II 

Calendar No. 523 

116TH CONGRESS 

2D SESSION H. R. 1425 

IN THE SENATE OF THE UNITED STATES 

JUNE 30, 2020 

Received 

AUGUST 13, 2020 

Read the first time 

SEPTEMBER 8, 2020 

Read the second time and placed on the calendar 

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, 

3 SECTION 1. SHORT TITLE. 

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

5 Affordable Care Enhancement Act’’. 


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1 SEC. 2. TABLE OF CONTENTS. 

2 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. 

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. 


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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

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’’. 


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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)’’. 

20 SEC. 103. EXPANDING AFFORDABILITY FOR WORKING FAM21 ILIES TO FIX THE FAMILY GLITCH. 

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

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

24 as follows: 


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1 ‘‘(i) COVERAGE MUST BE AFFORD2 ABLE.— 

3 ‘‘(I) EMPLOYEES.—An employee 

4 shall not be treated as eligible for 

5 minimum essential coverage if such 

6 coverage consists of an eligible em7 ployer-sponsored plan (as defined in 

8 section 5000A(f)(2)) and the employ9 ee’s required contribution (within the 

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

11 with respect to the plan exceeds 9.5 

12 percent of the employee’s household 

13 income. 

14 ‘‘(II) FAMILY MEMBERS.—An in15 dividual who is eligible to enroll in an 

16 eligible employer-sponsored plan (as 

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

18 reason of a relationship the individual 

19 bears to the employee shall not be 

20 treated as eligible for minimum essen21 tial coverage by reason of such eligi22 bility to enroll if the employee’s re23 quired contribution (within the mean24 ing of section 5000A(e)(1)(B), deter25 mined by substituting ‘family’ for 


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1 ‘self-only’) with respect to the plan ex2 ceeds 9.5 percent of the employee’s 

3 household income.’’. 

4 (b) CONFORMING AMENDMENTS.— 

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

6 Internal Revenue Code of 1986 is amended by strik7 ing ‘‘Except as provided in clause (iii), an employee’’ 

8 and inserting ‘‘An individual’’. 

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

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

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

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

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

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

15 clauses (i)(I) and (i)(II)’’. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2021. 

19 SEC. 104. TAX CREDIT RECONCILIATION PROTECTIONS FOR 

20 INDIVIDUALS RECEIVING SOCIAL SECURITY 

21 LUMP-SUM PAYMENTS. 

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

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

24 the following new subparagraph: 


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1 ‘‘(C) EXCLUSION OF PORTION OF LUMP2 SUM SOCIAL SECURITY BENEFITS.— 

3 ‘‘(i) IN GENERAL.—The term ‘modi4 fied adjusted gross income’ shall not in5 clude so much of any lump-sum social se6 curity benefit payment as is attributable to 

7 months ending before the beginning of the 

8 taxable year. 

9 ‘‘(ii) LUMP-SUM SOCIAL SECURITY

10 BENEFIT PAYMENT.—For purposes of this 

11 subparagraph, the term ‘lump-sum social 

12 security benefit payment’ means any pay13 ment of social security benefits (as defined 

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

15 than 1 month of such benefits. 

16 ‘‘(iii) ELECTION TO INCLUDE EX17 CLUDABLE AMOUNT.—A taxpayer may 

18 elect (at such time and in such manner as 

19 the Secretary may provide) to have this 

20 subparagraph not apply for any taxable 

21 year.’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2019. 


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1 SEC. 105. PRESERVING STATE OPTION TO IMPLEMENT 

2 HEALTH CARE MARKETPLACES. 

3 (a) IN GENERAL.—Section 1311 of the Patient Pro4 tection and Affordable Care Act (42 U.S.C. 18031) is 

5 amended— 

6 (1) in subsection (a)— 

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

8 ‘‘under this subsection’’ and inserting ‘‘under 

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

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

11 paragraph: 

12 ‘‘(6) ADDITIONAL PLANNING AND ESTABLISH13 MENT GRANTS.— 

14 ‘‘(A) IN GENERAL.—There shall be appro15 priated to the Secretary, out of any moneys in 

16 the Treasury not otherwise appropriated, $200 

17 million to award grants to eligible States for 

18 the uses described in paragraph (3). 

19 ‘‘(B) DURATION AND RENEWABILITY.—A 

20 grant awarded under subparagraph (A) shall be 

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

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

23 awarded under subparagraph (A) after Decem24 ber 31, 2023. 

25 ‘‘(D) ELIGIBLE STATE DEFINED.—For 

26 purposes of this paragraph, the term ‘eligible 


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

2 enactment of this paragraph, is not operating 

3 an Exchange (other than an Exchange de4 scribed in section 155.200(f) of title 45, Code 

5 of Federal Regulations).’’; and 

6 (2) in subsection (d)(5)(A)— 

7 (A) by striking ‘‘OPERATIONS.—In estab8 lishing an Exchange under this section’’ and in9 serting ‘‘OPERATIONS.— 

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

11 Exchange under this section (other than in 

12 establishing an Exchange pursuant to a 

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

14 and 

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

16 ‘‘(ii) ADDITIONAL PLANNING AND ES17 TABLISHMENT GRANTS.—In establishing 

18 an Exchange pursuant to a grant awarded 

19 under subsection (a)(6), the State shall en20 sure that such Exchange is self-sustaining 

21 beginning on January 1, 2025, including 

22 allowing the Exchange to charge assess23 ments or user fees to participating health 

24 insurance issuers, or to otherwise generate 

25 funding, to support its operations.’’. 


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1 (b) CLARIFICATION REGARDING FAILURE TO ESTAB2 LISH EXCHANGE OR IMPLEMENT REQUIREMENTS.—Sec3 tion 1321(c) of the Patient Protection and Affordable 

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

5 (1) in paragraph (1), by striking ‘‘If’’ and in6 serting ‘‘Subject to paragraph (3), if’’; and 

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

8 paragraph: 

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

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

11 the requirements described in subsection (a) and 

12 satisfies the requirement described in subsection (b) 

13 on or after January 1, 2014.’’. 

14 SEC. 106. ESTABLISHING A HEALTH INSURANCE AFFORD15 ABILITY FUND. 

16 Subtitle D of title I of the Patient Protection and 

17 Affordable Care Act is amended by inserting after part 

18 5 (42 U.S.C. 18061 et seq.) the following new part: 

19 ‘‘PART 6—IMPROVE HEALTH INSURANCE 

20 AFFORDABILITY FUND 

21 ‘‘SEC. 1351. ESTABLISHMENT OF PROGRAM. 

22 ‘‘There is hereby established the ‘Improve Health In23 surance Affordability Fund’ to be administered by the Sec24 retary of Health and Human Services, acting through the 

25 Administrator of the Centers for Medicare & Medicaid 


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1 Services (in this section referred to as the ‘Adminis2 trator’), to provide funding, in accordance with this part, 

3 to the 50 States and the District of Columbia (each re4 ferred to in this section as a ‘State’) beginning on January 

5 1, 2022, for the purposes described in section 1352. 

6 ‘‘SEC. 1352. USE OF FUNDS. 

7 ‘‘(a) IN GENERAL.—A State shall use the funds allo8 cated to the State under this part for one of the following 

9 purposes: 

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

11 insurance issuers with respect to individuals enrolled 

12 under individual health insurance coverage (other 

13 than through a plan described in subsection (b)) of14 fered by such issuers. 

15 ‘‘(2) To provide assistance (other than through 

16 payments described in paragraph (1)) to reduce out17 of-pocket costs, such as copayments, coinsurance, 

18 premiums, and deductibles, of individuals enrolled 

19 under qualified health plans offered on the indi20 vidual market through an Exchange. 

21 ‘‘(b) EXCLUSION OF CERTAIN GRANDFATHERED AND

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

23 a plan described in this subsection is the following: 

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

25 section 1251). 


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1 ‘‘(2) A plan (commonly referred to as a ‘transi2 tional plan’) continued under the letter issued by the 

3 Centers for Medicare & Medicaid Services on No4 vember 14, 2013, to the State Insurance Commis5 sioners outlining a transitional policy for coverage in 

6 the individual and small group markets to which sec7 tion 1251 does not apply, and under the extension 

8 of the transitional policy for such coverage set forth 

9 in the Insurance Standards Bulletin Series guidance 

10 issued by the Centers for Medicare & Medicaid Serv11 ices on March 5, 2014, February 29, 2016, Feb12 ruary 13, 2017, April 9, 2018, March 25, 2019, and 

13 January 31, 2020, or under any subsequent exten14 sions thereof. 

15 ‘‘(3) Student health insurance coverage (as de16 fined in section 147.145 of title 45, Code of Federal 

17 Regulations). 

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

19 SAFEGUARD. 

20 ‘‘(a) ENCOURAGING STATE OPTIONS FOR ALLOCA21 TIONS.— 

22 ‘‘(1) IN GENERAL.—To be eligible for an alloca23 tion of funds under this part for a year (beginning 

24 with 2022), a State shall submit to the Adminis25 trator an application at such time (but, in the case 


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

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

3 case of allocations for a subsequent year, not later 

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

5 and manner as specified by the Administrator con6 taining— 

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

8 used; and 

9 ‘‘(B) such other information as the Admin10 istrator may require. 

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

12 submitted is approved unless the Administrator noti13 fies the State submitting the application, not later 

14 than 60 days after the date of the submission of 

15 such application, that the application has been de16 nied for not being in compliance with any require17 ment of this part and of the reason for such denial. 

18 ‘‘(3) 5-YEAR APPLICATION APPROVAL.—If an 

19 application of a State is approved for a purpose de20 scribed in section 1352 for a year, such application 

21 shall be treated as approved for such purpose for 

22 each of the subsequent 4 years. 

23 ‘‘(4) REVOCATION OF APPROVAL.—The ap24 proval of an application of a State, with respect to 

25 a purpose described in section 1352, may be revoked 


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

2 under this section for such purpose or otherwise fails 

3 to comply with the requirements of this section. 

4 ‘‘(b) DEFAULT FEDERAL SAFEGUARD.— 

5 ‘‘(1) 2022.—For 2022, in the case of a State 

6 that does not submit an application under subsection 

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

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

9 State that does submit such an application by such 

10 date that is not approved, the Administrator, in con11 sultation with the State insurance commissioner, 

12 shall, from the amount calculated under paragraph 

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

14 paragraph (3) in such State for such year. 

15 ‘‘(2) 2023 AND SUBSEQUENT YEARS.—For 

16 2023 or a subsequent year, in the case of a State 

17 that does not have in effect an approved application 

18 under this section for such year, the Administrator, 

19 in consultation with the State insurance commis20 sioner, shall, from the amount calculated under 

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

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

23 year. 

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

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1 quent year, shall be used to carry out the purpose 

2 described in section 1352(a)(1) in each State de3 scribed in paragraph (1) or (2) for such year, as ap4 plicable, by providing reinsurance payments to 

5 health insurance issuers with respect to attachment 

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

7 using the dollar amounts specified in subparagraph 

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

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

10 (specified for such year by the Secretary under such 

11 subparagraph) of the amount of such claims. 

12 ‘‘(4) AMOUNT DESCRIBED.—The amount de13 scribed in this paragraph, with respect to 2022 or 

14 a subsequent year, is the amount equal to the total 

15 sum of amounts that the Secretary would otherwise 

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

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

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

19 were not so described for such year. 

20 ‘‘(5) ADJUSTMENT.—For purposes of this sub21 section, the Secretary may apply a percentage under 

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

23 than the percentage otherwise specified in section 

24 1354(b)(2)(B) for such year, if the cost of paying 

25 the total eligible attachment range claims for States 


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1 described in this subsection for such year at such 

2 percentage otherwise specified would exceed the 

3 amount calculated under paragraph (4) for such 

4 year. 

5 ‘‘SEC. 1354. ALLOCATIONS. 

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

7 allocations for States under subsection (b) and payments 

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

9 money in the Treasury not otherwise appropriated, 

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

11 ‘‘(b) ALLOCATIONS.— 

12 ‘‘(1) PAYMENT.— 

13 ‘‘(A) IN GENERAL.—From amounts appro14 priated under subsection (a) for a year, the 

15 Secretary shall, with respect to a State not de16 scribed in section 1353(b) for such year and 

17 not later than the date specified under subpara18 graph (B) for such year, allocate for such State 

19 the amount determined for such State and year 

20 under paragraph (2). 

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

22 subparagraph (A), the date specified in this 

23 subparagraph is— 


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

2 after the date of the enactment of this 

3 part; and 

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

5 January 1 of the respective year. 

6 ‘‘(C) NOTIFICATIONS OF ALLOCATION

7 AMOUNTS.—For 2023 and each subsequent 

8 year, the Secretary shall notify each State of 

9 the amount determined for such State under 

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

11 January 1 of the previous year. 

12 ‘‘(2) ALLOCATION AMOUNT DETERMINA13 TIONS.— 

14 ‘‘(A) IN GENERAL.—For purposes of para15 graph (1), the amount determined under this 

16 paragraph for a year for a State described in 

17 paragraph (1)(A) for such year is the amount 

18 equal to— 

19 ‘‘(i) the amount that the Secretary es20 timates would be expended under this part 

21 for such year on attachment range claims 

22 of individuals residing in such State if such 

23 State used such funds only for the purpose 

24 described in paragraph (1) of section 

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1 centage specified under subparagraph (B) 

2 for such year; minus 

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

4 Secretary determines— 

5 ‘‘(I) the estimated amount of 

6 premium tax credits under section 

7 36B of the Internal Revenue Code of 

8 1986 that would be attributable to in9 dividuals residing in such State for 

10 such year without application of this 

11 part; exceeds 

12 ‘‘(II) the estimated amount of 

13 premium tax credits under section 

14 36B of the Internal Revenue Code of 

15 1986 that would be attributable to in16 dividuals residing in such State for 

17 such year if such State were a State 

18 described in section 1353(b) for such 

19 year. 

20 For purposes of the previous sentence and sec21 tion 1353(b)(3), the term ‘attachment range 

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

23 claims for such individual that exceed a dollar 

24 amount specified by the Secretary for a year, 

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1 fied by the Secretary for such year, under sub2 paragraph (B). 

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

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

5 Secretary shall determine the dollar amounts 

6 and the percentage to be specified under this 

7 subparagraph for a year in a manner to ensure 

8 that the total amount of expenditures under 

9 this part for such year is estimated to equal the 

10 total amount appropriated for such year under 

11 subsection (a) if such expenditures were used 

12 solely for the purpose described in paragraph 

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

14 claims at the dollar amounts and percentage so 

15 specified for such year. 

16 ‘‘(3) AVAILABILITY.—Funds allocated to a 

17 State under this subsection for a year shall remain 

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

19 SEC. 107. RESCINDING THE SHORT-TERM LIMITED DURA20 TION INSURANCE REGULATION. 

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

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

23 issued a final rule entitled ‘‘Short-Term, Limited24 Duration Insurance’’ (83 Fed. Reg. 38212). 


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1 (2) The final rule dramatically expands the sale 

2 and marketing of insurance that— 

3 (A) may discriminate against individuals 

4 living with preexisting health conditions, includ5 ing children with complex medical needs and 

6 disabilities and their families; 

7 (B) lacks important financial protections 

8 provided by the Patient Protection and Afford9 able Care Act (Public Law 111–148), including 

10 the prohibition of annual and lifetime coverage 

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

12 increase the cost of treatment and cause finan13 cial hardship to those requiring medical care, 

14 including children with complex medical needs 

15 and disabilities and their families; and 

16 (C) excludes coverage of essential health 

17 benefits including hospitalization, prescription 

18 drugs, and other lifesaving care. 

19 (3) The implementation and enforcement of the 

20 final rule weakens critical protections for up to 130 

21 million Americans living with preexisting health con22 ditions and may place a large financial burden on 

23 those who enroll in short-term limited-duration in24 surance, which jeopardizes Americans’ access to 

25 quality, affordable health insurance. 


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

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

3 Secretary of Labor— 

4 (1) may not take any action to implement, en5 force, or otherwise give effect to the rule entitled 

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

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

8 (2) shall apply any regulation revised by such 

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

10 (3) may not promulgate any substantially simi11 lar rule. 

12 SEC. 108. REVOKING SECTION 1332 GUIDANCE. 

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

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

15 published new guidance to carry out section 1332 of 

16 the Patient Protection and Affordable Care Act (42 

17 U.S.C. 18052) entitled ‘‘State Relief and Empower18 ment Waivers’’ (83 Fed. Reg. 53575). 

19 (2) The new guidance encourages States to pro20 vide health insurance coverage through insurance 

21 plans that may discriminate against individuals with 

22 preexisting health conditions, including the one in 

23 four Americans living with a disability. 

24 (3) The implementation and enforcement of the 

25 new guidance weakens protections for the millions of 


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1 Americans living with preexisting health conditions 

2 and jeopardizes Americans’ access to quality, afford3 able health insurance coverage. 

4 (b) PROVIDING THAT CERTAIN GUIDANCE RELATED

5 TO WAIVERS FOR STATE INNOVATION UNDER THE PA6 TIENT PROTECTION AND AFFORDABLE CARE ACT SHALL

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

8 the Secretary of Health and Human Services and the Sec9 retary of the Treasury may not take any action to imple10 ment, enforce, or otherwise give effect to the guidance en11 titled ‘‘State Relief and Empowerment Waivers’’ (83 Fed. 

12 Reg. 53575 (October 24, 2018)), including any such ac13 tion that would result in individuals losing health insur14 ance coverage that includes the essential health benefits 

15 package (as defined in subsection (a) of section 1302 of 

16 the Patient Protection and Affordable Care Act (42 

17 U.S.C. 18022(a)) without regard to any waiver of any pro18 vision of such package under a waiver under such section 

19 1332), including the maternity and newborn care essential 

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

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

22 decrease in the number of such individuals enrolled in cov23 erage that is at least as comprehensive as the coverage 

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

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


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1 the number of such individuals who would have been so 

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

3 including any such action that would, with respect to indi4 viduals with substance use disorders, including opioid use 

5 disorders, reduce the availability or affordability of cov6 erage that is at least as comprehensive as the coverage 

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

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

9 the availability or affordability, respectively, of such cov10 erage had such action not been taken, including any such 

11 action that would result, with respect to vulnerable popu12 lations (including low-income individuals, elderly individ13 uals, and individuals with serious health issues or who 

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

15 in a decrease in the availability of coverage that is at least 

16 as comprehensive as the coverage defined in section 

17 1302(a) of the Patient Protection and Affordable Care Act 

18 (42 U.S.C. 18022(a)) with coverage and cost sharing pro19 tections required under section 1332(b)(1)(B) of such Act 

20 (42 U.S.C. 18052(b)(1)(B)), including any such action 

21 that would, with respect to individuals with preexisting 

22 conditions, reduce the affordability of coverage that is at 

23 least as comprehensive as the coverage defined in section 

24 1302(a) of the Patient Protection and Affordable Care Act 

25 (42 U.S.C. 18022(a)) compared to the affordability of 


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1 such coverage had such action not been taken, including 

2 any such action that would result in higher health insur3 ance premiums for individuals enrolled in health insurance 

4 coverage that is at least as comprehensive as the coverage 

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

6 18022(b)), and the Secretaries may not promulgate any 

7 substantially similar guidance or rule. Nothing in the pre8 vious sentence shall be construed to affect the approval 

9 of waivers under section 1332 of the Patient Protection 

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

11 reinsurance programs that are consistent with the require12 ments under subsection (b)(1) of such section (42 U.S.C. 

13 18052(b)(1)), lower health insurance premiums, and pro14 tect health insurance coverage for people with preexisting 

15 conditions. 

16 (c) GAO REPORT ON AFFECT OF STATE INNOVATION

17 WAIVERS ON COVERAGE OF INDIVIDUALS AND ON MEN18 TAL HEALTH HEALTH CARE TREATMENT.—Not later 

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

20 the Comptroller General of the United States shall submit 

21 to Congress a report on the number of individuals ex22 pected to lose access to health insurance coverage (as de23 fined in section 2791 of the Public Health Service Act (42 

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

25 waivers under section 1332 of the Patient Protection and 


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

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

3 report shall include an analysis of the expected effect such 

4 waivers approved under such guidance would have on men5 tal health care treatment. 

