the House of Representatives June 29, 2020. 

Attest: 

Clerk. 

116TH CONGRESS 

2D SESSION H. R. 1425 

AN ACT 

To amend the Patient Protection and Affordable 

dividual health insurance market. insurance payments to lower premiums in the inance Affordability Fund to provide for certain reCare Act to provide for a Improve Health Insur-