I 

113TH CONGRESS 

1ST SESSION H. R. 2900 

To repeal the Patient Protection and Affordable Care Act and the Health 

Care and Education Reconciliation Act of 2010; to amend the Internal 

Revenue Code of 1986 to repeal the percentage floor on medical expense 

deductions, expand the use of tax-preferred health care accounts, and 

establish a charity care credit; to amend the Social Security Act to 

create a Medicare Premium Assistance Program, reform EMTALA requirements, and to replace the Medicaid program and the Children’s 

Health Insurance program with a block grant to the States; to amend 

the Public Health Service Act to provide for cooperative governing of 

individual and group health insurance coverage offered in interstate commerce; and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 1, 2013 

Mr. BROUN of Georgia introduced the following bill; which was referred to the 

Committee on Energy and Commerce, and in addition to the Committees 

on Ways and Means, Education and the Workforce, Natural Resources, 

the Judiciary, House Administration, Appropriations, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To repeal the Patient Protection and Affordable Care Act 

and the Health Care and Education Reconciliation Act 

of 2010; to amend the Internal Revenue Code of 1986 

to repeal the percentage floor on medical expense deductions, expand the use of tax-preferred health care accounts, and establish a charity care credit; to amend 

the Social Security Act to create a Medicare Premium 


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Assistance Program, reform EMTALA requirements, and 

to replace the Medicaid program and the Children’s 

Health Insurance program with a block grant to the 

States; to amend the Public Health Service Act to provide for cooperative governing of individual and group 

health insurance coverage offered in interstate commerce; 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS; CON4 STRUCTION. 

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

6 ‘‘Offering Patients True Individualized Options Now Act 

7 of 2013’’ or the ‘‘OPTION Act of 2013’’. 

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

9 this Act is as follows: 

Sec. 1. Short title; table of contents; construction. 

TITLE I—REPEAL OF PPACA AND HCERA 

Sec. 101. Repeal of PPACA and HCERA. 

TITLE II—HEALTH CARE TAX REFORM 

Subtitle A—HSA Reform 

Sec. 201. Repeal of high deductible health plan requirement. 

Sec. 202. Increase in deductible HSA contribution limitations. 

Sec. 203. Medicare eligible individuals eligible to contribute to HSA. 

Sec. 204. HSA Rollover to Medicare Advantage MSA. 

Sec. 205. Repeal of additional tax on distributions not used for qualified medical expenses. 

Subtitle B—Other Health Care Tax Reform 

Sec. 206. Elimination of 10-percent floor on medical expense deductions. 

Sec. 207. Repeal of prescribed drug limitation on certain tax benefits for medical expenses. 

Sec. 208. Repeal of 2-percent miscellaneous itemized deduction floor for medical expense deductions. 

Sec. 209. Charity care credit. 


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Sec. 210. Credit for contributions made for purpose of providing medical care 

to the indigent. 

Sec. 211. COBRA continuation coverage extended. 

Sec. 212. HSA charitable contributions. 

TITLE III—MEDICARE PREMIUM ASSISTANCE PROGRAM 

Sec. 301. Replacement of Medicare part A entitlement with Medicare Reform 

Premium Assistance Program. 

Sec. 302. Gradual phasing out of CMS and transfer of functions to Department 

of the Treasury. 

TITLE IV—EMTALA REFORMS 

Sec. 401. EMTALA reforms. 

TITLE V—COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP 

HEALTH INSURANCE COVERAGE 

Sec. 501. Cooperative governing of individual and group health insurance coverage. 

Sec. 502. Continuing State authority. 

TITLE VI—STATE HEALTH FLEXIBILITY 

Sec. 601. Short title. 

Sec. 602. Health grants to the States for health care services to indigent individuals. 

Sec. 603. Repeal of Federal requirements of Medicaid and CHIP. 

Sec. 604. Severability. 

Sec. 605. Effective date. 

1 (c) CONSTRUCTION.—Nothing in this Act shall be 

2 construed to preclude or prohibit a health care provider 

3 or health insurance issuer from publicly disclosing any 

4 pricing of services provided or covered. 