6 SEC. 109. REQUIRING MARKETPLACE OUTREACH, EDU7 CATIONAL ACTIVITIES, AND ANNUAL EN8 ROLLMENT TARGETS. 

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

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

11 as amended by section 105(b), is further amended by add12 ing at the end the following new paragraphs: 

13 ‘‘(4) OUTREACH AND EDUCATIONAL ACTIVI14 TIES.— 

15 ‘‘(A) IN GENERAL.—In the case of an Ex16 change established or operated by the Secretary 

17 within a State pursuant to this subsection, the 

18 Secretary shall carry out outreach and edu19 cational activities for purposes of informing in20 dividuals about qualified health plans offered 

21 through the Exchange, including by informing 

22 such individuals of the availability of coverage 

23 under such plans and financial assistance for 

24 coverage under such plans. Such outreach and 

25 educational activities shall be provided in a 


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1 manner that is culturally and linguistically ap2 propriate to the needs of the populations being 

3 served by the Exchange (including hard-to4 reach populations, such as racial and sexual mi5 norities, limited English proficient populations, 

6 individuals in rural areas, veterans, and young 

7 adults) and shall be provided to populations re8 siding in high health disparity areas (as defined 

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

10 in addition to other populations served by the 

11 Exchange. 

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

13 funds appropriated under this paragraph shall 

14 be used for expenditures for promoting non15 ACA compliant health insurance coverage. 

16 ‘‘(C) NON-ACA COMPLIANT HEALTH INSUR17 ANCE COVERAGE.—For purposes of subpara18 graph (B): 

19 ‘‘(i) The term ‘non-ACA compliant 

20 health insurance coverage’ means health 

21 insurance coverage, or a group health plan, 

22 that is not a qualified health plan. 

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

24 ‘‘(I) An association health plan. 


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1 ‘‘(II) Short-term limited duration 

2 insurance. 

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

4 Treasury not otherwise appropriated, there are 

5 hereby appropriated for fiscal year 2022 and 

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

7 carry out this paragraph. Funds appropriated 

8 under this subparagraph shall remain available 

9 until expended. 

10 ‘‘(E) HIGH HEALTH DISPARITY AREA DE11 FINED.—For purposes of subparagraph (A), the 

12 term ‘high health disparity area’ means a con13 tiguous geographic area that— 

14 ‘‘(i) is located in one census tract or 

15 ZIP code; 

16 ‘‘(ii) has measurable and documented 

17 racial, ethnic, or geographic health dispari18 ties; 

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

20 demonstrated by— 

21 ‘‘(I) average income below 138 

22 percent of the Federal poverty line; or 

23 ‘‘(II) a rate of participation in 

24 the special supplemental nutrition 

25 program under section 17 of the Child 


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

2 1786) that is higher than the national 

3 average rate of participation in such 

4 program; 

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

6 demonstrated by— 

7 ‘‘(I) lower life expectancy than 

8 the national average; or 

9 ‘‘(II) a higher percentage of in10 stances of low birth weight than the 

11 national average; and 

12 ‘‘(v) is part of a Metropolitan Statis13 tical Area identified by the Office of Man14 agement and Budget. 

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

16 plan year 2021 and each subsequent plan year, in 

17 the case of an Exchange established or operated by 

18 the Secretary within a State pursuant to this sub19 section, the Secretary shall establish annual enroll20 ment targets for such Exchange for such year.’’. 

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

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

23 of Health and Human Services shall release to Congress 

24 all aggregated documents relating to studies and data sets 

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


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1 to marketing and outreach with respect to qualified health 

2 plans offered through Exchanges under title I of the Pa3 tient Protection and Affordable Care Act (42 U.S.C. 

4 18001 et seq.). 

5 SEC. 110. REPORT ON EFFECTS OF WEBSITE MAINTENANCE 

6 DURING OPEN ENROLLMENT. 

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

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

9 shall submit to Congress a report examining whether the 

10 Department of Health and Human Services has been con11 ducting maintenance on the website commonly referred to 

12 as ‘‘Healthcare.gov’’ during annual open enrollment peri13 ods (as described in section 1311(c)(6)(B) of the Patient 

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

15 18031(c)(6)(B)) in such a manner so as to minimize any 

16 disruption to the use of such website resulting from such 

17 maintenance. 

18 SEC. 111. PROMOTING CONSUMER OUTREACH AND EDU19 CATION. 

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

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

22 is amended— 

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

24 following new subparagraph: 


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

2 case of an Exchange established and operated 

3 by the Secretary within a State pursuant to sec4 tion 1321(c), in awarding grants under para5 graph (1), the Exchange shall— 

6 ‘‘(i) select entities to receive such 

7 grants based on an entity’s demonstrated 

8 capacity to carry out each of the duties 

9 specified in paragraph (3); 

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

11 not the entity has demonstrated how the 

12 entity will provide information to individ13 uals relating to group health plans offered 

14 by a group or association of employers de15 scribed in section 2510.3–5(b) of title 29, 

16 Code of Federal Regulations (or any suc17 cessor regulation), or short-term limited 

18 duration insurance (as defined by the Sec19 retary for purposes of section 2791(b)(5) 

20 of the Public Health Service Act); and 

21 ‘‘(iii) ensure that, each year, the Ex22 change awards such a grant to— 

23 ‘‘(I) at least one entity described 

24 in this paragraph that is a community 


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1 and consumer-focused nonprofit 

2 group; and 

3 ‘‘(II) at least one entity described 

4 in subparagraph (B), which may in5 clude another community and con6 sumer-focused nonprofit group in ad7 dition to any such group awarded a 

8 grant pursuant to subclause (I). 

9 In awarding such grants, an Exchange may 

10 consider an entity’s record with respect to 

11 waste, fraud, and abuse for purposes of main12 taining the integrity of such Exchange.’’; 

13 (2) in paragraph (3)— 

14 (A) by amending subparagraph (C) to read 

15 as follows: 

16 ‘‘(C) facilitate enrollment, including with 

17 respect to individuals with limited English pro18 ficiency and individuals with chronic illnesses, 

19 in qualified health plans, State medicaid plans 

20 under title XIX of the Social Security Act, and 

21 State child health plans under title XXI of such 

22 Act;’’; 

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

24 ‘‘and’’ at the end; 


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

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

3 (D) by inserting after subparagraph (E) 

4 the following new subparagraph: 

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

6 organizations that address social needs related 

7 to health outcomes.’’; and 

8 (E) by adding at the end the following 

9 flush left sentence: 

10 ‘‘The duties specified in the preceding sentence may 

11 be carried out by such a navigator at any time dur12 ing a year.’’; 

13 (3) in paragraph (4)(A)— 

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

15 striking ‘‘not’’; 

16 (B) in clause (i)— 

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

18 and 

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

20 semicolon; 

21 (C) in clause (ii)— 

22 (i) by inserting ‘‘not’’ before ‘‘re23 ceive’’; and 

24 (ii) by striking the period and insert25 ing a semicolon; and 


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

2 clauses: 

3 ‘‘(iii) maintain physical presence in 

4 the State of the Exchange so as to allow 

5 in-person assistance to consumers; and 

6 ‘‘(iv) receive opioid specific education 

7 and training that ensures the navigator 

8 can best educate individuals on qualified 

9 health plans offered through an Exchange, 

10 specifically coverage under such plans for 

11 opioid health care treatment.’’; and 

12 (4) in paragraph (6)— 

13 (A) by striking ‘‘FUNDING.—Grants 

14 under’’ and inserting ‘‘FUNDING.— 

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

16 and 

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

18 subparagraph: 

19 ‘‘(B) FEDERAL EXCHANGES.—For pur20 poses of carrying out this subsection, with re21 spect to an Exchange established and operated 

22 by the Secretary within a State pursuant to sec23 tion 1321(c), the Secretary shall obligate 

24 $100,000,000 out of amounts collected through 

25 the user fees on participating health insurance 


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1 issuers pursuant to section 156.50 of title 45, 

2 Code of Federal Regulations (or any successor 

3 regulations), for fiscal year 2022 and each sub4 sequent fiscal year. Such amount for a fiscal 

5 year shall remain available until expended.’’. 

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

7 this section shall apply with respect to plan years begin8 ning on or after January 1, 2021. 

9 SEC. 112. IMPROVING TRANSPARENCY AND ACCOUNT10 ABILITY IN THE MARKETPLACE. 

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

12 2021 and each subsequent year, the Secretary of Health 

13 and Human Services (referred to in this section as the 

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

15 Treasury and the Secretary of Labor, shall issue biweekly 

16 public reports during the annual open enrollment period 

17 on the performance of the federally facilitated Exchange 

18 operated pursuant to section 1321(c) of the Patient Pro19 tection and Affordable Care Act (42 U.S.C. 18041(c)). 

20 Each such report shall include a summary, including in21 formation on a State-by-State basis where available, of— 

22 (1) the number of unique website visits; 

23 (2) the number of individuals who create an ac24 count; 

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


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1 (4) the average wait time for callers contacting 

2 the call center; 

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

4 qualified health plan; and 

5 (6) the percentage of individuals who enroll in 

6 a qualified health plan through each of— 

7 (A) the website; 

8 (B) the call center; 

9 (C) navigators; 

10 (D) agents and brokers; 

11 (E) the enrollment assistant program; 

12 (F) directly from issuers or web brokers; 

13 and 

14 (G) other means. 

15 (b) OPEN ENROLLMENT AFTER ACTION REPORT.— 

16 For plan year 2021 and each subsequent year, the Sec17 retary, in coordination with the Secretary of the Treasury 

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

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

20 annual open enrollment period regarding the performance 

21 of the Exchange described in subsection (a) for the appli22 cable plan year. Each such report shall include a sum23 mary, including information on a State-by-State basis 

24 where available, of— 


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1 (1) the open enrollment data reported under 

2 subsection (a) for the entirety of the enrollment pe3 riod; and 

4 (2) activities related to patient navigators de5 scribed in section 1311(i) of the Patient Protection 

6 and Affordable Care Act (42 U.S.C. 18031(i)), in7 cluding— 

8 (A) the performance objectives established 

9 by the Secretary for such patient navigators; 

10 (B) the number of consumers enrolled by 

11 such a patient navigator; 

12 (C) an assessment of how such patient 

13 navigators have met established performance 

14 metrics, including a detailed list of all patient 

15 navigators, funding received by patient naviga16 tors, and whether established performance ob17 jectives of patient navigators were met; and 

18 (D) with respect to the performance objec19 tives described in subparagraph (A)— 

20 (i) whether such objectives assess the 

21 full scope of patient navigator responsibil22 ities, including general education, plan se23 lection, and determination of eligibility for 

24 tax credits, cost-sharing reductions, or 

25 other coverage; 


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1 (ii) how the Secretary worked with pa2 tient navigators to establish such objec3 tives; and 

4 (iii) how the Secretary adjusted such 

5 objectives for case complexity and other 

6 contextual factors. 

7 (c) REPORT ON ADVERTISING AND CONSUMER OUT8 REACH.—Not later than 3 months after the completion of 

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

10 Secretary shall issue a report on advertising and outreach 

11 to consumers for the open enrollment period for plan year 

12 2021. Such report shall include a description of— 

13 (1) the division of spending on individual adver14 tising platforms, including television and radio ad15 vertisements and digital media, to raise consumer 

16 awareness of open enrollment; 

17 (2) the division of spending on individual out18 reach platforms, including email and text messages, 

19 to raise consumer awareness of open enrollment; and 

20 (3) whether the Secretary conducted targeted 

21 outreach to specific demographic groups and geo22 graphic areas. 

23 (b) PROMOTING TRANSPARENCY AND ACCOUNT24 ABILITY IN THE ADMINISTRATION’S EXPENDITURES OF

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


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

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

3 Health and Human Services shall submit to the appro4 priate committees of Congress and make available to the 

5 public an annual report on the expenditures by the De6 partment of Health and Human Services of user fees col7 lected pursuant to section 156.50 of title 45, Code of Fed8 eral Regulations (or any successor regulations). Each such 

9 report for a plan year shall include a detailed accounting 

10 of the amount of such user fees collected during such plan 

11 year and of the amount of such expenditures used during 

12 such plan year for the federally facilitated Exchange oper13 ated pursuant to section 1321(c) of the Patient Protection 

14 and Affordable Care Act (42 U.S.C. 18041(c)) on out15 reach and enrollment activities, navigators, maintenance 

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

17 SEC. 113. IMPROVING AWARENESS OF HEALTH COVERAGE 

18 OPTIONS. 

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

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

21 in consultation with the Secretary of Health and Human 

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

23 prominent location on the website of the Department of 

24 Labor, the model Consolidated Omnibus Budget Reconcili25 ation Act of 1985 (referred to in this section as 


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

2 model COBRA continuation coverage election notice devel3 oped by the Secretary of Labor for purposes of facilitating 

4 compliance of group health plans with the notification re5 quirements under section 606 of the Employee Retirement 

6 Income Security Act of 1974 (29 U.S.C. 1166). In updat7 ing each such notice, the Secretary of Labor shall include 

8 information regarding any Exchange established under 

9 title I of the Patient Protection and Affordable Care Act 

10 (42 U.S.C. 18001 et seq.) through which a qualified bene11 ficiary may be eligible to enroll in a qualified health plan, 

12 including— 

13 (1) the publicly accessible Internet website ad14 dress for such Exchange; 

15 (2) the publicly accessible Internet website ad16 dress for the Find Local Help directory maintained 

17 by the Department of Health and Human Services 

18 on the healthcare.gov Internet website (or a suc19 cessor website); 

20 (3) a clear explanation that— 

21 (A) an individual who is eligible for con22 tinuation coverage may also be eligible to enroll, 

23 with financial assistance, in a qualified health 

24 plan offered through such Exchange, but, in the 

25 case that such individual elects to enroll in such 


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1 continuation coverage and subsequently elects 

2 to terminate such continuation coverage before 

3 the period of such continuation coverage ex4 pires, such individual will not be eligible to en5 roll in a qualified health plan offered through 

6 such Exchange during a special enrollment pe7 riod; and 

8 (B) an individual who elects to enroll in 

9 continuation coverage will remain eligible to en10 roll in a qualified health plan offered through 

11 such Exchange during an open enrollment pe12 riod and may be eligible for financial assistance 

13 with respect to enrolling in such a qualified 

14 health plan; 

15 (4) information on consumer protections with 

16 respect to enrolling in a qualified health plan offered 

17 through such Exchange, including the requirement 

18 for such a qualified health plan to provide coverage 

19 for essential health benefits (as defined in section 

20 1302(b) of such Act (42 U.S.C. 18022(b)) and the 

21 requirements applicable to such a qualified health 

22 plan under part A of title XXVII of the Public 

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

24 (5) information on the availability of financial 

25 assistance with respect to enrolling in a qualified 


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1 health plan, including the maximum income limit for 

2 eligibility for a premium tax credit under section 

3 36B of the Internal Revenue Code of 1986. 

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

5 model COBRA continuation coverage general notice and 

6 the model COBRA continuation coverage election notice 

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

8 each such notice as the ‘‘model COBRA continuation cov9 erage and Affordable Care Act coverage general notice’’ 

10 and the ‘‘model COBRA continuation coverage and Af11 fordable Care Act coverage election notice’’, respectively. 

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

13 available the model COBRA continuation coverage general 

14 notice and the model COBRA continuation coverage elec15 tion notice updated under paragraph (1), the Secretary 

16 of Labor shall provide an opportunity for consumer testing 

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

18 such notice is clear and understandable to the average 

19 participant or beneficiary of a group health plan. 

20 (d) DEFINITIONS.—In this subsection: 

21 (1) CONTINUATION COVERAGE.—The term 

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

23 health plan, has the meaning given such term in sec24 tion 602 of the Employee Retirement Income Secu25 rity Act of 1974 (29 U.S.C. 1162). 


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

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

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

4 (3) QUALIFIED BENEFICIARY.—The term 

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

6 term in such section 607. 

7 (4) QUALIFIED HEALTH PLAN.—The term 

8 ‘‘qualified health plan’’ has the meaning given such 

9 term in section 1301 of the Patient Protection and 

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

11 SEC. 114. PROMOTING STATE INNOVATIONS TO EXPAND 

12 COVERAGE. 

13 (a) IN GENERAL.—Subject to subsection (d), the Sec14 retary of Health and Human Services shall award grants 

15 to eligible State agencies to enable such States to explore 

16 innovative solutions to promote greater enrollment in 

17 health insurance coverage in the individual and small 

18 group markets, including activities described in subsection 

19 (c). 

20 (b) ELIGIBILITY.—For purposes of subsection (a), el21 igible State agencies are Exchanges established by a State 

22 under title I of the Patient Protection and Affordable Care 

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

24 primary responsibility over health and human services for 

25 the State involved. 


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

2 the activities described in this subsection are the following: 

3 (1) State efforts to streamline health insurance 

4 enrollment procedures in order to reduce burdens on 

5 consumers and facilitate greater enrollment in health 

6 insurance coverage in the individual and small group 

7 markets, including automatic enrollment and re8 enrollment of, or pre-populated applications for, in9 dividuals without health insurance who are eligible 

10 for tax credits under section 36B of the Internal 

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

12 of such enrollment. 

13 (2) State investment in technology to improve 

14 data sharing and collection for the purposes of facili15 tating greater enrollment in health insurance cov16 erage in such markets. 

17 (3) Implementation of a State version of an in18 dividual mandate to be enrolled in health insurance 

19 coverage. 

20 (4) Feasibility studies to develop comprehensive 

21 and coherent State plan for increasing enrollment in 

22 the individual and small group market. 

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

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

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


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

2 amount shall remain available until expended. 

3 SEC. 115. STRENGTHENING NETWORK ADEQUACY. 

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

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

6 is amended by adding at the end the following new para7 graph: 

8 ‘‘(8) NETWORK ADEQUACY STANDARDS.— 

9 ‘‘(A) CERTAIN EXCHANGES.—In the case 

10 of an Exchange operated by the Secretary pur11 suant section 1321(c)(1) or an Exchange de12 scribed in section 155.200(f) of title 42, Code 

13 of Federal Regulations (or a successor regula14 tion), the Exchange shall require each qualified 

15 health plan offered through such Exchange to 

16 meet such quantitative network adequacy stand17 ards as the Secretary may prescribe for pur18 poses of this subparagraph. 

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

20 an Exchange not described in subparagraph 

21 (A), the Exchange shall establish quantitative 

22 network adequacy standards with respect to 

23 qualified health plans offered through such Ex24 change and require such plans to meet such 

25 standards.’’. 


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

2 this section shall apply with respect to plan years begin3 ning on or after January 1, 2022. 

4 SEC. 116. PROTECTING CONSUMERS FROM UNREASONABLE 

5 RATE HIKES. 

6 (a) PROTECTION FROM EXCESSIVE, UNJUSTIFIED, 

7 OR UNFAIRLY DISCRIMINATORY RATES.—The first sec8 tion 2794 of the Public Health Service Act (42 U.S.C. 

9 300gg–94), as added by section 1003 of the Patient Pro10 tection and Affordable Care Act (Public Law 111–148), 

11 is amended by adding at the end the following new sub12 section: 

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

14 OR UNFAIRLY DISCRIMINATORY RATES.— 

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

16 section shall be construed to prohibit a State from 

17 imposing requirements (including requirements re18 lating to rate review standards and procedures and 

19 information reporting) on health insurance issuers 

20 with respect to rates that are in addition to the re21 quirements of this section and are more protective of 

22 consumers than such requirements. 

23 ‘‘(2) CONSULTATION IN RATE REVIEW PROC24 ESS.—In carrying out this section, the Secretary 


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1 shall consult with the National Association of Insur2 ance Commissioners and consumer groups. 

3 ‘‘(3) DETERMINATION OF WHO CONDUCTS RE4 VIEWS FOR EACH STATE.—The Secretary shall de5 termine, after the date of enactment of this section 

6 and periodically thereafter, the following: 

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

8 State insurance commissioner or relevant State 

9 regulator shall undertake the corrective actions 

10 under paragraph (4), based on the Secretary’s 

11 determination that the State regulator is ade12 quately undertaking and utilizing such actions 

13 in that market. 

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

15 Secretary shall undertake the corrective actions 

16 under paragraph (4), in cooperation with the 

17 relevant State insurance commissioner or State 

18 regulator, based on the Secretary’s determina19 tion that the State is not adequately under20 taking and utilizing such actions in that mar21 ket. 

22 ‘‘(4) CORRECTIVE ACTION FOR EXCESSIVE, UN23 JUSTIFIED, OR UNFAIRLY DISCRIMINATORY

24 RATES.—In accordance with the process established 

25 under this section, the Secretary or the relevant 


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1 State insurance commissioner or State regulator 

2 shall take corrective actions to ensure that any ex3 cessive, unjustified, or unfairly discriminatory rates 

4 are corrected prior to implementation, or as soon as 

5 possible thereafter, through mechanisms such as— 

6 ‘‘(A) denying rates; 

7 ‘‘(B) modifying rates; or 

8 ‘‘(C) requiring rebates to consumers. 

9 ‘‘(5) NONCOMPLIANCE.—Failure to comply with 

10 any corrective action taken by the Secretary under 

11 this subsection may result in the application of civil 

12 monetary penalties under section 2723 and, if the 

13 Secretary determines appropriate, make the plan in14 volved ineligible for classification as a qualified 

15 health plan.’’. 

16 (b) CLARIFICATION OF REGULATORY AUTHORITY.— 

17 Such section is further amended— 

18 (1) in subsection (a)— 

19 (A) in the heading, by striking ‘‘PRE20 MIUM’’ and inserting ‘‘RATE’’; 

21 (B) in paragraph (1), by striking ‘‘unrea22 sonable increases in premiums’’ and inserting 

23 ‘‘potentially excessive, unjustified, or unfairly 

24 discriminatory rates, including premiums,’’; and 

25 (C) in paragraph (2)— 


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1 (i) by striking ‘‘an unreasonable pre2 mium increase’’ and inserting ‘‘a poten3 tially excessive, unjustified, or unfairly dis4 criminatory rate’’; 

5 (ii) by striking ‘‘the increase’’ and in6 serting ‘‘the rate’’; and 

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

8 inserting ‘‘such rates’’; and 

9 (2) in subsection (b)— 

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

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

12 (B) in paragraph (2)(B), by striking ‘‘pre13 mium’’ and inserting ‘‘rate’’. 

14 (c) CONFORMING AMENDMENTS.—Title XXVII of 

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

16 is amended— 

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

18 redesignated by the Patient Protection and Afford19 able Care Act— 

20 (A) in subsection (a)— 

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

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

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

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

25 (B) in subsection (b)— 


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

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

3 (ii) in paragraph (2)— 

4 (I) in subparagraph (A), by in5 serting ‘‘or section 2794 that is’’ after 

6 ‘‘this part’’; and 

7 (II) in subparagraph (C)(ii), by 

8 inserting ‘‘or section 2794’’ after 

9 ‘‘this part’’; and 

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

11 (A) in subsection (a)— 

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

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

14 (ii) in paragraph (2)— 

15 (I) by inserting ‘‘or section 

16 2794’’ after ‘‘set forth in this part’’; 

17 and 

18 (II) by inserting ‘‘and section 

19 2794’’ after ‘‘the requirements of this 

20 part’’; and 

21 (B) in subsection (b)— 

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

23 after ‘‘this part’’; and 

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

25 after ‘‘part A’’. 


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1 (d) APPLICABILITY TO GRANDFATHERED PLANS.— 

2 Section 1251(a)(4)(A) of the Patient Protection and Af3 fordable Care Act (Public Law 111–148), as added by sec4 tion 2301 of the Health Care and Education Reconcili5 ation Act of 2010 (Public Law 111–152), is amended by 

6 adding at the end the following: 

7 ‘‘(v) Section 2794 (relating to reason8 ableness of rates with respect to health in9 surance coverage).’’. 

10 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

11 are authorized to be appropriated to carry out this Act 

12 such sums as may be necessary. 

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

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

15 this Act and shall be implemented with respect to health 

16 plans beginning not later than January 1, 2022. 

17 SEC. 117. ELIGIBILITY OF DACA RECIPIENTS FOR QUALI18 FIED HEALTH PLANS OFFERED THROUGH EX19 CHANGES. 

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

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

22 18032(f)(3)) is amended— 

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

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


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

2 and 

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

4 purposes of the previous sentence, the term ‘DACA 

5 recipient’ means an individual who was granted de6 ferred action pursuant to the Deferred Action for 

7 Childhood Arrivals Program announced in the 

8 memorandum of the Secretary of Homeland Security 

9 dated June 15, 2012, and for whom such grant re10 mains valid.’’. 

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

12 Section 1402(e)(2) of the Patient Protection and Afford13 able Care Act (42 U.S.C. 18071(e)(2)) is amended by add14 ing at the end the following: ‘‘A DACA recipient (as de15 fined in section 1312(f)(3)) shall be treated as lawfully 

16 present for purposes of this section.’’. 

17 (c) ELIGIBILITY FOR ADVANCE PAYMENTS.—Section 

18 1412(d) of the Patient Protection and Affordable Care Act 

19 (42 U.S.C. 18082(d)) is amended by adding at the end 

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

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

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

23 (d) VERIFICATION OF ELIGIBILITY.—Section 

24 1411(c)(2)(B) of the Patient Protection and Affordable 

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


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

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

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

4 and 

5 (2) in clause (ii), by inserting ‘‘or a DACA re6 cipient (as defined in section 1312(f)(3))’’ after ‘‘an 

7 alien lawfully present in the United States’’. 

8 (e) APPLICATION OF TAX CREDIT FOR COVERAGE

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

10 of the Internal Revenue Code of 1986 is amended by add11 ing at the end the following: ‘‘A DACA recipient (as de12 fined in section 1312(f)(3) of the Patient Protection and 

13 Affordable Care Act) shall be treated as lawfully present 

14 for purposes of this section.’’. 

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

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

17 TITLE II—ENCOURAGING MED18 ICAID EXPANSION AND 

19 STRENGTHENING THE MED20 ICAID PROGRAM 

21 SEC. 201. INCENTIVIZING MEDICAID EXPANSION. 

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

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

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

25 2015, and 2016’’ and inserting ‘‘each of the first 3 


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1 consecutive 12-month periods in which the State 

2 provides medical assistance to newly eligible individ3 uals’’; 

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

5 and inserting ‘‘the fourth consecutive 12-month pe6 riod in which the State provides medical assistance 

7 to newly eligible individuals’’; 

8 (3) in subparagraph (C), by striking ‘‘2018’’ 

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

10 in which the State provides medical assistance to 

11 newly eligible individuals’’; 

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

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

14 in which the State provides medical assistance to 

15 newly eligible individuals’’; and 

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

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

18 consecutive 12-month period in which the State pro19 vides medical assistance to newly eligible individuals 

20 and each such period thereafter’’. 

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

22 2022, the amendments made by subsection (a) shall take 

23 effect as if included in the enactment of the Patient Pro24 tection and Affordable Care Act (Public Law 111–148). 


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1 SEC. 202. PROVIDING 12-MONTHS OF CONTINUOUS ELIGI2 BILITY FOR MEDICAID AND CHIP. 

3 (a) REQUIREMENT OF 12-MONTH CONTINUOUS EN4 ROLLMENT UNDER MEDICAID.—Section 1902(e)(12) of 

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

6 amended to read as follows: 

7 ‘‘(12) 12-MONTH CONTINUOUS ENROLLMENT.— 

8 Notwithstanding any other provision of this title, a 

9 State plan approved under this title (or under any 

10 waiver of such plan approved pursuant to section 

11 1115 or section 1915), shall provide that an indi12 vidual who is determined to be eligible for benefits 

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

14 enrolled for such benefits through the end of the 

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

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

17 (b) REQUIREMENT OF 12-MONTH CONTINUOUS EN18 ROLLMENT UNDER CHIP.— 

19 (1) IN GENERAL.—Section 2102(b) of the So20 cial Security Act (42 U.S.C. 1397bb(b)) is amended 

21 by adding at the end the following new paragraph: 

22 ‘‘(6) REQUIREMENT FOR 12-MONTH CONTIN23 UOUS ENROLLMENT.—Notwithstanding any other 

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

25 provides child health assistance under this title 

26 through a means other than described in section 


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1 2101(a)(2), shall provide that an individual who is 

2 determined to be eligible for benefits under such 

3 plan shall remain eligible and enrolled for such bene4 fits through the end of the month in which the 12- 

5 month period (beginning on the date of determina6 tion of eligibility) ends.’’. 

7 (2) CONFORMING AMENDMENT.—Section 

8 2105(a)(4)(A) of the Social Security Act (42 U.S.C. 

9 1397ee(a)(4)(A)) is amended— 

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

11 and inserting ‘‘is in compliance with the re12 quirement for’’; and 

13 (B) by striking ‘‘applying such policy 

14 under its State child health plan under this 

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

16 2102(b)’’. 

17 (c) EFFECTIVE DATE.— 

18 (1) IN GENERAL.—Except as provided in para19 graph (2) or (3), the amendments made by sub20 sections (a) and (b) shall apply to determinations 

21 (and redeterminations) of eligibility made on or after 

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

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

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

25 5(g)(1)(B)). 


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1 (2) EXTENSION OF EFFECTIVE DATE FOR

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

3 plan under title XIX or State child health plan 

4 under title XXI of the Social Security Act (42 

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

6 which the Secretary of Health and Human Services 

7 determines requires State legislation (other than leg8 islation appropriating funds) in order for the respec9 tive plan to meet the additional requirement imposed 

10 by the amendment made by subsection (a) or (b), re11 spectively, the respective plan shall not be regarded 

12 as failing to comply with the requirements of such 

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

14 applicable additional requirement before the first 

15 day of the first calendar quarter beginning after the 

16 close of the first regular session of the State legisla17 ture that begins after the date of enactment of this 

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

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

20 each year of the session is considered to be a sepa21 rate regular session of the State legislature. 

22 (3) OPTION TO IMPLEMENT 12-MONTH CONTIN23 UOUS ELIGIBILITY PRIOR TO EFFECTIVE DATE.—A 

24 State may elect through a State plan amendment 

25 under title XIX or XXI of the Social Security Act 


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1 (42 U.S.C. 1396 et seq.; 42 U.S.C. 1397aa et seq.) 

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

3 (b), respectively, on any date prior to the date speci4 fied in paragraph (1), but not sooner than the date 

5 of the enactment of this Act. 

6 SEC. 203. MANDATORY 12-MONTHS OF POSTPARTUM MED7 ICAID ELIGIBILITY. 

8 (a) EXTENDING CONTINUOUS MEDICAID AND CHIP 

9 COVERAGE FOR PREGNANT AND POSTPARTUM WOMEN.— 

10 (1) MEDICAID.—Title XIX of the Social Secu11 rity Act (42 U.S.C. 1396 et seq.) is amended— 

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

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

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

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

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

18 ‘‘60-day period’’ and inserting ‘‘365-day pe19 riod’’; and 

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

21 in the matter following paragraph (30), by 

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

23 day period’’. 

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

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


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1 day period’’ each place it appears and inserting 

2 ‘‘365-day period’’. 

3 (b) REQUIRING FULL BENEFITS FOR PREGNANT

4 AND POSTPARTUM WOMEN.— 

5 (1) MEDICAID.— 

6 (A) IN GENERAL.—Paragraph (5) of sec7 tion 1902(e) of the Social Security Act (24 

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

9 ‘‘(5) Any woman who is eligible for medical as10 sistance under the State plan or a waiver of such 

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

12 pregnant, shall continue to be eligible under the plan 

13 or waiver for medical assistance through the end of 

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

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

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

17 assistance, including if the woman’s eligibility for 

18 medical assistance is on the basis of being preg19 nant.’’. 

20 (B) CONFORMING AMENDMENT.—Section 

21 1902(a)(10) of the Social Security Act (42 

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

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

24 the medical assistance’’ and all that follows 

25 through ‘‘complicate pregnancy,’’. 


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

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

3 (A) by redesignating subparagraphs (H) 

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

5 respectively; and 

6 (B) by inserting after subparagraph (G), 

7 the following: 

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

9 day continuous coverage for pregnant and 

10 postpartum women).’’. 

11 (c) MAINTENANCE OF EFFORT.— 

12 (1) MEDICAID.—Section 1902 of the Social Se13 curity Act (42 U.S.C. 1396a) is amended— 

14 (A) in paragraph (74), by striking ‘‘sub15 section (gg); and’’ and inserting ‘‘subsections 

16 (gg) and (qq);’’; and 

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

18 subsection: 

19 ‘‘(qq) MAINTENANCE OF EFFORT RELATED TO LOW20 INCOME PREGNANT WOMEN.—For calendar quarters be21 ginning on or after the effective date described in section 

22 203(d) of the Patient Protection and Affordable Care En23 hancement Act, and before January 1, 2023, no Federal 

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


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1 for amounts expended under a State plan under this title 

2 or a waiver of such plan if the State— 

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

4 standards, methodologies, or procedures for individ5 uals described in subsection (l)(1) who are eligible 

6 for medical assistance under the State plan or waiv7 er under subsection (a)(10)(A)(ii)(IX) that are more 

8 restrictive than the eligibility standards, methodolo9 gies, or procedures, respectively, for such individuals 

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

11 date of the enactment of this subsection; or 

12 ‘‘(2) provides medical assistance to individuals 

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

14 medical assistance under such plan or waiver under 

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

16 than the level at which the State provides such as17 sistance to such individuals under such plan or waiv18 er on the date of the enactment of this subsection.’’. 

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

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

21 (b), is further amended by adding at the end the fol22 lowing subsection: 

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

24 quarters beginning on or after the effective date described 

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


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

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

3 to a State child health plan if the State— 

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

5 standards, methodologies, or procedures for targeted 

6 low-income pregnant women that are more restric7 tive than the eligibility standards, methodologies, or 

8 procedures, respectively, under such plan that are in 

9 effect on the date of the enactment of this sub10 section; or 

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

12 targeted low-income pregnant women under such 

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

14 the State provides such assistance to such women 

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

16 subsection.’’. 

17 (d) EFFECTIVE DATE.— 

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

19 paragraph (2), the amendments made by subsections 

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

21 date described in this subsection shall be) the first 

22 day of the calendar quarter during which the last 

23 day of the emergency period described in section 

24 1135(g)(1)(B) of the Social Security Act (42 U.S.C. 

25 1320b–5(g)(1)(B)) occurs. 


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1 (2) EXTENSION OF EFFECTIVE DATE FOR

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

3 plan under title XIX or State child health plan 

4 under title XXI of the Social Security Act (42 

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

6 which the Secretary of Health and Human Services 

7 determines requires State legislation (other than leg8 islation appropriating funds) in order for the respec9 tive plan to meet the additional requirement imposed 

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

11 respectively, the respective plan shall not be re12 garded as failing to comply with the requirements of 

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

14 such applicable additional requirement before the 

15 first day of the first calendar quarter beginning 

16 after the close of the first regular session of the 

17 State legislature that begins after the date of enact18 ment of this Act. For purposes of the previous sen19 tence, in the case of a State that has a 2-year legis20 lative session, each year of the session is considered 

21 to be a separate regular session of the State legisla22 ture. 


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1 SEC. 204. REDUCING THE ADMINISTRATIVE FMAP FOR 

2 NONEXPANSION STATES. 

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

4 1396b) is amended— 

5 (1) in subsection (a)(7), by inserting ‘‘sub6 section (bb) and’’ before ‘‘section 1919(g)(3)(B)’’; 

7 and 

8 (2) by adding at the end the following new sub9 section: 

10 ‘‘(bb) REDUCTION OF FEDERAL PAYMENTS FOR

11 CERTAIN ADMINISTRATIVE COSTS OF NONEXPANSION

12 STATES.— 

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

14 does not provide under the State plan of such State 

15 (or waiver of such plan) for making medical assist16 ance available in accordance with section 1902(k)(1) 

17 to all individuals described in section 

18 1902(a)(10)(i)(VIII) for a calendar quarter begin19 ning on or after October 1, 2022, the Secretary may 

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

21 for amounts described in such subsection expended 

22 during such quarter by such State by the number of 

23 percentage points specified in paragraph (2) for such 

24 quarter. 

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

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


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1 specified in this paragraph for a calendar quarter is 

2 the following: 

3 ‘‘(A) For the calendar quarter beginning 

4 on October 1, 2022, 0.5. 

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

6 or after January 1, 2023, and ending before 

7 July 1, 2027, the number of percentage points 

8 specified under this paragraph for the previous 

9 quarter, plus 0.5. 

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

11 or after July 1, 2027, 10. 

12 ‘‘(3) DEFINITION.—For purposes of this sub13 section, the term ‘State’ means a State that is one 

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

15 SEC. 205. ENHANCED REPORTING REQUIREMENTS FOR 

16 NONEXPANSION STATES. 

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

18 1396b), as amended by section 204, is further amended— 

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

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

21 (2) by adding at the end the following new sub22 section: 

23 ‘‘(cc) REDUCTION OF FEDERAL PAYMENTS FOR CER24 TAIN ADMINISTRATIVE COSTS OF NONEXPANSION STATES

25 THAT DO NOT SATISFY REPORTING REQUIREMENTS.— 


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1 ‘‘(1) IN GENERAL.— 

2 ‘‘(A) REDUCTION.—In the case of a non3 expansion State, with respect to a fiscal year 

4 (beginning with fiscal year 2023) that does not 

5 satisfy the reporting requirement under para6 graph (2) for such fiscal year, the percentage 

7 specified in subsection (a)(7) for amounts de8 scribed in such subsection expended by such 

9 State during a calendar quarter described in 

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

11 subject to subparagraph (B), shall be reduced 

12 by the number of percentage points specified in 

13 paragraph (4) for the respective calendar quar14 ter. 

15 ‘‘(B) EXCEPTION.—In the case of a non16 expansion State that is subject to a reduction 

17 under subparagraph (A) for the calendar quar18 ter described in paragraph (4)(A) with respect 

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

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

21 paragraph (2) (without regard to the dates 

22 specified in such subparagraph (A) and (C)) be23 fore the beginning of a subsequent calendar 

24 quarter described in paragraph (4) with respect 

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


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1 subject to a reduction under subparagraph (A) 

2 for such subsequent calendar quarter. 

3 ‘‘(2) REPORTING REQUIREMENT.—For pur4 poses of paragraph (1), a nonexpansion State satis5 fies the reporting requirement under this paragraph 

6 for a fiscal year, if the nonexpansion State— 

7 ‘‘(A) by not later than January 1 of such 

8 year, posts on the public website of the State 

9 agency administering the State plan, the infor10 mation described in paragraph (3) with respect 

11 to such State for the previous year; 

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

13 for notice and comment on such information; 

14 and 

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

16 year, submits to the Secretary a complete re17 port including such information, comments sub18 mitted pursuant to subparagraph (B), and a re19 sponse by the State to each such comment. 

20 ‘‘(3) INFORMATION DESCRIBED.—The informa21 tion described in this paragraph, with respect to a 

22 State and year, is the following: 

23 ‘‘(A) The the estimated number of individ24 uals who were uninsured for at least 6 months, 

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


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

2 well as a detailed description of the basis for 

3 the estimates. 

4 ‘‘(B) The estimated number of the individ5 uals estimated under subparagraph (A) in the 

6 State who would be eligible for medical assist7 ance under the State plan if the State were to 

8 make medical assistance under the State plan 

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

10 to all individuals described in section 

11 1902(a)(10)(i)(VIII), and a detailed description 

12 of the basis for the estimates. 