5 TITLE I—REPEAL OF PPACA AND 

6 HCERA 

7 SEC. 101. REPEAL OF PPACA AND HCERA. 

8 The Patient Protection and Affordable Care Act and 

9 the Health Care and Education Reconciliation Act of 2010 

10 are each repealed, effective as of the respective date of 

11 enactment of each such Act, and the provisions of law 


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1 amended or repealed by such Acts are restored or revived 

2 as if such Acts had not been enacted. 

3 TITLE II—HEALTH CARE TAX 

4 REFORM 

5 Subtitle A—HSA Reform 

6 SEC. 201. REPEAL OF HIGH DEDUCTIBLE HEALTH PLAN RE7 QUIREMENT. 

8 (a) IN GENERAL.—Section 223 of the Internal Rev9 enue Code of 1986 is amended by striking subsection (c) 

10 and redesignating subsections (d) through (h) as sub11 sections (c) through (g), respectively. 

12 (b) CONFORMING AMENDMENTS.— 

13 (1) Subsection (a) of section 223 of such Code 

14 is amended to read as follows: 

15 ‘‘(a) DEDUCTION ALLOWED.—In the case of an indi16 vidual, there shall be allowed as a deduction for a taxable 

17 year an amount equal to the aggregate amount paid in 

18 cash during such taxable year by or on behalf of such indi19 vidual to a health savings account of such individual.’’. 

20 (2) Subsection (b) of section 223 of such Code 

21 is amended by striking paragraph (8). 

22 (3) Subparagraph (A) of section 223(c)(1) of 

23 the Internal Revenue Code of 1986 (as redesignated 

24 by subsection (b)(1)) is amended— 


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1 (A) by striking ‘‘subsection (f)(5)’’ and in2 serting ‘‘subsection (e)(5)’’, and 

3 (B) in clause (ii)— 

4 (i) by striking ‘‘the sum of—’’ and all 

5 that follows and inserting ‘‘the dollar 

6 amount in effect under subsection (b)(1).’’. 

7 (4) Section 223(f)(1) of such Code (as redesig8 nated by subsection (b)(1)) is amended by striking 

9 ‘‘Each dollar amount in subsections (b)(2) and 

10 (c)(2)(A)’’ and inserting ‘‘In the case of a taxable 

11 year beginning after December 31, 2010, each dollar 

12 amount in subsection (b)(1)’’. 

13 (5) Section 26(b)(U) of such Code is amended 

14 by striking ‘‘section 223(f)(4)’’ and inserting ‘‘sec15 tion 223(e)(4)’’. 

16 (6) Sections 35(g)(3), 220(f)(5)(A), 

17 848(e)(1)(v), 4973(a)(5), and 6051(a)(12) of such 

18 Code are each amended by striking ‘‘section 223(d)’’ 

19 each place it appears and inserting ‘‘section 223(c)’’. 

20 (7) Section 106(d)(1) of such Code is amend21 ed— 

22 (A) by striking ‘‘who is an eligible indi23 vidual (as defined in section 223(c)(1))’’, and 

24 (B) by striking ‘‘section 223(d)’’ and in25 serting ‘‘section 223(c)’’. 


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1 (8) Section 408(d)(9) of such Code is amend2 ed— 

3 (A) in subparagraph (A) by striking ‘‘who 

4 is an eligible individual (as defined in section 

5 223(c)) and’’, and 

6 (B) in subparagraph (C) by striking ‘‘com7 puted on the basis of the type of coverage under 

8 the high deductible health plan covering the in9 dividual at the time of the qualified HSA fund10 ing distribution’’. 

11 (9) Section 877A(g)(6) of such Code is amend12 ed by striking ‘‘223(f)(4)’’ and inserting 

13 ‘‘223(e)(4)’’. 

14 (10) Section 4973(g) of such Code is amend15 ed— 

16 (A) by striking ‘‘section 223(d)’’ and in17 serting ‘‘section 223(c)’’, 

18 (B) in paragraph (2), by striking ‘‘section 

19 223(f)(2)’’ and inserting ‘‘section 223(e)(2)’’, 

20 and 

21 (C) by striking ‘‘section 223(f)(3)’’ and in22 serting ‘‘section 223(e)(3)’’. 