13 ‘‘(C) A comprehensive listing of State in14 come eligibility criteria for all mandatory and 

15 optional Medicaid eligibility groups for which 

16 the State plan provides medical assistance 

17 (other than with respect to individuals described 

18 in clause (i)(II), (ii)(VI), or (ii)(XXII) of sec19 tion 1902(a)(10)(A)). 

20 ‘‘(D) The total amount of hospital uncom21 pensated-care costs and a breakdown of the 

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

23 rural and non-rural hospitals. 

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

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


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

2 percentage points described in this paragraph for 

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

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

5 the April 1 occurring during such fiscal year, 

6 0.5 percentage points; 

7 ‘‘(B) for the calendar quarter beginning on 

8 the July 1 occurring during such fiscal year, 

9 1.0 percentage point; and 

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

11 the October 1 occurring during the subsequent 

12 fiscal year, 1.5 percentage points. 

13 ‘‘(5) PAYMENT IN CASE OF REPORTING

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

15 State, with respect to any calendar quarter with re16 spect to a fiscal year (beginning with 2021), for car17 rying out subparagraphs (A) through (C) of para18 graph (2) shall, for purposes of section 1903(a)(7), 

19 be considered to be expenses necessary for the prop20 er and efficient administration of the State plan 

21 under this title. 

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

23 purposes of this subsection, the term ‘nonexpansion 

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

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


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

2 waiver of such plan) for making medical assistance 

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

4 all individuals described in section 

5 1902(a)(10)(i)(VIII).’’. 

6 SEC. 206. PRIMARY CARE PAY INCREASE. 

7 (a) RENEWAL OF PAYMENT FLOOR; ADDITIONAL

8 PROVIDERS.— 

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

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

11 amended by striking subparagraph (C) and inserting 

12 the following: 

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

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

15 less than 100 percent of the payment rate that 

16 applies to such services and physician under 

17 part B of title XVIII (or, if greater, the pay18 ment rate that would be applicable under such 

19 part if the conversion factor under section 

20 1848(d) for the year involved were the conver21 sion factor under such section for 2009), and 

22 that is not less than the rate that would other23 wise apply to such services under this title if 

24 the rate were determined without regard to this 

25 subparagraph, and that are— 


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

2 by a physician with a primary specialty 

3 designation of family medicine, general in4 ternal medicine, or pediatric medicine; or 

5 ‘‘(ii) furnished during the period that 

6 begins on the first day of the first month 

7 that begins one year after the date of en8 actment of the Patient Protection and Af9 fordable Care Enhancement Act and ends 

10 September 30, 2024— 

11 ‘‘(I) by a physician with a pri12 mary specialty designation of family 

13 medicine, general internal medicine, 

14 or pediatric medicine, but only if the 

15 physician self-attests that the physi16 cian is Board certified in family medi17 cine, general internal medicine, or pe18 diatric medicine; 

19 ‘‘(II) by a physician with a pri20 mary specialty designation of obstet21 rics and gynecology, but only if the 

22 physician self-attests that the physi23 cian is Board certified in obstetrics 

24 and gynecology; 


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1 ‘‘(III) by an advanced practice 

2 clinician, as defined by the Secretary, 

3 that works under the supervision of— 

4 ‘‘(aa) a physician that satis5 fies the criteria specified in sub6 clause (I) or (II); or 

7 ‘‘(bb) a nurse practitioner or 

8 a physician assistant (as such 

9 terms are defined in section 

10 1861(aa)(5)(A)) who is working 

11 in accordance with State law, or 

12 a certified nurse-midwife (as de13 fined in section 1861(gg)) who is 

14 working in accordance with State 

15 law; 

16 ‘‘(IV) by a rural health clinic, 

17 Federally-qualified health center, or 

18 other health clinic that receives reim19 bursement on a fee schedule applica20 ble to a physician, a nurse practi21 tioner or a physician assistant (as 

22 such terms are defined in section 

23 1861(aa)(5)(A)) who is working in ac24 cordance with State law, or a certified 

25 nurse-midwife (as defined in section 


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1 1861(gg)) who is working in accord2 ance with State law, for services fur3 nished by a physician, nurse practi4 tioner, physician assistant, or certified 

5 nurse-midwife, or services furnished 

6 by an advanced practice clinician su7 pervised by a physician described in 

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

9 advanced practice clinician, or a cer10 tified nurse-midwife; or 

11 ‘‘(V) by a nurse practitioner or a 

12 physician assistant (as such terms are 

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

14 who is working in accordance with 

15 State law, or a certified nurse-midwife 

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

17 is working in accordance with State 

18 law, in accordance with procedures 

19 that ensure that the portion of the 

20 payment for such services that the 

21 nurse practitioner, physician assist22 ant, or certified nurse-midwife is paid 

23 is not less than the amount that the 

24 nurse practitioner, physician assist25 ant, or certified nurse-midwife would 


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1 be paid if the services were provided 

2 under part B of title XVIII;’’. 

3 (2) CONFORMING AMENDMENTS.—Section 

4 1905(dd) of the Social Security Act (42 U.S.C. 

5 1396d(dd)) is amended— 

6 (A) by striking ‘‘Notwithstanding’’ and in7 serting the following: 

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

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

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

11 after ‘‘2015,’’; and 

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

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

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

15 paragraph is the period that begins on the first day 

16 of the first month that begins one year after the 

17 date of enactment of the Patient Protection and Af18 fordable Care Enhancement Act.’’. 

19 (b) IMPROVED TARGETING OF PRIMARY CARE.—Sec20 tion 1902(jj) of the Social Security Act (42 U.S.C. 

21 1396a(jj)) is amended— 

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

23 subparagraphs (A) and (B), respectively and realign24 ing the left margins accordingly; 


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

2 the following: 

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

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

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

6 any services described in subparagraph (A) or (B) of 

7 paragraph (1) if such services are provided in an 

8 emergency department of a hospital.’’. 

9 (c) ENSURING PAYMENT BY MANAGED CARE ENTI10 TIES.— 

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

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

13 is amended— 

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

15 the semicolon; 

16 (B) by realigning the left margin of clause 

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

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

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

20 (C) by inserting after clause (xiii) the fol21 lowing: 

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

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

24 primary care services defined in section 1902(jj) 

25 that are furnished during a year or period specified 


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

2 at least equal to the amounts set forth and required 

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

4 upon request, provide documentation to the State, 

5 sufficient to enable the State and the Secretary to 

6 ensure compliance with subclause (I), and (III) the 

7 Secretary shall approve payments described in sub8 clause (I) that are furnished through an agreed 

9 upon capitation, partial capitation, or other value10 based payment arrangement if the capitation, partial 

11 capitation, or other value-based payment arrange12 ment is based on a reasonable methodology and the 

13 entity provides documentation to the State sufficient 

14 to enable the State and the Secretary to ensure com15 pliance with subclause (I).’’. 

16 (2) CONFORMING AMENDMENT.—Section 

17 1932(f) of the Social Security Act (42 U.S.C. 

18 1396u–2(f)) is amended by inserting ‘‘and clause 

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

20 SEC. 207. PERMANENT FUNDING FOR CHIP. 

21 (a) IN GENERAL.—Section 2104(a) of the Social Se22 curity Act (42 U.S.C. 1397dd(a)) is amended— 

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

24 ‘‘and’’; 


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1 (2) by amending paragraph (27) to read as fol2 lows: 

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

4 year 2024, such sums as are necessary to fund allot5 ments to States under subsections (c) and (m).’’; 

6 and 

7 (3) by striking paragraph (28). 

8 (b) IN GENERAL.—Section 2104(a)(28) of the Social 

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

10 read as follows: 

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

12 year, such sums as are necessary to fund allotments 

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

14 (c) ALLOTMENTS.— 

15 (1) IN GENERAL.—Section 2104(m) of the So16 cial Security Act (42 U.S.C. 1397dd(m)) is amend17 ed— 

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

19 2023, and 2027’’ and inserting ‘‘and 2023’’; 

20 (B) in paragraph (7)— 

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

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

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

24 by striking ‘‘or fiscal year 2026’’ and inVerDate Sep 11 2014 23:15 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\H1425.PCS H1425

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1 serting ‘‘fiscal year 2026, or a subsequent 

2 even-numbered fiscal year’’; 

3 (C) in paragraph (9)— 

4 (i) by striking ‘‘(10), or (11)’’ and in5 serting ‘‘or (10)’’; and 

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

7 inserting ‘‘or 2023’’; and 

8 (D) by striking paragraph (11). 

9 (2) CONFORMING AMENDMENT.—Section 

10 50101(b)(2) of the Bipartisan Budget Act of 2018 

11 (Public Law 115–123) is repealed. 

12 SEC. 208. PERMANENT EXTENSION OF CHIP ENROLLMENT 

13 AND QUALITY MEASURES. 

14 (a) PEDIATRIC QUALITY MEASURES PROGRAM.— 

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

16 1320b–9a(i)(1)) is amended— 

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

18 ‘‘and’’; 

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

20 at the end and insert a semicolon; and 

21 (3) by adding at the end the following new sub22 paragraphs: 

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

24 the purpose of carrying out this section (other 

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


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

2 amount appropriated under this paragraph for 

3 the previous fiscal year, increased by the per4 centage increase in the consumer price index for 

5 all urban consumers (all items; United States 

6 city average) over such previous fiscal year, for 

7 the purpose of carrying out this section (other 

8 than subsections (e), (f), and (g)).’’. 

9 (b) EXPRESS LANE ELIGIBILITY OPTION.—Section 

10 1902(e)(13) of the Social Security Act (42 U.S.C. 

11 1396a(e)(13)) is amended by striking subparagraph (I). 

12 (c) ASSURANCE OF AFFORDABILITY STANDARD FOR

13 CHILDREN AND FAMILIES.— 

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

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

16 amended— 

17 (A) in the paragraph heading, by striking 

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

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

20 preceding clause (i)— 

21 (i) by striking ‘‘During the period 

22 that begins on the date of enactment of 

23 the Patient Protection and Affordable Care 

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

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1 actment of the Patient Protection and Af2 fordable Care Act’’; 

3 (ii) by striking ‘‘During the period 

4 that begins on October 1, 2019, and ends 

5 on September 30, 2027’’ and inserting 

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

7 (iii) by striking ‘‘The preceding sen8 tences shall not be construed as preventing 

9 a State during any such periods from’’ and 

10 inserting ‘‘The preceding sentences shall 

11 not be construed as preventing a State 

12 from’’. 

13 (2) CONFORMING AMENDMENTS.—Section 

14 1902(gg)(2) of the Social Security Act (42 U.S.C. 

15 1396a(gg)(2)) is amended— 

16 (A) in the paragraph heading, by striking 

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

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

19 and all that follows through ‘‘ends on Sep20 tember 30, 2027’’ and inserting ‘‘(but begin21 ning on October 1, 2019,’’. 

22 (d) QUALIFYING STATES OPTION.—Section 

23 2105(g)(4) of the Social Security Act (42 U.S.C. 

24 1397ee(g)(4)) is amended— 


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

2 FISCAL YEARS 2009 THROUGH 2027’’ and inserting 

3 ‘‘AFTER FISCAL YEAR 2008’’; and 

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

5 of fiscal years 2009 through 2027’’ and inserting 

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

7 (e) OUTREACH AND ENROLLMENT PROGRAM.—Sec8 tion 2113 of the Social Security Act (42 U.S.C. 1397mm) 

9 is amended— 

10 (1) in subsection (a)— 

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

12 the period of fiscal years 2009 through 2027’’ 

13 and inserting ‘‘, beginning with fiscal year 

14 2009,’’; 

15 (B) in paragraph (2)— 

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

17 amounts’’ and inserting ‘‘10 percent of 

18 such amounts for the period or the fiscal 

19 year for which such amounts are appro20 priated’’; and 

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

22 and inserting ‘‘, during such period or such 

23 fiscal year,’’; and 

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

25 period of fiscal years 2024 through 2027, an 


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1 amount equal to 10 percent of such amounts’’ 

2 and inserting ‘‘Beginning with fiscal year 2024, 

3 an amount equal to 10 percent of such amounts 

4 for the period or the fiscal year for which such 

5 amounts are appropriated’’; and 

6 (2) in subsection (g)— 

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

8 ‘‘2017,’’; 

9 (B) by striking ‘‘and $48,000,000’’ and in10 serting ‘‘$48,000,000’’; and 

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

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

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

14 the amount appropriated under this subsection 

15 for the previous fiscal year, increased by the 

16 percentage increase in the consumer price index 

17 for all urban consumers (all items; United 

18 States city average) over such previous fiscal 

19 year’’. 

20 (f) CHILD ENROLLMENT CONTINGENCY FUND.— 

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

22 1397dd(n)) is amended— 

23 (1) in paragraph (2)— 

24 (A) in subparagraph (A)(ii)— 


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1 (i) by striking ‘‘and 2024 through 

2 2026’’ and inserting ‘‘beginning with fiscal 

3 year 2024’’; and 

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

5 inserting ‘‘, and 2023’’; and 

6 (B) in subparagraph (B)— 

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

8 and inserting ‘‘beginning with fiscal year 

9 2024’’; and 

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

11 inserting ‘‘, and 2023’’; and 

12 (2) in paragraph (3)(A)— 

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

14 2026’’ and inserting ‘‘beginning with fiscal year 

15 2024’’; and 

16 (B) by striking ‘‘2023, or 2027’’ and in17 serting ‘‘, or 2023’’. 

18 SEC. 209. STATE OPTION TO INCREASE CHILDREN’S ELIGI19 BILITY FOR MEDICAID AND CHIP. 

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

21 (42 U.S.C. 1397jj(b)(1)(B)(ii)) is amended— 

22 (1) in subclause (II), by striking ‘‘or’’ at the 

23 end; 

24 (2) in subclause (III), by striking ‘‘and’’ at the 

25 end and inserting ‘‘or’’; and 


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1 (3) by inserting after subclause (III) the fol2 lowing new subclause: 

3 ‘‘(IV) at the option of the State, 

4 whose family income exceeds the max5 imum income level otherwise estab6 lished for children under the State 

7 child health plan as of the date of the 

8 enactment of this subclause; and’’. 

9 SEC. 210. MEDICAID COVERAGE FOR CITIZENS OF FREELY 

10 ASSOCIATED STATES. 

11 (a) IN GENERAL.—Section 402(b)(2) of the Personal 

12 Responsibility and Work Opportunity Reconciliation Act 

13 of 1996 (8 U.S.C. 1612(b)(2)) is amended by adding at 

14 the end the following new subparagraph: 

15 ‘‘(G) MEDICAID EXCEPTION FOR CITIZENS

16 OF FREELY ASSOCIATED STATES.—With respect 

17 to eligibility for benefits for the designated Fed18 eral program defined in paragraph (3)(C) (re19 lating to the Medicaid program), section 401(a) 

20 and paragraph (1) shall not apply to any indi21 vidual who lawfully resides in 1 of the 50 States 

22 or the District of Columbia in accordance with 

23 the Compacts of Free Association between the 

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1 nesia, the Republic of the Marshall Islands, and 

2 the Republic of Palau and shall not apply, at 

3 the option of the Governor of Puerto Rico, the 

4 Virgin Islands, Guam, the Northern Mariana 

5 Islands, or American Samoa as communicated 

6 to the Secretary of Health and Human Services 

7 in writing, to any individual who lawfully re8 sides in the respective territory in accordance 

9 with such Compacts.’’. 

10 (b) EXCEPTION TO 5–YEAR LIMITED ELIGIBILITY.— 

11 Section 403(d) of such Act (8 U.S.C. 1613(d)) is amend12 ed— 

13 (1) in paragraph (1), by striking ‘‘or’’ at the 

14 end; 

15 (2) in paragraph (2), by striking the period at 

16 the end and inserting ‘‘; or’’; and 

17 (3) by adding at the end the following new 

18 paragraph: 

19 ‘‘(3) an individual described in section 

20 402(b)(2)(G), but only with respect to the des21 ignated Federal program defined in section 

22 402(b)(3)(C).’’. 

23 (c) DEFINITION OF QUALIFIED ALIEN.—Section 

24 431(b) of such Act (8 U.S.C. 1641(b)) is amended— 


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1 (1) in paragraph (6), by striking ‘‘; or’’ at the 

2 end and inserting a comma; 

3 (2) in paragraph (7), by striking the period at 

4 the end and inserting ‘‘, or’’; and 

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

6 paragraph: 

7 ‘‘(8) an individual who lawfully resides in the 

8 United States in accordance with a Compact of Free 

9 Association referred to in section 402(b)(2)(G), but 

10 only with respect to the designated Federal program 

11 defined in section 402(b)(3)(C) (relating to the Med12 icaid program).’’. 

13 (d) APPLICATION TO STATE PLANS.—Section 

14 1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 

15 1396a(a)(10)(A)(i)) is amended by inserting after sub16 clause (IX) the following: 

17 ‘‘(X) who are described in section 

18 402(b)(2)(G) of the Personal Respon19 sibility and Work Opportunity Rec20 onciliation Act of 1996 and eligible 

21 for benefits under this title by reason 

22 of application of such section;’’. 

23 (e) CONFORMING AMENDMENTS.—Section 1108 of 

24 the Social Security Act (42 U.S.C. 1308) is amended— 


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1 (1) in subsection (f), in the matter preceding 

2 paragraph (1), by striking ‘‘subsections (g) and (h) 

3 and section 1935(e)(1)(B)’’ and inserting ‘‘sub4 sections (g), (h), and (i) and section 1935(e)(1)(B)’’; 

5 and 

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

7 ‘‘(i) EXCLUSION OF MEDICAL ASSISTANCE EXPENDI8 TURES FOR CITIZENS OF FREELY ASSOCIATED STATES.— 

9 Expenditures for medical assistance provided to an indi10 vidual described in section 431(b)(8) of the Personal Re11 sponsibility and Work Opportunity Reconciliation Act of 

12 1996 (8 U.S.C. 1641(b)(8)) shall not be taken into ac13 count for purposes of applying payment limits under sub14 sections (f) and (g).’’. 

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

16 this section shall apply to benefits for items and services 

17 furnished on or after the date of the enactment of this 

18 Act. 

19 SEC. 211. EXTENSION OF FULL FEDERAL MEDICAL ASSIST20 ANCE PERCENTAGE TO INDIAN HEALTH 

21 CARE PROVIDERS. 

22 (a) IN GENERAL.—Section 1905 of the Social Secu23 rity Act (42 U.S.C. 1396d) is amended— 

24 (1) in subsection (a), by amending paragraph 

25 (9) to read as follows: 


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1 ‘‘(9) clinic services furnished by or under the 

2 direction of a physician, without regard to whether 

3 the clinic itself is administered by a physician, in4 cluding— 

5 ‘‘(A) such services furnished outside the 

6 clinic by clinic personnel to an eligible indi7 vidual who does not reside in a permanent 

8 dwelling or does not have a fixed home or mail9 ing address; and 

10 ‘‘(B) such services provided outside the 

11 clinic on the basis of a referral from a clinic ad12 ministered by an Indian Health Program (as 

13 defined in paragraph (12) of section 4 of the 

14 Indian Health Care Improvement Act, or an 

15 Urban Indian Organization as defined in para16 graph (29) of section 4 of such Act that has a 

17 grant or contract with the Indian Health Serv18 ice under title V of such Act;’’. 

19 (2) in subsection (b), by inserting after ‘‘(as de20 fined in section 4 of the Indian Health Care Im21 provement Act)’’ the following: ‘‘; the Federal med22 ical assistance percentage shall also be 100 per cen23 tum with respect to amounts expended as medical 

24 assistance for services which are received through an 

25 Urban Indian organization (as defined in section 4 


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1 of the Indian Health Care Improvement Act) that 

2 has a grant or contract with the Indian Health Serv3 ice under title V of such Act’’. 

4 (b) EXTENSION OF FULL FEDERAL MEDICAL AS5 SISTANCE PERCENTAGE TO SERVICES FURNISHED BY NA6 TIVE HAWAIIAN HEALTH CARE SYSTEMS.— 

7 (1) IN GENERAL.—Beginning on the date of en8 actment of this Act— 

9 (A) for purposes of section 1905(a)(9) of 

10 the Social Security Act (42 U.S.C. 