23 (11) Section 4975 of such Code is amended— 

24 (A) in subsection (c)(6)— 


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1 (i) by striking ‘‘section 223(d)’’ and 

2 inserting ‘‘section 223(c)’’, and 

3 (ii) by striking ‘‘section 223(e)(2)’’ 

4 and inserting ‘‘section 223(d)(2)’’, and 

5 (B) in subsection (e)(1)(E), by striking 

6 ‘‘section 223(d)’’ and inserting ‘‘section 

7 223(c)’’. 

8 (12) Section 6693(a)(2)(C) of such Code is 

9 amended by striking ‘‘section 223(h)’’ and inserting 

10 ‘‘section 223(g)’’. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2012. 

14 SEC. 202. INCREASE IN DEDUCTIBLE HSA CONTRIBUTION 

15 LIMITATIONS. 

16 (a) IN GENERAL.—Paragraph (1) of section 223(b) 

17 of the Internal Revenue Code of 1986 is amended by strik18 ing ‘‘the sum of the monthly’’ and all that follows through 

19 ‘‘eligible individual’’ and inserting ‘‘$10,000 ($20,000 in 

20 the case of a joint return)’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Subsection (b) of such Code is amended by 

23 striking paragraphs (2), (3), and (5) and by redesig24 nating paragraphs (4), (6), and (7) as paragraphs 

25 (2), (3), and (4), respectively. 


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1 (2) Paragraph (2) of section 223(b) of such 

2 Code (as redesignated by paragraph (1)) is amended 

3 by striking the last sentence. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2012. 

7 SEC. 203. MEDICARE ELIGIBLE INDIVIDUALS ELIGIBLE TO 

8 CONTRIBUTE TO HSA. 

9 (a) Subsection (b) of section 223 of the Internal Rev10 enue Code of 1986 is amended by striking paragraph (7). 

11 (b) Paragraph (1) of section 223(c) of such Code is 

12 amended by adding at the end the following new subpara13 graph: 

14 ‘‘(C) SPECIAL RULE FOR INDIVIDUALS EN15 TITLED TO BENEFITS UNDER MEDICARE.—In 

16 the case of an individual— 

17 ‘‘(i) who is entitled to benefits under 

18 title XVIII of the Social Security Act, and 

19 ‘‘(ii) with respect to whom a health 

20 savings account is established in a month 

21 before the first month such individual is 

22 entitled to such benefits, 

23 such individual shall be deemed to be an eligible 

24 individual.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2012. 

4 SEC. 204. HSA ROLLOVER TO MEDICARE ADVANTAGE MSA. 

5 (a) IN GENERAL.—Paragraph (2) of section 138(b) 

6 of the Internal Revenue Code of 1986 is amended by strik7 ing ‘‘or’’ at the end of subparagraph (A), by adding ‘‘or’’ 

8 at the end of subparagraph (C), and by adding at the end 

9 the following new subparagraph: 

10 ‘‘(C) a HSA rollover contribution described 

11 in subsection (d)(5),’’. 

12 (b) HSA ROLLOVER CONTRIBUTION.—Subsection (c) 

13 of section 138 of such Code is amended by adding at the 

14 end the following new paragraph: 

15 ‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 

16 described in this paragraph as a rollover contribu17 tion if it meets the requirement of subparagraphs 

18 (A) and (B). 

19 ‘‘(A) IN GENERAL.—The requirements of 

20 this subparagraph are met in the case of an 

21 amount paid or distributed from a health sav22 ings to the account beneficiary to the extent the 

23 amount is received is paid into a Medicare Ad24 vantage MSA of such beneficiary not later than 


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1 the 60th day after the day on which the bene2 ficiary receives the payment or distribution. 

3 ‘‘(B) LIMITATION.—This paragraph shall 

4 not apply to any amount described in subpara5 graph (A) received by an individual from a 

6 health savings account if, at any time during 

7 the 1-year period ending on the day of such re8 ceipt, such individual received any other amount 

9 described in subparagraph (A) from a health 

10 savings account which was not includible in the 

11 individual’s gross income because of the appli12 cation of section 223(f)(5)(A).’’. 