11 1396d(a)(9)), services described in subsection 

12 (b) that are furnished in any location shall be 

13 deemed to be clinic services; and 

14 (B) notwithstanding section 1905(b) of the 

15 Social Security Act (42 U.S.C. 1396d(b)), the 

16 Federal medical assistance percentage with re17 spect to amounts expended as medical assist18 ance for such services shall be 100 percent. 

19 (2) SERVICES DESCRIBED.—The services de20 scribed in this subsection are services for which pay21 ment is available under the State plan under title 

22 XIX of the Social Security Act (42 U.S.C. 1396 et 

23 seq.) of Hawaii (or any waiver of such plan) that— 

24 (A) are furnished on or after the date of 

25 enactment of this Act; 


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1 (B) are furnished to an individual who— 

2 (i) is a Native Hawaiian; and 

3 (ii) is eligible for medical assistance 

4 under such plan; and 

5 (C) are furnished by an Indian health care 

6 provider (as such term is defined in section 

7 1932(h)(4)(A) of the Social Security Act (42 

8 U.S.C. 1396u–2(h)(4)(A)) or a Native Hawai9 ian health care system (without regard to 

10 whether such services are furnished through an 

11 Indian Health Service facility). 

12 TITLE III—LOWERING PRICES 

13 THROUGH FAIR DRUG PRICE 

14 NEGOTIATION 

15 SEC. 301. ESTABLISHING A FAIR DRUG PRICING PROGRAM. 

16 (a) PROGRAM TO LOWER PRICES FOR CERTAIN

17 HIGH-PRICED SINGLE SOURCE DRUGS.—Title XI of the 

18 Social Security Act (42 U.S.C. 1301 et seq.) is amended 

19 by adding at the end the following new part: 

20 ‘‘PART E—FAIR PRICE NEGOTIATION PROGRAM 

21 TO LOWER PRICES FOR CERTAIN HIGH22 PRICED SINGLE SOURCE DRUGS 

23 ‘‘SEC. 1191. ESTABLISHMENT OF PROGRAM. 

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

25 Fair Price Negotiation Program (in this part referred to 


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1 as the ‘program’). Under the program, with respect to 

2 each price applicability period, the Secretary shall— 

3 ‘‘(1) publish a list of selected drugs in accord4 ance with section 1192; 

5 ‘‘(2) enter into agreements with manufacturers 

6 of selected drugs with respect to such period, in ac7 cordance with section 1193; 

8 ‘‘(3) negotiate and, if applicable, renegotiate 

9 maximum fair prices for such selected drugs, in ac10 cordance with section 1194; and 

11 ‘‘(4) carry out the administrative duties de12 scribed in section 1196. 

13 ‘‘(b) DEFINITIONS RELATING TO TIMING.—For pur14 poses of this part: 

15 ‘‘(1) INITIAL PRICE APPLICABILITY YEAR.—The 

16 term ‘initial price applicability year’ means a plan 

17 year (beginning with plan year 2023) or, if agreed 

18 to in an agreement under section 1193 by the Sec19 retary and manufacturer involved, a period of more 

20 than one plan year (beginning on or after January 

21 1, 2023). 

22 ‘‘(2) PRICE APPLICABILITY PERIOD.—The term 

23 ‘price applicability period’ means, with respect to a 

24 drug, the period beginning with the initial price ap25 plicability year with respect to which such drug is a 


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1 selected drug and ending with the last plan year 

2 during which the drug is a selected drug. 

3 ‘‘(3) SELECTED DRUG PUBLICATION DATE.— 

4 The term ‘selected drug publication date’ means, 

5 with respect to each initial price applicability year, 

6 April 15 of the plan year that begins 2 years prior 

7 to such year. 

8 ‘‘(4) VOLUNTARY NEGOTIATION PERIOD.—The 

9 term ‘voluntary negotiation period’ means, with re10 spect to an initial price applicability year with re11 spect to a selected drug, the period— 

12 ‘‘(A) beginning on the sooner of— 

13 ‘‘(i) the date on which the manufac14 turer of the drug and the Secretary enter 

15 into an agreement under section 1193 with 

16 respect to such drug; or 

17 ‘‘(ii) June 15 following the selected 

18 drug publication date with respect to such 

19 selected drug; and 

20 ‘‘(B) ending on March 31 of the year that 

21 begins one year prior to the initial price appli22 cability year. 

23 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 

24 part: 


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1 ‘‘(1) FAIR PRICE ELIGIBLE INDIVIDUAL.—The 

2 term ‘fair price eligible individual’ means, with re3 spect to a selected drug— 

4 ‘‘(A) in the case such drug is furnished or 

5 dispensed to the individual at a pharmacy or by 

6 a mail order service— 

7 ‘‘(i) an individual who is enrolled 

8 under a prescription drug plan under part 

9 D of title XVIII or an MA–PD plan under 

10 part C of such title if coverage is provided 

11 under such plan for such selected drug; 

12 and 

13 ‘‘(ii) an individual who is enrolled 

14 under a group health plan or health insur15 ance coverage offered in the group or indi16 vidual market (as such terms are defined 

17 in section 2791 of the Public Health Serv18 ice Act) with respect to which there is in 

19 effect an agreement with the Secretary 

20 under section 1197 with respect to such se21 lected drug as so furnished or dispensed; 

22 and 

23 ‘‘(B) in the case such drug is furnished or 

24 administered to the individual by a hospital, 


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1 physician, or other provider of services or sup2 plier— 

3 ‘‘(i) an individual who is entitled to 

4 benefits under part A of title XVIII or en5 rolled under part B of such title if such se6 lected drug is covered under the respective 

7 part; and 

8 ‘‘(ii) an individual who is enrolled 

9 under a group health plan or health insur10 ance coverage offered in the group or indi11 vidual market (as such terms are defined 

12 in section 2791 of the Public Health Serv13 ice Act) with respect to which there is in 

14 effect an agreement with the Secretary 

15 under section 1197 with respect to such se16 lected drug as so furnished or adminis17 tered. 

18 ‘‘(2) MAXIMUM FAIR PRICE.—The term ‘max19 imum fair price’ means, with respect to a plan year 

20 during a price applicability period and with respect 

21 to a selected drug (as defined in section 1192(c)) 

22 with respect to such period, the price published pur23 suant to section 1195 in the Federal Register for 

24 such drug and year. 


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1 ‘‘(3) AVERAGE INTERNATIONAL MARKET PRICE

2 DEFINED.— 

3 ‘‘(A) IN GENERAL.—The terms ‘average 

4 international market price’ and ‘AIM price’ 

5 mean, with respect to a drug, the average price 

6 (which shall be the net average price, if prac7 ticable, and volume-weighted, if practicable) for 

8 a unit (as defined in paragraph (4)) of the drug 

9 for sales of such drug (calculated across dif10 ferent dosage forms and strengths of the drug 

11 and not based on the specific formulation or 

12 package size or package type), as computed (as 

13 of the date of publication of such drug as a se14 lected drug under section 1192(a)) in all coun15 tries described in clause (ii) of subparagraph 

16 (B) that are applicable countries (as described 

17 in clause (i) of such subparagraph) with respect 

18 to such drug. 

19 ‘‘(B) APPLICABLE COUNTRIES.— 

20 ‘‘(i) IN GENERAL.—For purposes of 

21 subparagraph (A), a country described in 

22 clause (ii) is an applicable country de23 scribed in this clause with respect to a 

24 drug if there is available an average price 


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1 for any unit for the drug for sales of such 

2 drug in such country. 

3 ‘‘(ii) COUNTRIES DESCRIBED.—For 

4 purposes of this paragraph, the following 

5 are countries described in this clause: 

6 ‘‘(I) Australia. 

7 ‘‘(II) Canada. 

8 ‘‘(III) France. 

9 ‘‘(IV) Germany. 

10 ‘‘(V) Japan. 

11 ‘‘(VI) The United Kingdom. 

12 ‘‘(4) UNIT.—The term ‘unit’ means, with re13 spect to a drug, the lowest identifiable quantity 

14 (such as a capsule or tablet, milligram of molecules, 

15 or grams) of the drug that is dispensed. 

16 ‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS 

17 AS SELECTED DRUGS. 

18 ‘‘(a) IN GENERAL.—Not later than the selected drug 

19 publication date with respect to an initial price applica20 bility year, subject to subsection (h), the Secretary shall 

21 select and publish in the Federal Register a list of— 

22 ‘‘(1)(A) with respect to an initial price applica23 bility year during 2023, at least 25 negotiation-eligi24 ble drugs described in subparagraphs (A) and (B), 

25 but not subparagraph (C), of subsection (d)(1) (or, 


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1 with respect to an initial price applicability year dur2 ing such period beginning after 2023, the maximum 

3 number (if such number is less than 25) of such ne4 gotiation-eligible drugs for the year) with respect to 

5 such year; and 

6 ‘‘(B) with respect to an initial price applica7 bility year during 2024 or a subsequent year, at 

8 least 50 negotiation-eligible drugs described in sub9 paragraphs (A) and (B), but not subparagraph (C), 

10 of subsection (d)(1) (or, with respect to an initial 

11 price applicability year during such period, the max12 imum number (if such number is less than 50) of 

13 such negotiation-eligible drugs for the year) with re14 spect to such year; 

15 ‘‘(2) all negotiation-eligible drugs described in 

16 subparagraph (C) of such subsection with respect to 

17 such year; and 

18 ‘‘(3) all new-entrant negotiation-eligible drugs 

19 (as defined in subsection (g)(1)) with respect to such 

20 year. 

21 Each drug published on the list pursuant to the previous 

22 sentence shall be subject to the negotiation process under 

23 section 1194 for the voluntary negotiation period with re24 spect to such initial price applicability year (and the re25 negotiation process under such section as applicable for 


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1 any subsequent year during the applicable price applica2 bility period). In applying this subsection, any negotiation3 eligible drug that is selected under this subsection for an 

4 initial price applicability year shall not count toward the 

5 required minimum amount of drugs to be selected under 

6 paragraph (1) for any subsequent year, including such a 

7 drug so selected that is subject to renegotiation under sec8 tion 1194. 

9 ‘‘(b) SELECTION OF DRUGS.—In carrying out sub10 section (a)(1) the Secretary shall select for inclusion on 

11 the published list described in subsection (a) with respect 

12 to a price applicability period, the negotiation-eligible 

13 drugs that the Secretary projects will result in the greatest 

14 savings to the Federal Government or fair price eligible 

15 individuals during the price applicability period. In making 

16 this projection of savings for drugs for which there is an 

17 AIM price for a price applicability period, the savings shall 

18 be projected across different dosage forms and strengths 

19 of the drugs and not based on the specific formulation or 

20 package size or package type of the drugs, taking into con21 sideration both the volume of drugs for which payment 

22 is made, to the extent such data is available, and the 

23 amount by which the net price for the drugs exceeds the 

24 AIM price for the drugs. 


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1 ‘‘(c) SELECTED DRUG.—For purposes of this part, 

2 each drug included on the list published under subsection 

3 (a) with respect to an initial price applicability year shall 

4 be referred to as a ‘selected drug’ with respect to such 

5 year and each subsequent plan year beginning before the 

6 first plan year beginning after the date on which the Sec7 retary determines two or more drug products— 

8 ‘‘(1) are approved or licensed (as applicable)— 

9 ‘‘(A) under section 505(j) of the Federal 

10 Food, Drug, and Cosmetic Act using such drug 

11 as the listed drug; or 

12 ‘‘(B) under section 351(k) of the Public 

13 Health Service Act using such drug as the ref14 erence product; and 

15 ‘‘(2) continue to be marketed. 

16 ‘‘(d) NEGOTIATION-ELIGIBLE DRUG.— 

17 ‘‘(1) IN GENERAL.—For purposes of this part, 

18 the term ‘negotiation-eligible drug’ means, with re19 spect to the selected drug publication date with re20 spect to an initial price applicability year, a quali21 fying single source drug, as defined in subsection 

22 (e), that meets any of the following criteria: 

23 ‘‘(A) COVERED PART D DRUGS.—The drug 

24 is among the 125 covered part D drugs (as de25 fined in section 1860D–2(e)) for which there 


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1 was an estimated greatest net spending under 

2 parts C and D of title XVIII, as determined by 

3 the Secretary, during the most recent plan year 

4 prior to such drug publication date for which 

5 data are available. 

6 ‘‘(B) OTHER DRUGS.—The drug is among 

7 the 125 drugs for which there was an estimated 

8 greatest net spending in the United States (in9 cluding the 50 States, the District of Columbia, 

10 and the territories of the United States), as de11 termined by the Secretary, during the most re12 cent plan year prior to such drug publication 

13 date for which data are available. 

14 ‘‘(C) INSULIN.—The drug is a qualifying 

15 single source drug described in subsection 

16 (e)(3). 

17 ‘‘(2) CLARIFICATION.—In determining whether 

18 a qualifying single source drug satisfies any of the 

19 criteria described in paragraph (1), the Secretary 

20 shall, to the extent practicable, use data that is ag21 gregated across dosage forms and strengths of the 

22 drug and not based on the specific formulation or 

23 package size or package type of the drug. 

24 ‘‘(3) PUBLICATION.—Not later than the se25 lected drug publication date with respect to an iniVerDate Sep 11 2014 23:15 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 E:\BILLS\H1425.PCS H1425

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1 tial price applicability year, the Secretary shall pub2 lish in the Federal Register a list of negotiation-eli3 gible drugs with respect to such selected drug publi4 cation date. 

5 ‘‘(e) QUALIFYING SINGLE SOURCE DRUG.—For pur6 poses of this part, the term ‘qualifying single source drug’ 

7 means any of the following: 

8 ‘‘(1) DRUG PRODUCTS.—A drug that— 

9 ‘‘(A) is approved under section 505(c) of 

10 the Federal Food, Drug, and Cosmetic Act and 

11 continues to be marketed pursuant to such ap12 proval; and 

13 ‘‘(B) is not the listed drug for any drug 

14 that is approved and continues to be marketed 

15 under section 505(j) of such Act. 

16 ‘‘(2) BIOLOGICAL PRODUCTS.—A biological 

17 product that— 

18 ‘‘(A) is licensed under section 351(a) of 

19 the Public Health Service Act, including any 

20 product that has been deemed to be licensed 

21 under section 351 of such Act pursuant to sec22 tion 7002(e)(4) of the Biologics Price Competi23 tion and Innovation Act of 2009, and continues 

24 to be marketed under section 351 of such Act; 

25 and 


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1 ‘‘(B) is not the reference product for any 

2 biological product that is licensed and continues 

3 to be marketed under section 351(k) of such 

4 Act. 

5 ‘‘(3) INSULIN PRODUCT.—Notwithstanding 

6 paragraphs (1) and (2), any insulin product that is 

7 approved under subsection (c) or (j) of section 505 

8 of the Federal Food, Drug, and Cosmetic Act or li9 censed under subsection (a) or (k) of section 351 of 

10 the Public Health Service Act and continues to be 

11 marketed under such section 505 or 351, including 

12 any insulin product that has been deemed to be li13 censed under section 351(a) of the Public Health 

14 Service Act pursuant to section 7002(e)(4) of the 

15 Biologics Price Competition and Innovation Act of 

16 2009 and continues to be marketed pursuant to such 

17 licensure. 

18 For purposes of applying paragraphs (1) and (2), a drug 

19 or biological product that is marketed by the same sponsor 

20 or manufacturer (or an affiliate thereof or a cross-licensed 

21 producer or distributor) as the listed drug or reference 

22 product described in such respective paragraph shall not 

23 be taken into consideration. 

24 ‘‘(f) INFORMATION ON INTERNATIONAL DRUG

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1 eligible drugs to select under subsection (a) and, in the 

2 case of such drugs that are selected drugs, to determine 

3 the maximum fair price for such a drug and whether such 

4 maximum fair price should be renegotiated under section 

5 1194, the Secretary shall use data relating to the AIM 

6 price with respect to such drug as available or provided 

7 to the Secretary and shall on an ongoing basis request 

8 from manufacturers of selected drugs information on the 

9 AIM price of such a drug. 

10 ‘‘(g) NEW-ENTRANT NEGOTIATION-ELIGIBLE

11 DRUGS.— 

12 ‘‘(1) IN GENERAL.—For purposes of this part, 

13 the term ‘new-entrant negotiation-eligible drug’ 

14 means, with respect to the selected drug publication 

15 date with respect to an initial price applicability 

16 year, a qualifying single source drug— 

17 ‘‘(A) that is first approved or licensed, as 

18 described in paragraph (1), (2), or (3) of sub19 section (e), as applicable, during the year pre20 ceding such selected drug publication date; and 

21 ‘‘(B) that the Secretary determines under 

22 paragraph (2) is likely to be included as a nego23 tiation-eligible drug with respect to the subse24 quent selected drug publication date. 


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1 ‘‘(2) DETERMINATION.—In the case of a quali2 fying single source drug that meets the criteria de3 scribed in subparagraph (A) of paragraph (1), with 

4 respect to an initial price applicability year, if the 

5 wholesale acquisition cost at which such drug is first 

6 marketed in the United States is equal to or greater 

7 than the median household income (as determined 

8 according to the most recent data collected by the 

9 United States Census Bureau), the Secretary shall 

10 determine before the selected drug publication date 

11 with respect to the initial price applicability year, if 

12 the drug is likely to be included as a negotiation-eli13 gible drug with respect to the subsequent selected 

14 drug publication date, based on the projected spend15 ing under title XVIII or in the United States on 

16 such drug. For purposes of this paragraph the term 

17 ‘United States’ includes the 50 States, the District 

18 of Columbia, and the territories of the United 

19 States. 

20 ‘‘(h) CONFLICT OF INTEREST.— 

21 ‘‘(1) IN GENERAL.—In the case the Inspector 

22 General of the Department of Health and Human 

23 Services determines the Secretary has a conflict, 

24 with respect to a matter described in paragraph (2), 

25 the individual described in paragraph (3) shall carry 


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1 out the duties of the Secretary under this part, with 

2 respect to a negotiation-eligible drug, that would 

3 otherwise be such a conflict. 

4 ‘‘(2) MATTER DESCRIBED.—A matter described 

5 in this paragraph is— 

6 ‘‘(A) a financial interest (as described in 

7 section 2635.402 of title 5, Code of Federal 

8 Regulations (except for an interest described in 

9 subsection (b)(2)(iv) of such section)) on the 

10 date of the selected drug publication date, with 

11 respect the price applicability year (as applica12 ble); 

13 ‘‘(B) a personal or business relationship 

14 (as described in section 2635.502 of such title) 

15 on the date of the selected drug publication 

16 date, with respect the price applicability year; 

17 ‘‘(C) employment by a manufacturer of a 

18 negotiation-eligible drug during the preceding 

19 10-year period beginning on the date of the se20 lected drug publication date, with respect to 

21 each price applicability year; and 

22 ‘‘(D) any other matter the General Counsel 

23 determines appropriate. 

24 ‘‘(3) INDIVIDUAL DESCRIBED.—An individual 

25 described in this paragraph is— 


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1 ‘‘(A) the highest-ranking officer or em2 ployee of the Department of Health and 

3 Human Services (as determined by the organi4 zational chart of the Department) that does not 

5 have a conflict under this subsection; and 

6 ‘‘(B) is nominated by the President and 

7 confirmed by the Senate with respect to the po8 sition. 

9 ‘‘SEC. 1193. MANUFACTURER AGREEMENTS. 

10 ‘‘(a) IN GENERAL.—For purposes of section 

11 1191(a)(2), the Secretary shall enter into agreements with 

12 manufacturers of selected drugs with respect to a price 

13 applicability period, by not later than June 15 following 

14 the selected drug publication date with respect to such se15 lected drug, under which— 

16 ‘‘(1) during the voluntary negotiation period for 

17 the initial price applicability year for the selected 

18 drug, the Secretary and manufacturer, in accordance 

19 with section 1194, negotiate to determine (and, by 

20 not later than the last date of such period and in ac21 cordance with subsection (c), agree to) a maximum 

22 fair price for such selected drug of the manufacturer 

23 in order to provide access to such price— 

24 ‘‘(A) to fair price eligible individuals who 

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1 paragraph (A) of section 1191(c)(1) and are 

2 furnished or dispensed such drug during, sub3 ject to subparagraph (2), the price applicability 

4 period; and 

5 ‘‘(B) to hospitals, physicians, and other 

6 providers of services and suppliers with respect 

7 to fair price eligible individuals who with re8 spect to such drug are described in subpara9 graph (B) of such section and are furnished or 

10 administered such drug during, subject to sub11 paragraph (2), the price applicability period; 

12 ‘‘(2) the Secretary and the manufacturer shall, 

13 in accordance with a process and during a period 

14 specified by the Secretary pursuant to rulemaking, 

15 renegotiate (and, by not later than the last date of 

16 such period and in accordance with subsection (c), 

17 agree to) the maximum fair price for such drug if 

18 the Secretary determines that there is a material 

19 change in any of the factors described in section 

20 1194(d) relating to the drug, including changes in 

21 the AIM price for such drug, in order to provide ac22 cess to such maximum fair price (as so renegoti23 ated)— 

24 ‘‘(A) to fair price eligible individuals who 

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1 paragraph (A) of section 1191(c)(1) and are 

2 furnished or dispensed such drug during any 

3 year during the price applicability period (be4 ginning after such renegotiation) with respect 

5 to such selected drug; and 

6 ‘‘(B) to hospitals, physicians, and other 

7 providers of services and suppliers with respect 

8 to fair price eligible individuals who with re9 spect to such drug are described in subpara10 graph (B) of such section and are furnished or 

11 administered such drug during any year de12 scribed in subparagraph (A); 

13 ‘‘(3) the maximum fair price (including as re14 negotiated pursuant to paragraph (2)), with respect 

15 to such a selected drug, shall be provided to fair 

16 price eligible individuals, who with respect to such 

17 drug are described in subparagraph (A) of section 

18 1191(c)(1), at the pharmacy or by a mail order serv19 ice at the point-of-sale of such drug; 

20 ‘‘(4) the manufacturer, subject to subsection 

21 (d), submits to the Secretary, in a form and manner 

22 specified by the Secretary— 

23 ‘‘(A) for the voluntary negotiation period 

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1 fied pursuant to paragraph (2)) with respect to 

2 such drug all information that the Secretary re3 quires to carry out the negotiation (or renegoti4 ation process) under this part, including infor5 mation described in section 1192(f) and section 

6 1194(d)(1); and 

7 ‘‘(B) on an ongoing basis, information on 

8 changes in prices for such drug that would af9 fect the AIM price for such drug or otherwise 

10 provide a basis for renegotiation of the max11 imum fair price for such drug pursuant to 

12 paragraph (2); 

13 ‘‘(5) the manufacturer agrees that in the case 

14 the selected drug of a manufacturer is a drug de15 scribed in subsection (c), the manufacturer will, in 

16 accordance with such subsection, make any payment 

17 required under such subsection with respect to such 

18 drug; and 

19 ‘‘(6) the manufacturer complies with require20 ments imposed by the Secretary for purposes of ad21 ministering the program, including with respect to 

22 the duties described in section 1196. 

23 ‘‘(b) AGREEMENT IN EFFECT UNTIL DRUG IS NO

24 LONGER A SELECTED DRUG.—An agreement entered into 

25 under this section shall be effective, with respect to a drug, 


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1 until such drug is no longer considered a selected drug 

2 under section 1192(c). 

3 ‘‘(c) SPECIAL RULE FOR CERTAIN SELECTED DRUGS

4 WITHOUT AIM PRICE.— 

5 ‘‘(1) IN GENERAL.—In the case of a selected 

6 drug for which there is no AIM price available with 

7 respect to the initial price applicability year for such 

8 drug and for which an AIM price becomes available 

9 beginning with respect to a subsequent plan year 

10 during the price applicability period for such drug, 

11 if the Secretary determines that the amount de12 scribed in paragraph (2)(A) for a unit of such drug 

13 is greater than the amount described in paragraph 

14 (2)(B) for a unit of such drug, then by not later 

15 than one year after the date of such determination, 

16 the manufacturer of such selected drug shall pay to 

17 the Treasury an amount equal to the product of— 

18 ‘‘(A) the difference between such amount 

19 described in paragraph (2)(A) for a unit of 

20 such drug and such amount described in para21 graph (2)(B) for a unit of such drug; and 

22 ‘‘(B) the number of units of such drug sold 

23 in the United States, including the 50 States, 

24 the District of Columbia, and the territories of 


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1 the United States, during the period described 

2 in paragraph (2)(B). 

3 ‘‘(2) AMOUNTS DESCRIBED.— 

4 ‘‘(A) WEIGHTED AVERAGE PRICE BEFORE

5 AIM PRICE AVAILABLE.—For purposes of para6 graph (1), the amount described in this sub7 paragraph for a selected drug described in such 

8 paragraph, is the amount equal to the weighted 

9 average manufacturer price (as defined in sec10 tion 1927(k)(1)) for such dosage strength and 

11 form for the drug during the period beginning 

12 with the first plan year for which the drug is 

13 included on the list of negotiation-eligible drugs 

14 published under section 1192(d) and ending 

15 with the last plan year during the price applica16 bility period for such drug with respect to which 

17 there is no AIM price available for such drug. 

18 ‘‘(B) AMOUNT MULTIPLIER AFTER AIM

19 PRICE AVAILABLE.—For purposes of paragraph 

20 (1), the amount described in this subparagraph 

21 for a selected drug described in such paragraph, 

22 is the amount equal to 200 percent of the AIM 

23 price for such drug with respect to the first 

24 plan year during the price applicability period 


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1 for such drug with respect to which there is an 

2 AIM price available for such drug. 

3 ‘‘(d) CONFIDENTIALITY OF INFORMATION.—Infor4 mation submitted to the Secretary under this part by a 

5 manufacturer of a selected drug that is proprietary infor6 mation of such manufacturer (as determined by the Sec7 retary) may be used only by the Secretary or disclosed 

8 to and used by the Comptroller General of the United 

9 States or the Medicare Payment Advisory Commission for 

10 purposes of carrying out this part. 

11 ‘‘(e) REGULATIONS.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall, pursu13 ant to rulemaking, specify, in accordance with para14 graph (2), the information that must be submitted 

15 under subsection (a)(4). 

16 ‘‘(2) INFORMATION SPECIFIED.—Information 

17 described in paragraph (1), with respect to a se18 lected drug, shall include information on sales of the 

19 drug (by the manufacturer of the drug or by another 

20 entity under license or other agreement with the 

21 manufacturer, with respect to the sales of such drug, 

22 regardless of the name under which the drug is sold) 

23 in any foreign country that is part of the AIM price. 

24 The Secretary shall verify, to the extent practicable, 


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1 such sales from appropriate officials of the govern2 ment of the foreign country involved. 

3 ‘‘(f) COMPLIANCE WITH REQUIREMENTS FOR AD4 MINISTRATION OF PROGRAM.—Each manufacturer with 

5 an agreement in effect under this section shall comply with 

6 requirements imposed by the Secretary or a third party 

7 with a contract under section 1196(c)(1), as applicable, 

8 for purposes of administering the program. 

9 ‘‘SEC. 1194. NEGOTIATION AND RENEGOTIATION PROCESS. 

10 ‘‘(a) IN GENERAL.—For purposes of this part, under 

11 an agreement under section 1193 between the Secretary 

12 and a manufacturer of a selected drug, with respect to 

13 the period for which such agreement is in effect and in 

14 accordance with subsections (b) and (c), the Secretary and 

15 the manufacturer— 

16 ‘‘(1) shall during the voluntary negotiation pe17 riod with respect to the initial price applicability 

18 year for such drug, in accordance with this section, 

19 negotiate a maximum fair price for such drug for 

20 the purpose described in section 1193(a)(1); and 

21 ‘‘(2) as applicable pursuant to section 

22 1193(a)(2) and in accordance with the process speci23 fied pursuant to such section, renegotiate such max24 imum fair price for such drug for the purpose de25 scribed in such section. 


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1 ‘‘(b) NEGOTIATING METHODOLOGY AND OBJEC2 TIVE.— 

3 ‘‘(1) IN GENERAL.—The Secretary shall develop 

4 and use a consistent methodology for negotiations 

5 under subsection (a) that, in accordance with para6 graph (2) and subject to paragraph (3), achieves the 

7 lowest maximum fair price for each selected drug 

8 while appropriately rewarding innovation. 

9 ‘‘(2) PRIORITIZING FACTORS.—In considering 

10 the factors described in subsection (d) in negotiating 

11 (and, as applicable, renegotiating) the maximum fair 

12 price for a selected drug, the Secretary shall, to the 

13 extent practicable, consider all of the available fac14 tors listed but shall prioritize the following factors: 

15 ‘‘(A) RESEARCH AND DEVELOPMENT

16 COSTS.—The factor described in paragraph 

17 (1)(A) of subsection (d). 

18 ‘‘(B) MARKET DATA.—The factor de19 scribed in paragraph (1)(B) of such subsection. 

20 ‘‘(C) UNIT COSTS OF PRODUCTION AND

21 DISTRIBUTION.—The factor described in para22 graph (1)(C) of such subsection. 

23 ‘‘(D) COMPARISON TO EXISTING THERA24 PEUTIC ALTERNATIVES.—The factor described 

25 in paragraph (2)(A) of such subsection. 


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1 ‘‘(3) REQUIREMENT.— 

2 ‘‘(A) IN GENERAL.—In negotiating the 

3 maximum fair price of a selected drug, with re4 spect to an initial price applicability year for 

5 the selected drug, and, as applicable, in renego6 tiating the maximum fair price for such drug, 

7 with respect to a subsequent year during the 

8 price applicability period for such drug, in the 

9 case that the manufacturer of the selected drug 

10 offers under the negotiation or renegotiation, as 

11 applicable, a price for such drug that is not 

12 more than the target price described in sub13 paragraph (B) for such drug for the respective 

14 year, the Secretary shall agree under such ne15 gotiation or renegotiation, respectively, to such 

16 offered price as the maximum fair price. 

17 ‘‘(B) TARGET PRICE.— 

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

19 (ii), the target price described in this sub20 paragraph for a selected drug with respect 

21 to a year, is the average price (which shall 

22 be the net average price, if practicable, and 

23 volume-weighted, if practicable) for a unit 

24 of such drug for sales of such drug, as 

25 computed (across different dosage forms 


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1 and strengths of the drug and not based 

2 on the specific formulation or package size 

3 or package type of the drug) in the appli4 cable country described in section 

5 1191(c)(3)(B) with respect to such drug 

6 that, with respect to such year, has the 

7 lowest average price for such drug as com8 pared to the average prices (as so com9 puted) of such drug with respect to such 

10 year in the other applicable countries de11 scribed in such section with respect to such 

12 drug. 

13 ‘‘(ii) SELECTED DRUGS WITHOUT AIM

14 PRICE.—In applying this paragraph in the 

15 case of negotiating the maximum fair price 

16 of a selected drug for which there is no 

17 AIM price available with respect to the ini18 tial price applicability year for such drug, 

19 or, as applicable, renegotiating the max20 imum fair price for such drug with respect 

21 to a subsequent year during the price ap22 plicability period for such drug before the 

23 first plan year for which there is an AIM 

24 price available for such drug, the target 

25 price described in this subparagraph for 


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1 such drug and respective year is the 

2 amount that is 80 percent of the average 

3 manufacturer price (as defined in section 

4 1927(k)(1)) for such drug and year. 

5 ‘‘(4) ANNUAL REPORT.—After the completion 

6 of each voluntary negotiation period, the Secretary 

7 shall submit to Congress a report on the maximum 

8 fair prices negotiated (or, as applicable, renegoti9 ated) for such period. Such report shall include in10 formation on how such prices so negotiated (or re11 negotiated) meet the requirements of this part, in12 cluding the requirements of this subsection. 

13 ‘‘(c) LIMITATION.— 

14 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

15 the maximum fair price negotiated (including as re16 negotiated) under this section for a selected drug, 

17 with respect to each plan year during a price appli18 cability period for such drug, shall not exceed 120 

19 percent of the AIM price applicable to such drug 

20 with respect to such year. 

21 ‘‘(2) SELECTED DRUGS WITHOUT AIM PRICE.— 

22 In the case of a selected drug for which there is no 

23 AIM price available with respect to the initial price 

24 applicability year for such drug, for each plan year 

25 during the price applicability period before the first 


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1 plan year for which there is an AIM price available 

2 for such drug, the maximum fair price negotiated 

3 (including as renegotiated) under this section for the 

4 selected drug shall not exceed the amount equal to 

5 85 percent of the average manufacturer price for the 

6 drug with respect to such year. 

7 ‘‘(d) CONSIDERATIONS.—For purposes of negotiating 

8 and, as applicable, renegotiating (including for purposes 

9 of determining whether to renegotiate) the maximum fair 

10 price of a selected drug under this part with the manufac11 turer of the drug, the Secretary, consistent with sub12 section (b)(2), shall take into consideration the factors de13 scribed in paragraphs (1), (2), (3), and (5), and may take 

14 into consideration the factor described in paragraph (4): 

15 ‘‘(1) MANUFACTURER-SPECIFIC INFORMA16 TION.—The following information, including as sub17 mitted by the manufacturer: 

18 ‘‘(A) Research and development costs of 

19 the manufacturer for the drug and the extent to 

20 which the manufacturer has recouped research 

21 and development costs. 

22 ‘‘(B) Market data for the drug, including 

23 the distribution of sales across different pro24 grams and purchasers and projected future rev25 enues for the drug. 


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1 ‘‘(C) Unit costs of production and distribu2 tion of the drug. 

3 ‘‘(D) Prior Federal financial support for 

4 novel therapeutic discovery and development 

5 with respect to the drug. 

6 ‘‘(E) Data on patents and on existing and 

7 pending exclusivity for the drug. 

8 ‘‘(F) National sales data for the drug. 

9 ‘‘(G) Information on clinical trials for the 

10 drug in the United States or in applicable coun11 tries described in section 1191(c)(3)(B). 

12 ‘‘(2) INFORMATION ON ALTERNATIVE PROD13 UCTS.—The following information: 

14 ‘‘(A) The extent to which the drug rep15 resents a therapeutic advance as compared to 

16 existing therapeutic alternatives and, to the ex17 tent such information is available, the costs of 

18 such existing therapeutic alternatives. 

19 ‘‘(B) Information on approval by the Food 

20 and Drug Administration of alternative drug 

21 products. 

22 ‘‘(C) Information on comparative effective23 ness analysis for such products, taking into 

24 consideration the effects of such products on 

25 specific populations, such as individuals with 


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1 disabilities, the elderly, terminally ill, children, 

2 and other patient populations. 

3 In considering information described in subpara4 graph (C), the Secretary shall not use evidence or 

5 findings from comparative clinical effectiveness re6 search in a manner that treats extending the life of 

7 an elderly, disabled, or terminally ill individual as of 

8 lower value than extending the life of an individual 

9 who is younger, nondisabled, or not terminally ill. 

10 Nothing in the previous sentence shall affect the ap11 plication or consideration of an AIM price for a se12 lected drug. 

13 ‘‘(3) FOREIGN SALES INFORMATION.—To the 

14 extent available on a timely basis, including as pro15 vided by a manufacturer of the selected drug or oth16 erwise, information on sales of the selected drug in 

17 each of the countries described in section 

18 1191(c)(3)(B). 

19 ‘‘(4) VA DRUG PRICING INFORMATION.—Infor20 mation disclosed to the Secretary pursuant to sub21 section (f). 

22 ‘‘(5) ADDITIONAL INFORMATION.—Information 

23 submitted to the Secretary, in accordance with a 

24 process specified by the Secretary, by other parties 


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1 that are affected by the establishment of a maximum 

2 fair price for the selected drug. 

3 ‘‘(e) REQUEST FOR INFORMATION.—For purposes of 

4 negotiating and, as applicable, renegotiating (including for 

5 purposes of determining whether to renegotiate) the max6 imum fair price of a selected drug under this part with 

7 the manufacturer of the drug, with respect to a price ap8 plicability period, and other relevant data for purposes of 

9 this section— 

10 ‘‘(1) the Secretary shall, not later than the se11 lected drug publication date with respect to the ini12 tial price applicability year of such period, request 

13 drug pricing information from the manufacturer of 

14 such selected drug, including information described 

15 in subsection (d)(1); and 

16 ‘‘(2) by not later than October 1 following the 

17 selected drug publication date, the manufacturer of 

18 such selected drug shall submit to the Secretary 

19 such requested information in such form and man20 ner as the Secretary may require. 

21 The Secretary shall request, from the manufacturer or 

22 others, such additional information as may be needed to 

23 carry out the negotiation and renegotiation process under 

24 this section. 


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1 ‘‘(f) DISCLOSURE OF INFORMATION.—For purposes 

2 of this part, the Secretary of Veterans Affairs may disclose 

3 to the Secretary of Health and Human Services the price 

4 of any negotiation-eligible drug that is purchased pursuant 

5 to section 8126 of title 38, United States Code. 

6 ‘‘SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES. 

7 ‘‘(a) IN GENERAL.—With respect to an initial price 

8 applicability year and selected drug with respect to such 

9 year, not later than April 1 of the plan year prior to such 

10 initial price applicability year, the Secretary shall publish 

11 in the Federal Register the maximum fair price for such 

12 drug negotiated under this part with the manufacturer of 

13 such drug. 

14 ‘‘(b) UPDATES.— 

15 ‘‘(1) SUBSEQUENT YEAR MAXIMUM FAIR

16 PRICES.—For a selected drug, for each plan year 

17 subsequent to the initial price applicability year for 

18 such drug with respect to which an agreement for 

19 such drug is in effect under section 1193, the Sec20 retary shall publish in the Federal Register— 

21 ‘‘(A) subject to subparagraph (B), the 

22 amount equal to the maximum fair price pub23 lished for such drug for the previous year, in24 creased by the annual percentage increase in 

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1 sumers (all items; U.S. city average) as of Sep2 tember of such previous year; or 

3 ‘‘(B) in the case the maximum fair price 

4 for such drug was renegotiated, for the first 

5 year for which such price as so renegotiated ap6 plies, such renegotiated maximum fair price. 

7 ‘‘(2) PRICES NEGOTIATED AFTER DEADLINE.— 

8 In the case of a selected drug with respect to an ini9 tial price applicability year for which the maximum 

10 fair price is determined under this part after the 

11 date of publication under this section, the Secretary 

12 shall publish such maximum fair price in the Fed13 eral Register by not later than 30 days after the 

14 date such maximum price is so determined. 

15 ‘‘SEC. 1196. ADMINISTRATIVE DUTIES; COORDINATION PRO16 VISIONS. 

17 ‘‘(a) ADMINISTRATIVE DUTIES.— 

18 ‘‘(1) IN GENERAL.—For purposes of section 

19 1191, the administrative duties described in this sec20 tion are the following: 

21 ‘‘(A) The establishment of procedures (in22 cluding through agreements with manufacturers 

23 under this part, contracts with prescription 

24 drug plans under part D of title XVIII and 

25 MA–PD plans under part C of such title, and 


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1 agreements under section 1197 with group 

2 health plans and health insurance issuers of 

3 health insurance coverage offered in the indi4 vidual or group market) under which the max5 imum fair price for a selected drug is provided 

6 to fair price eligible individuals, who with re7 spect to such drug are described in subpara8 graph (A) of section 1191(c)(1), at pharmacies 

9 or by mail order service at the point-of-sale of 

10 the drug for the applicable price period for such 

11 drug and providing that such maximum fair 

12 price is used for determining cost-sharing under 

13 such plans or coverage for the selected drug. 

14 ‘‘(B) The establishment of procedures (in15 cluding through agreements with manufacturers 

16 under this part and contracts with hospitals, 

17 physicians, and other providers of services and 

18 suppliers and agreements under section 1197 

19 with group health plans and health insurance 

20 issuers of health insurance coverage offered in 

21 the individual or group market) under which, in 

22 the case of a selected drug furnished or admin23 istered by such a hospital, physician, or other 

24 provider of services or supplier to fair price eli25 gible individuals (who with respect to such drug 


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1 are described in subparagraph (B) of section 

2 1191(c)(1)), the maximum fair price for the se3 lected drug is provided to such hospitals, physi4 cians, and other providers of services and sup5 pliers (as applicable) with respect to such indi6 viduals and providing that such maximum fair 

7 price is used for determining cost-sharing under 

8 the respective part, plan, or coverage for the se9 lected drug. 

10 ‘‘(C) The establishment of procedures (in11 cluding through agreements and contracts de12 scribed in subparagraphs (A) and (B)) to en13 sure that, not later than 90 days after the dis14 pensing of a selected drug to a fair price eligi15 ble individual by a pharmacy or mail order serv16 ice, the pharmacy or mail order service is reim17 bursed for an amount equal to the difference 

18 between— 

19 ‘‘(i) the lesser of— 

20 ‘‘(I) the wholesale acquisition 

21 cost of the drug; 

22 ‘‘(II) the national average drug 

23 acquisition cost of the drug; and 

24 ‘‘(III) any other similar deter25 mination of pharmacy acquisition 


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1 costs of the drug, as determined by 

2 the Secretary; and 

3 ‘‘(ii) the maximum fair price for the 

4 drug. 

5 ‘‘(D) The establishment of procedures to 

6 ensure that the maximum fair price for a se7 lected drug is applied before— 

8 ‘‘(i) any coverage or financial assist9 ance under other health benefit plans or 

10 programs that provide coverage or finan11 cial assistance for the purchase or provi12 sion of prescription drug coverage on be13 half of fair price eligible individuals as the 

14 Secretary may specify; and 

15 ‘‘(ii) any other discounts. 

16 ‘‘(E) The establishment of procedures to 

17 enter into appropriate agreements and protocols 

18 for the ongoing computation of AIM prices for 

19 selected drugs, including, to the extent possible, 

20 to compute the AIM price for selected drugs 

21 and including by providing that the manufac22 turer of such a selected drug should provide in23 formation for such computation not later than 

24 3 months after the first date of the voluntary 

25 negotiation period for such selected drug. 


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1 ‘‘(F) The establishment of procedures to 

2 compute and apply the maximum fair price 

3 across different strengths and dosage forms of 

4 a selected drug and not based on the specific 

5 formulation or package size or package type of 

6 the drug. 

7 ‘‘(G) The establishment of procedures to 

8 negotiate and apply the maximum fair price in 

9 a manner that does not include any dispensing 

10 or similar fee. 

11 ‘‘(H) The establishment of procedures to 

12 carry out the provisions of this part, as applica13 ble, with respect to— 

14 ‘‘(i) fair price eligible individuals who 

15 are enrolled under a prescription drug plan 

16 under part D of title XVIII or an MA–PD 

17 plan under part C of such title; 

18 ‘‘(ii) fair price eligible individuals who 

19 are enrolled under a group health plan or 

20 health insurance coverage offered by a 

21 health insurance issuer in the individual or 

22 group market with respect to which there 

23 is an agreement in effect under section 

24 1197; and 


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1 ‘‘(iii) fair price eligible individuals who 

2 are entitled to benefits under part A of 

3 title XVIII or enrolled under part B of 

4 such title. 

5 ‘‘(I) The establishment of a negotiation 

6 process and renegotiation process in accordance 

7 with section 1194, including a process for ac8 quiring information described in subsection (d) 

9 of such section and determining amounts de10 scribed in subsection (b) of such section. 

11 ‘‘(J) The provision of a reasonable dispute 

12 resolution mechanism to resolve disagreements 

13 between manufacturers, fair price eligible indi14 viduals, and the third party with a contract 

15 under subsection (c)(1). 

16 ‘‘(2) MONITORING COMPLIANCE.— 

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

18 monitor compliance by a manufacturer with the 

19 terms of an agreement under section 1193, in20 cluding by establishing a mechanism through 

21 which violations of such terms may be reported. 

22 ‘‘(B) NOTIFICATION.—If a third party 

23 with a contract under subsection (c)(1) deter24 mines that the manufacturer is not in compli25 ance with such agreement, the third party shall 


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1 notify the Secretary of such noncompliance for 

2 appropriate enforcement under section 4192 of 

3 the Internal Revenue Code of 1986 or section 

4 1198, as applicable. 

5 ‘‘(b) COLLECTION OF DATA.— 

6 ‘‘(1) FROM PRESCRIPTION DRUG PLANS AND

7 MA–PD PLANS.—The Secretary may collect appro8 priate data from prescription drug plans under part 

9 D of title XVIII and MA–PD plans under part C of 

10 such title in a timeframe that allows for maximum 

11 fair prices to be provided under this part for selected 

12 drugs. 

13 ‘‘(2) FROM HEALTH PLANS.—The Secretary 

14 may collect appropriate data from group health 

15 plans or health insurance issuers offering group or 

16 individual health insurance coverage in a timeframe 

17 that allows for maximum fair prices to be provided 

18 under this part for selected drugs. 

19 ‘‘(3) COORDINATION OF DATA COLLECTION.— 

20 To the extent feasible, as determined by the Sec21 retary, the Secretary shall ensure that data collected 

22 pursuant to this subsection is coordinated with, and 

23 not duplicative of, other Federal data collection ef24 forts. 

25 ‘‘(c) CONTRACT WITH THIRD PARTIES.— 


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1 ‘‘(1) IN GENERAL.—The Secretary may enter 

2 into a contract with 1 or more third parties to ad3 minister the requirements established by the Sec4 retary in order to carry out this part. At a min5 imum, the contract with a third party under the pre6 ceding sentence shall require that the third party— 

7 ‘‘(A) receive and transmit information be8 tween the Secretary, manufacturers, and other 

9 individuals or entities the Secretary determines 

10 appropriate; 

11 ‘‘(B) receive, distribute, or facilitate the 

12 distribution of funds of manufacturers to ap13 propriate individuals or entities in order to 

14 meet the obligations of manufacturers under 

15 agreements under this part; 

16 ‘‘(C) provide adequate and timely informa17 tion to manufacturers, consistent with the 

18 agreement with the manufacturer under this 

19 part, as necessary for the manufacturer to ful20 fill its obligations under this part; and 

21 ‘‘(D) permit manufacturers to conduct 

22 periodic audits, directly or through contracts, of 

23 the data and information used by the third 

24 party to determine discounts for applicable 

25 drugs of the manufacturer under the program. 


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1 ‘‘(2) PERFORMANCE REQUIREMENTS.—The 

2 Secretary shall establish performance requirements 

3 for a third party with a contract under paragraph 

4 (1) and safeguards to protect the independence and 

5 integrity of the activities carried out by the third 

6 party under the program under this part. 

7 ‘‘SEC. 1197. VOLUNTARY PARTICIPATION BY OTHER 

8 HEALTH PLANS. 

9 ‘‘(a) AGREEMENT TO PARTICIPATE UNDER PRO10 GRAM.— 

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

12 under the program under this part the Secretary 

13 shall be treated as having in effect an agreement 

14 with a group health plan or health insurance issuer 

15 offering group or individual health insurance cov16 erage (as such terms are defined in section 2791 of 

17 the Public Health Service Act), with respect to a 

18 price applicability period and a selected drug with 

19 respect to such period— 

20 ‘‘(A) with respect to such selected drug 

21 furnished or dispensed at a pharmacy or by 

22 mail order service if coverage is provided under 

23 such plan or coverage during such period for 

24 such selected drug as so furnished or dispensed; 

25 and 


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1 ‘‘(B) with respect to such selected drug 

2 furnished or administered by a hospital, physi3 cian, or other provider of services or supplier if 

4 coverage is provided under such plan or cov5 erage during such period for such selected drug 

6 as so furnished or administered. 

7 ‘‘(2) OPTING OUT OF AGREEMENT.—The Sec8 retary shall not be treated as having in effect an 

9 agreement under the program under this part with 

10 a group health plan or health insurance issuer offer11 ing group or individual health insurance coverage 

12 with respect to a price applicability period and a se13 lected drug with respect to such period if such a 

14 plan or issuer affirmatively elects, through a process 

15 specified by the Secretary, not to participate under 

16 the program with respect to such period and drug. 

17 ‘‘(b) PUBLICATION OF ELECTION.—With respect to 

18 each price applicability period and each selected drug with 

19 respect to such period, the Secretary and the Secretary 

20 of Labor and the Secretary of the Treasury, as applicable, 

21 shall make public a list of each group health plan and each 

22 health insurance issuer offering group or individual health 

23 insurance coverage, with respect to which coverage is pro24 vided under such plan or coverage for such drug, that has 


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1 elected under subsection (a) not to participate under the 

2 program with respect to such period and drug. 

3 ‘‘SEC. 1198. CIVIL MONETARY PENALTY. 

4 ‘‘(a) VIOLATIONS RELATING TO OFFERING OF MAX5 IMUM FAIR PRICE.—Any manufacturer of a selected drug 

6 that has entered into an agreement under section 1193, 

7 with respect to a plan year during the price applicability 

8 period for such drug, that does not provide access to a 

9 price that is not more than the maximum fair price (or 

10 a lesser price) for such drug for such year— 

11 ‘‘(1) to a fair price eligible individual who with 

12 respect to such drug is described in subparagraph 

13 (A) of section 1191(c)(1) and who is furnished or 

14 dispensed such drug during such year; or 

15 ‘‘(2) to a hospital, physician, or other provider 

16 of services or supplier with respect to fair price eligi17 ble individuals who with respect to such drug is de18 scribed in subparagraph (B) of such section and is 

19 furnished or administered such drug by such hos20 pital, physician, or provider or supplier during such 

21 year; 

22 shall be subject to a civil monetary penalty equal to ten 

23 times the amount equal to the difference between the price 

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1 cian, provider, or supplier and the maximum fair price for 

2 such drug for such year. 

3 ‘‘(b) VIOLATIONS OF CERTAIN TERMS OF AGREE4 MENT.—Any manufacturer of a selected drug that has en5 tered into an agreement under section 1193, with respect 

6 to a plan year during the price applicability period for 

7 such drug, that is in violation of a requirement imposed 

8 pursuant to section 1193(a)(6) shall be subject to a civil 

9 monetary penalty of not more than $1,000,000 for each 

10 such violation. 

11 ‘‘(c) APPLICATION.—The provisions of section 1128A 

12 (other than subsections (a) and (b)) shall apply to a civil 

13 monetary penalty under this section in the same manner 

14 as such provisions apply to a penalty or proceeding under 

15 section 1128A(a). 

16 ‘‘SEC. 1199. MISCELLANEOUS PROVISIONS. 

17 ‘‘(a) PAPERWORK REDUCTION ACT.—Chapter 35 of 

18 title 44, United States Code, shall not apply to data col19 lected under this part. 

20 ‘‘(b) NATIONAL ACADEMY OF MEDICINE STUDY.— 

21 Not later than December 31, 2025, the National Academy 

22 of Medicine shall conduct a study, and submit to Congress 

23 a report, on recommendations for improvements to the 

24 program under this part, including the determination of 

25 the limits applied under section 1194(c). 


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1 ‘‘(c) MEDPAC STUDY.—Not later than December 31, 

2 2025, the Medicare Payment Advisory Commission shall 

3 conduct a study, and submit to Congress a report, on the 

4 program under this part with respect to the Medicare pro5 gram under title XVIII, including with respect to the ef6 fect of the program on individuals entitled to benefits or 

7 enrolled under such title. 

8 ‘‘(d) LIMITATION ON JUDICIAL REVIEW.—The fol9 lowing shall not be subject to judicial review: 

10 ‘‘(1) The selection of drugs for publication 

11 under section 1192(a). 

12 ‘‘(2) The determination of whether a drug is a 

13 negotiation-eligible drug under section 1192(d). 

14 ‘‘(3) The determination of the maximum fair 

15 price of a selected drug under section 1194. 

16 ‘‘(4) The determination of units of a drug for 

17 purposes of section 1191(c)(3). 

18 ‘‘(e) COORDINATION.—In carrying out this part with 

19 respect to group health plans or health insurance coverage 

20 offered in the group market that are subject to oversight 

21 by the Secretary of Labor or the Secretary of the Treas22 ury, the Secretary of Health and Human Services shall 

23 coordinate with such respective Secretary. 

24 ‘‘(f) DATA SHARING.—The Secretary shall share with 

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1 essary to determine the tax imposed by section 4192 of 

2 the Internal Revenue Code of 1986. 

3 ‘‘(g) GAO STUDY.—Not later than December 31, 

4 2025, the Comptroller General of the United States shall 

5 conduct a study of, and submit to Congress a report on, 

6 the implementation of the Fair Price Negotiation Program 

7 under this part.’’. 

8 (b) APPLICATION OF MAXIMUM FAIR PRICES AND

9 CONFORMING AMENDMENTS.— 

10 (1) UNDER MEDICARE.— 

11 (A) APPLICATION TO PAYMENTS UNDER

12 PART B.—Section 1847A(b)(1)(B) of the Social 

13 Security Act (42 U.S.C. 1395w–3a(b)(1)(B)) is 

14 amended by inserting ‘‘or in the case of such a 

15 drug or biological that is a selected drug (as de16 fined in section 1192(c)), with respect to a 

17 price applicability period (as defined in section 

18 1191(b)(2)), 106 percent of the maximum fair 

19 price (as defined in section 1191(c)(2) applica20 ble for such drug and a plan year during such 

21 period’’ after ‘‘paragraph (4)’’. 

22 (B) EXCEPTION TO PART D NON-INTER23 FERENCE.—Section 1860D–11(i) of the Social 

24 Security Act (42 U.S.C. 1395w–111(i)) is 


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1 amended by inserting ‘‘, except as provided 

2 under part E of title XI’’ after ‘‘the Secretary’’. 

3 (C) APPLICATION AS NEGOTIATED PRICE

4 UNDER PART D.—Section 1860D–2(d)(1) of the 

5 Social Security Act (42 U.S.C. 1395w– 

6 102(d)(1)) is amended— 

7 (i) in subparagraph (B), by inserting 

8 ‘‘, subject to subparagraph (D),’’ after 

9 ‘‘negotiated prices’’; and 

10 (ii) by adding at the end the following 

11 new subparagraph: 

12 ‘‘(D) APPLICATION OF MAXIMUM FAIR

13 PRICE FOR SELECTED DRUGS.—In applying this 

14 section, in the case of a covered part D drug 

15 that is a selected drug (as defined in section 

16 1192(c)), with respect to a price applicability 

17 period (as defined in section 1191(b)(2)), the 

18 negotiated prices used for payment (as de19 scribed in this subsection) shall be the max20 imum fair price (as defined in section 

21 1191(c)(2)) for such drug and for each plan 

22 year during such period.’’. 

23 (D) INFORMATION FROM PRESCRIPTION

24 DRUG PLANS AND MA–PD PLANS REQUIRED.— 


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1 (i) PRESCRIPTION DRUG PLANS.—Sec2 tion 1860D–12(b) of the Social Security 

3 Act (42 U.S.C. 1395w–112(b)) is amended 

4 by adding at the end the following new 

5 paragraph: 

6 ‘‘(8) PROVISION OF INFORMATION RELATED TO

7 MAXIMUM FAIR PRICES.—Each contract entered into 

8 with a PDP sponsor under this part with respect to 

9 a prescription drug plan offered by such sponsor 

10 shall require the sponsor to provide information to 

11 the Secretary as requested by the Secretary in ac12 cordance with section 1196(b).’’. 

13 (ii) MA–PD PLANS.—Section 

14 1857(f)(3) of the Social Security Act (42 

15 U.S.C. 1395w–27(f)(3)) is amended by 

16 adding at the end the following new sub17 paragraph: 

18 ‘‘(E) PROVISION OF INFORMATION RE19 LATED TO MAXIMUM FAIR PRICES.—Section 

20 1860D–12(b)(8).’’. 

21 (2) UNDER GROUP HEALTH PLANS AND

22 HEALTH INSURANCE COVERAGE.— 

23 (A) PHSA.—Part A of title XXVII of the 

24 Public Health Service Act is amended by insertVerDate Sep 11 2014 23:15 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00137 Fmt 6652 Sfmt 6201 E:\BILLS\H1425.PCS H1425

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1 ing after section 2729 the following new sec2 tion: 

3 ‘‘SEC. 2729A. FAIR PRICE NEGOTIATION PROGRAM AND AP4 PLICATION OF MAXIMUM FAIR PRICES. 

5 ‘‘(a) IN GENERAL.—In the case of a group health 

6 plan or health insurance issuer offering group or indi7 vidual health insurance coverage that is treated under sec8 tion 1197 of the Social Security Act as having in effect 

9 an agreement with the Secretary under the Fair Price Ne10 gotiation Program under part E of title XI of such Act, 

11 with respect to a price applicability period (as defined in 

12 section 1191(b) of such Act) and a selected drug (as de13 fined in section 1192(c) of such Act) with respect to such 

14 period with respect to which coverage is provided under 

15 such plan or coverage— 

16 ‘‘(1) the provisions of such part shall apply— 

17 ‘‘(A) if coverage of such selected drug is 

18 provided under such plan or coverage if the 

19 drug is furnished or dispensed at a pharmacy 

20 or by a mail order service, to the plans or cov21 erage offered by such plan or issuer, and to the 

22 individuals enrolled under such plans or cov23 erage, during such period, with respect to such 

24 selected drug, in the same manner as such pro25 visions apply to prescription drug plans and 


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1 MA–PD plans, and to individuals enrolled 

2 under such prescription drug plans and MA– 

3 PD plans during such period; and 

4 ‘‘(B) if coverage of such selected drug is 

5 provided under such plan or coverage if the 

6 drug is furnished or administered by a hospital, 

7 physician, or other provider of services or sup8 plier, to the plans or coverage offered by such 

9 plan or issuers, to the individuals enrolled 

10 under such plans or coverage, and to hospitals, 

11 physicians, and other providers of services and 

12 suppliers during such period, with respect to 

13 such drug in the same manner as such provi14 sions apply to the Secretary, to individuals enti15 tled to benefits under part A of title XVIII or 

16 enrolled under part B of such title, and to hos17 pitals, physicians, and other providers and sup18 pliers participating under title XVIII during 

19 such period; 

20 ‘‘(2) the plan or issuer shall apply any cost21 sharing responsibilities under such plan or coverage, 

22 with respect to such selected drug, by substituting 

23 an amount not more than the maximum fair price 

24 negotiated under such part E of title XI for such 

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1 sharing would have otherwise applied, and such cost2 sharing responsibilities with respect to such selected 

3 drug may not exceed such maximum fair price; and 

4 ‘‘(3) the Secretary shall apply the provisions of 

5 such part E to such plan, issuer, and coverage, such 

6 individuals so enrolled in such plans and coverage, 

7 and such hospitals, physicians, and other providers 

8 and suppliers participating in such plans and cov9 erage. 

10 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION

11 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health 

12 plan or a health insurance issuer offering group or indi13 vidual health insurance coverage shall publicly disclose in 

14 a manner and in accordance with a process specified by 

15 the Secretary any election made under section 1197 of the 

16 Social Security Act by the plan or issuer to not participate 

17 in the Fair Price Negotiation Program under part E of 

18 title XI of such Act with respect to a selected drug (as 

19 defined in section 1192(c) of such Act) for which coverage 

20 is provided under such plan or coverage before the begin21 ning of the plan year for which such election was made.’’. 

22 (B) ERISA.— 

23 (i) IN GENERAL.—Subpart B of part 

24 7 of subtitle B of title I of the Employee 

25 Retirement Income Security Act of 1974 


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1 (29 U.S.C. 1181 et seq.) is amended by 

2 adding at the end the following new sec3 tion: 

4 ‘‘SEC. 716. FAIR PRICE NEGOTIATION PROGRAM AND APPLI5 CATION OF MAXIMUM FAIR PRICES. 

6 ‘‘(a) IN GENERAL.—In the case of a group health 

7 plan or health insurance issuer offering group health in8 surance coverage that is treated under section 1197 of the 

9 Social Security Act as having in effect an agreement with 

10 the Secretary under the Fair Price Negotiation Program 

11 under part E of title XI of such Act, with respect to a 

12 price applicability period (as defined in section 1191(b) 

13 of such Act) and a selected drug (as defined in section 

14 1192(c) of such Act) with respect to such period with re15 spect to which coverage is provided under such plan or 

16 coverage— 

17 ‘‘(1) the provisions of such part shall apply, as 

18 applicable— 

19 ‘‘(A) if coverage of such selected drug is 

20 provided under such plan or coverage if the 

21 drug is furnished or dispensed at a pharmacy 

22 or by a mail order service, to the plans or cov23 erage offered by such plan or issuer, and to the 

24 individuals enrolled under such plans or cov25 erage, during such period, with respect to such 


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1 selected drug, in the same manner as such pro2 visions apply to prescription drug plans and 

3 MA–PD plans, and to individuals enrolled 

4 under such prescription drug plans and MA– 

5 PD plans during such period; and 

6 ‘‘(B) if coverage of such selected drug is 

7 provided under such plan or coverage if the 

8 drug is furnished or administered by a hospital, 

9 physician, or other provider of services or sup10 plier, to the plans or coverage offered by such 

11 plan or issuers, to the individuals enrolled 

12 under such plans or coverage, and to hospitals, 

13 physicians, and other providers of services and 

14 suppliers during such period, with respect to 

15 such drug in the same manner as such provi16 sions apply to the Secretary, to individuals enti17 tled to benefits under part A of title XVIII or 

18 enrolled under part B of such title, and to hos19 pitals, physicians, and other providers and sup20 pliers participating under title XVIII during 

21 such period; 

22 ‘‘(2) the plan or issuer shall apply any cost23 sharing responsibilities under such plan or coverage, 

24 with respect to such selected drug, by substituting 

25 an amount not more than the maximum fair price 


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1 negotiated under such part E of title XI for such 

2 drug in lieu of the drug price upon which the cost3 sharing would have otherwise applied, and such cost4 sharing responsibilities with respect to such selected 

5 drug may not exceed such maximum fair price; and 

6 ‘‘(3) the Secretary shall apply the provisions of 

7 such part E to such plan, issuer, and coverage, and 

8 such individuals so enrolled in such plans. 

9 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION

10 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health 

11 plan or a health insurance issuer offering group health in12 surance coverage shall publicly disclose in a manner and 

13 in accordance with a process specified by the Secretary 

14 any election made under section 1197 of the Social Secu15 rity Act by the plan or issuer to not participate in the 

16 Fair Price Negotiation Program under part E of title XI 

17 of such Act with respect to a selected drug (as defined 

18 in section 1192(c) of such Act) for which coverage is pro19 vided under such plan or coverage before the beginning 

20 of the plan year for which such election was made.’’. 

21 (ii) APPLICATION TO RETIREE AND

22 CERTAIN SMALL GROUP HEALTH PLANS.— 

23 Section 732(a) of the Employee Retire24 ment Income Security Act of 1974 (29 

25 U.S.C. 1191a(a)) is amended by striking 


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1 ‘‘section 711’’ and inserting ‘‘sections 711 

2 and 716’’. 

3 (iii) CLERICAL AMENDMENT.—The 

4 table of sections for subpart B of part 7 of 

5 subtitle B of title I of the Employee Re6 tirement Income Security Act of 1974 is 

7 amended by adding at the end the fol8 lowing: 

‘‘Sec. 716. Fair Price Negotiation Program and application of maximum fair 

prices.’’. 

9 (C) IRC.— 

10 (i) IN GENERAL.—Subchapter B of 

11 chapter 100 of the Internal Revenue Code 

12 of 1986 is amended by adding at the end 

13 the following new section: 

14 ‘‘SEC. 9816. FAIR PRICE NEGOTIATION PROGRAM AND AP15 PLICATION OF MAXIMUM FAIR PRICES. 

16 ‘‘(a) IN GENERAL.—In the case of a group health 

17 plan that is treated under section 1197 of the Social Secu18 rity Act as having in effect an agreement with the Sec19 retary under the Fair Price Negotiation Program under 

20 part E of title XI of such Act, with respect to a price 

21 applicability period (as defined in section 1191(b) of such 

22 Act) and a selected drug (as defined in section 1192(c) 

23 of such Act) with respect to such period with respect to 

24 which coverage is provided under such plan— 


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1 ‘‘(1) the provisions of such part shall apply, as 

2 applicable— 

3 ‘‘(A) if coverage of such selected drug is 

4 provided under such plan if the drug is fur5 nished or dispensed at a pharmacy or by a mail 

6 order service, to the plan, and to the individuals 

7 enrolled under such plan during such period, 

8 with respect to such selected drug, in the same 

9 manner as such provisions apply to prescription 

10 drug plans and MA–PD plans, and to individ11 uals enrolled under such prescription drug 

12 plans and MA–PD plans during such period; 

13 and 

14 ‘‘(B) if coverage of such selected drug is 

15 provided under such plan if the drug is fur16 nished or administered by a hospital, physician, 

17 or other provider of services or supplier, to the 

18 plan, to the individuals enrolled under such 

19 plan, and to hospitals, physicians, and other 

20 providers of services and suppliers during such 

21 period, with respect to such drug in the same 

22 manner as such provisions apply to the Sec23 retary, to individuals entitled to benefits under 

24 part A of title XVIII or enrolled under part B 

25 of such title, and to hospitals, physicians, and 


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1 other providers and suppliers participating 

2 under title XVIII during such period; 

3 ‘‘(2) the plan shall apply any cost-sharing re4 sponsibilities under such plan, with respect to such 

5 selected drug, by substituting an amount not more 

6 than the maximum fair price negotiated under such 

7 part E of title XI for such drug in lieu of the drug 

8 price upon which the cost-sharing would have other9 wise applied, and such cost-sharing responsibilities 

10 with respect to such selected drug may not exceed 

11 such maximum fair price; and 

12 ‘‘(3) the Secretary shall apply the provisions of 

13 such part E to such plan and such individuals so en14 rolled in such plan. 

15 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION

16 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health 

17 plan shall publicly disclose in a manner and in accordance 

18 with a process specified by the Secretary any election 

19 made under section 1197 of the Social Security Act by 

20 the plan to not participate in the Fair Price Negotiation 

21 Program under part E of title XI of such Act with respect 

22 to a selected drug (as defined in section 1192(c) of such 

23 Act) for which coverage is provided under such plan before 

24 the beginning of the plan year for which such election was 

25 made.’’. 


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1 (ii) APPLICATION TO RETIREE AND

2 CERTAIN SMALL GROUP HEALTH PLANS.— 

3 Section 9831(a)(2) of the Internal Revenue 

4 Code of 1986 is amended by inserting 

5 ‘‘other than with respect to section 9816,’’ 

6 before ‘‘any group health plan’’. 

7 (iii) CLERICAL AMENDMENT.—The 

8 table of sections for subchapter B of chap9 ter 100 of such Code is amended by add10 ing at the end the following new item: 

‘‘Sec. 9816. Fair Price Negotiation Program and application of maximum fair 

prices.’’. 

11 (3) FAIR PRICE NEGOTIATION PROGRAM PRICES

12 INCLUDED IN BEST PRICE AND AMP.—Section 1927 

13 of the Social Security Act (42 U.S.C. 1396r–8) is 

14 amended— 

15 (A) in subsection (c)(1)(C)(ii)— 

16 (i) in subclause (III), by striking at 

17 the end ‘‘; and’’; 

18 (ii) in subclause (IV), by striking at 

19 the end the period and inserting ‘‘; and’’; 

20 and 

21 (iii) by adding at the end the fol22 lowing new subclause: 

23 ‘‘(V) in the case of a rebate pe24 riod and a covered outpatient drug 


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1 that is a selected drug (as defined in 

2 section 1192(c)) during such rebate 

3 period, shall be inclusive of the price 

4 for such drug made available from the 

5 manufacturer during the rebate period 

6 by reason of application of part E of 

7 title XI to any wholesaler, retailer, 

8 provider, health maintenance organi9 zation, nonprofit entity, or govern10 mental entity within the United 

11 States.’’; and 

12 (B) in subsection (k)(1)(B), by adding at 

13 the end the following new clause: 

14 ‘‘(iii) CLARIFICATION.—Notwith15 standing clause (i), in the case of a rebate 

16 period and a covered outpatient drug that 

17 is a selected drug (as defined in section 

18 1192(c)) during such rebate period, any 

19 reduction in price paid during the rebate 

20 period to the manufacturer for the drug by 

21 a wholesaler or retail community pharmacy 

22 described in subparagraph (A) by reason of 

23 application of part E of title XI shall be 

24 included in the average manufacturer price 

25 for the covered outpatient drug.’’. 


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1 (4) FEHBP.—Section 8902 of title 5, United 

2 States Code, is amended by adding at the end the 

3 following: 

4 ‘‘(p) A contract may not be made or a plan approved 

5 under this chapter with any carrier that has affirmatively 

6 elected, pursuant to section 1197 of the Social Security 

7 Act, not to participate in the Fair Price Negotiation Pro8 gram established under section 1191 of such Act for any 

9 selected drug (as that term is defined in section 1192(c) 

10 of such Act).’’. 

11 (5) OPTION OF SECRETARY OF VETERANS AF12 FAIRS TO PURCHASE COVERED DRUGS AT MAXIMUM

13 FAIR PRICES.—Section 8126 of title 38, United 

14 States Code, is amended— 

15 (A) in subsection (a)(2), by inserting ‘‘, 

16 subject to subsection (j),’’ after ‘‘may not ex17 ceed’’; 

18 (B) in subsection (d), in the matter pre19 ceding paragraph (1), by inserting ‘‘, subject to 

20 subsection (j)’’ after ‘‘for the procurement of 

21 the drug’’; and 

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

23 subsection: 

24 ‘‘(j)(1) In the case of a covered drug that is a selected 

25 drug, for any year during the price applicability period for 


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1 such drug, if the Secretary determines that the maximum 

2 fair price of such drug for such year is less than the price 

3 for such drug otherwise in effect pursuant to this section 

4 (including after application of any reduction under sub5 section (a)(2) and any discount under subsection (c)), at 

6 the option of the Secretary, in lieu of the maximum price 

7 (determined after application of the reduction under sub8 section (a)(2) and any discount under subsection (c), as 

9 applicable) that would be permitted to be charged during 

10 such year for such drug pursuant to this section without 

11 application of this subsection, the maximum price per12 mitted to be charged during such year for such drug pur13 suant to this section shall be such maximum fair price for 

14 such drug and year. 

15 ‘‘(2) For purposes of this subsection: 

16 ‘‘(A) The term ‘maximum fair price’ means, 

17 with respect to a selected drug and year during the 

18 price applicability period for such drug, the max19 imum fair price (as defined in section 1191(c)(2) of 

20 the Social Security Act) for such drug and year. 

21 ‘‘(B) The term ‘negotiation eligible drug’ has 

22 the meaning given such term in section 1192(d)(1) 

23 of the Social Security Act. 


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1 ‘‘(C) The term ‘price applicability period’ has, 

2 with respect to a selected drug, the meaning given 

3 such term in section 1191(b)(2) of such Act. 

4 ‘‘(D) The term ‘selected drug’ means, with re5 spect to a year, a drug that is a selected drug under 

6 section 1192(c) of such Act for such year.’’. 

7 SEC. 302. DRUG MANUFACTURER EXCISE TAX FOR NON8 COMPLIANCE. 

9 (a) IN GENERAL.—Subchapter E of chapter 32 of the 

10 Internal Revenue Code of 1986 is amended by adding at 

11 the end the following new section: 

12 ‘‘SEC. 4192. SELECTED DRUGS DURING NONCOMPLIANCE 

13 PERIODS. 

14 ‘‘(a) IN GENERAL.—There is hereby imposed on the 

15 sale by the manufacturer, producer, or importer of any 

16 selected drug during a day described in subsection (b) a 

17 tax in an amount such that the applicable percentage is 

18 equal to the ratio of— 

19 ‘‘(1) such tax, divided by 

20 ‘‘(2) the sum of such tax and the price for 

21 which so sold. 

22 ‘‘(b) NONCOMPLIANCE PERIODS.—A day is described 

23 in this subsection with respect to a selected drug if it is 

24 a day during one of the following periods: 


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1 ‘‘(1) The period beginning on the June 16th 

2 immediately following the selected drug publication 

3 date and ending on the first date during which the 

4 manufacturer of the drug has in place an agreement 

5 described in subsection (a) of section 1193 of the 

6 Social Security Act with respect to such drug. 

7 ‘‘(2) The period beginning on the April 1st im8 mediately following the June 16th described in para9 graph (1) and ending on the first date during which 

10 the manufacturer of the drug has agreed to a max11 imum fair price under such agreement. 

12 ‘‘(3) In the case of a selected drug with respect 

13 to which the Secretary of Health and Human Serv14 ices has specified a renegotiation period under such 

15 agreement, the period beginning on the first date 

16 after the last date of such renegotiation period and 

17 ending on the first date during which the manufac18 turer of the drug has agreed to a renegotiated max19 imum fair price under such agreement. 

20 ‘‘(4) With respect to information that is re21 quired to be submitted to the Secretary of Health 

22 and Human Services under such agreement, the pe23 riod beginning on the date on which such Secretary 

24 certifies that such information is overdue and ending 

25 on the date that such information is so submitted. 


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1 ‘‘(5) In the case of a selected drug with respect 

2 to which a payment is due under subsection (c) of 

3 such section 1193, the period beginning on the date 

4 on which the Secretary of Health and Human Serv5 ices certifies that such payment is overdue and end6 ing on the date that such payment is made in full. 

7 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 

8 this section, the term ‘applicable percentage’ means— 

9 ‘‘(1) in the case of sales of a selected drug dur10 ing the first 90 days described in subsection (b) with 

11 respect to such drug, 65 percent, 

12 ‘‘(2) in the case of sales of such drug during 

13 the 91st day through the 180th day described in 

14 subsection (b) with respect to such drug, 75 percent, 

15 ‘‘(3) in the case of sales of such drug during 

16 the 181st day through the 270th day described in 

17 subsection (b) with respect to such drug, 85 percent, 

18 and 

19 ‘‘(4) in the case of sales of such drug during 

20 any subsequent day, 95 percent. 

21 ‘‘(d) SELECTED DRUG.—For purposes of this sec22 tion— 

23 ‘‘(1) IN GENERAL.—The term ‘selected drug’ 

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1 factured or produced in the United States or entered 

2 into the United States for consumption, use, or 

3 warehousing. 

4 ‘‘(2) UNITED STATES.—The term ‘United 

5 States’ has the meaning given such term by section 

6 4612(a)(4). 

7 ‘‘(3) COORDINATION WITH RULES FOR POSSES8 SIONS OF THE UNITED STATES.—Rules similar to 

9 the rules of paragraphs (2) and (4) of section 

10 4132(c) shall apply for purposes of this section. 

11 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

12 section, the terms ‘selected drug publication date’ and 

13 ‘maximum fair price’ have the meaning given such terms 

14 in section 1191 of the Social Security Act. 

15 ‘‘(f) ANTI-ABUSE RULE.—In the case of a sale which 

16 was timed for the purpose of avoiding the tax imposed by 

17 this section, the Secretary may treat such sale as occur18 ring during a day described in subsection (b).’’. 

19 (b) NO DEDUCTION FOR EXCISE TAX PAYMENTS.— 

20 Section 275 of the Internal Revenue Code of 1986 is 

21 amended by adding ‘‘or by section 4192’’ before the period 

22 at the end of subsection (a)(6). 

23 (c) CONFORMING AMENDMENTS.— 


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1 (1) Section 4221(a) of the Internal Revenue 

2 Code of 1986 is amended by inserting ‘‘or 4192’’ 

3 after ‘‘section 4191’’. 

4 (2) Section 6416(b)(2) of such Code is amend5 ed by inserting ‘‘or 4192’’ after ‘‘section 4191’’. 

6 (d) CLERICAL AMENDMENTS.— 

7 (1) The heading of subchapter E of chapter 32 

8 of the Internal Revenue Code of 1986 is amended by 

9 striking ‘‘Medical Devices’’ and inserting 

10 ‘‘Other Medical Products’’. 

11 (2) The table of subchapters for chapter 32 of 

12 such Code is amended by striking the item relating 

13 to subchapter E and inserting the following new 

14 item: 

‘‘SUBCHAPTER E. OTHER MEDICAL PRODUCTS’’. 

15 (3) The table of sections for subchapter E of 

16 chapter 32 of such Code is amended by adding at 

17 the end the following new item: 

‘‘Sec. 4192. Selected drugs during noncompliance periods.’’. 

18 (e) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to sales after the date of the enact20 ment of this Act. 

21 SEC. 303. FAIR PRICE NEGOTIATION IMPLEMENTATION 

22 FUND. 

23 (a) IN GENERAL.—There is hereby established a Fair 

24 Price Negotiation Implementation Fund (referred to in 


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1 this section as the ‘‘Fund’’). The Secretary of Health and 

2 Human Services may obligate and expend amounts in the 

3 Fund to carry out this title (and the amendments made 

4 by such title). 

5 (b) FUNDING.—There is authorized to be appro6 priated, and there is hereby appropriated, out of any mon7 ies in the Treasury not otherwise appropriated, to the 

8 Fund $3,000,000,000, to remain available until expended, 

9 of which— 

10 (1) $600,000,000 shall become available on the 

11 date of the enactment of this Act; 

12 (2) $600,000,000 shall become available on Oc13 tober 1, 2020; 

14 (3) $600,000,000 shall become available on Oc15 tober 1, 2021; 

16 (4) $600,000,000 shall become available on Oc17 tober 1, 2022; and 

18 (5) $600,000,000 shall become available on Oc19 tober 1, 2023. 

20 (c) SUPPLEMENT NOT SUPPLANT.—Any amounts 

21 appropriated pursuant to this section shall be in addition 

22 to any other amounts otherwise appropriated pursuant to 

23 any other provision of law. 


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1 TITLE IV—PUBLIC HEALTH 

2 INVESTMENTS 

3 SEC. 401. SUPPORTING INCREASED INNOVATION. 

4 (a) IN GENERAL.—The Secretary of Health and 

5 Human Services, acting through the Director of the Na6 tional Institutes of Health, shall continue to support and 

7 to expand, as applicable, biomedical research carried out 

8 through the National Institutes of Health innovation 

9 projects described in section 1001(b)(4) of the 21st Cen10 tury Cures Act (Public Law 114–255). The Secretary 

11 shall ensure that any such research (and related activities) 

12 is conducted in compliance with section 492B of the Public 

13 Health Service Act (42 U.S.C. 289a–2) (relating to the 

14 inclusion of women and members of minority groups in 

15 research). 

16 (b) AUTHORIZATION OF APPROPRIATIONS.—To carry 

17 out this subsection, in addition to funds made available 

18 under paragraph (2) of section 1001(b) of the 21st Cen19 tury Cures Act (Public Law 114–255), there is authorized 

20 to be appropriated, and there is appropriated to the NIH 

21 Innovation Account established under such section 

22 1001(b), out of any moneys in the Treasury not otherwise 


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1 obligated, $2,000,000,000 for fiscal year 2021, to remain 

2 available until expended. 

Passed the House of Representatives June 29, 2020. 

Attest: CHERYL L. JOHNSON, 

Clerk. 


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Calendar No. 523 

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 InsurSEPTEMBER 8, 2020 

Read the second time and placed on the calendar 


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