13 (c) CONFORMING AMENDMENT.—Subparagraph (A) 

14 of section 223(f)(5) of such Code is amended by inserting 

15 ‘‘or Medicare Advantage MSA’’ after ‘‘into a health sav16 ings account’’. 

17 (d) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2012. 

20 SEC. 205. REPEAL OF ADDITIONAL TAX ON DISTRIBUTIONS 

21 NOT USED FOR QUALIFIED MEDICAL EX22 PENSES. 

23 (a) IN GENERAL.—Subsection (f) of section 223 of 

24 the Internal Revenue Code of 1986 is amended by striking 


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1 paragraph (4) and redesignating paragraphs (5), (6), and 

2 (7) and paragraphs (4), (5), and (6), respectively. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Paragraph (2) of section 25(b) of such Code 

5 is amended by striking subparagraph (U) and by re6 designating subparagraphs (V), (W), and (X) as 

7 subparagraphs (U), (V), and (W). 

8 (2) Subparagraph (C) of section 106(e)(4) of 

9 such Code is amended by striking ‘‘223(f)(5)’’ and 

10 inserting ‘‘223(f)(4)’’. 

11 (3) Paragraph (6) of section 877A(g) of such 

12 Code is amended by striking ‘‘223(f)(4),’’. 

13 (4) Paragraph (1) of section 4973(g) of such 

14 Code is amended by striking ‘‘223(f)(5)’’ and insert15 ing ‘‘223(f)(4)’’. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2012. 

19 Subtitle B—Other Health Care Tax 

20 Reform 

21 SEC. 206. ELIMINATION OF 10-PERCENT FLOOR ON MED22 ICAL EXPENSE DEDUCTIONS. 

23 (a) IN GENERAL.—Subsection (a) of section 213 of 

24 the Internal Revenue Code of 1986 is amended by striking 


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1 ‘‘, to the extent that such expenses exceed 10 percent of 

2 adjusted gross income’’. 

3 (b) CONFORMING AMENDMENT.—Paragraph (1) of 

4 section 56(b) of such Code is amended by striking sub5 paragraph (B). 

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

7 this section shall apply to taxable years beginning after 

8 December 31, 2012. 

9 SEC. 207. REPEAL OF PRESCRIBED DRUG LIMITATION ON 

10 CERTAIN TAX BENEFITS FOR MEDICAL EX11 PENSES. 

12 (a) DEDUCTION FOR MEDICAL EXPENSES.— 

13 (1) IN GENERAL.—Section 213 of the Internal 

14 Revenue Code of 1986 is amended by striking sub15 section (b). 

16 (2) CONFORMING AMENDMENT.—Subsection (d) 

17 of section 213 of such Code is amended by striking 

18 paragraph (3). 

19 (b) TREATMENT OF REIMBURSEMENTS UNDER ACCI20 DENT OR HEALTH PLANS.—Section 106 of such Code is 

21 amended by striking subsection (f). 

22 (c) HEALTH SAVINGS ACCOUNTS.—Subparagraph 

23 (A) of section 223(d)(2) of such Code is amended by strik24 ing the last sentence thereof. 


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1 (d) ARCHER MSAS.—Subparagraph (A) of section 

2 220(d)(2) of such Code is amended by striking the last 

3 sentence thereof. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2012. 

7 SEC. 208. REPEAL OF 2-PERCENT MISCELLANEOUS 

8 ITEMIZED DEDUCTION FLOOR FOR MEDICAL 

9 EXPENSE DEDUCTIONS. 

10 (a) IN GENERAL.—Subsection (b) of section 67 of the 

11 Internal Revenue Code of 1986 is amended by striking 

12 paragraph (5). 

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

14 this section shall apply to taxable years beginning after 

15 the December 31, 2012. 

16 SEC. 209. CHARITY CARE CREDIT. 

17 (a) IN GENERAL.—Subpart A of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code of 

19 1986 (relating to nonrefundable personal credits) is 

20 amended by inserting after section 25D the following new 

21 section: 

22 ‘‘SEC. 25E. CHARITY CARE CREDIT. 

23 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a phy24 sician, there shall be allowed as a credit against the tax 


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1 imposed by this chapter for a taxable year the amount 

2 determined in accordance with the following table: 

‘‘If the physician has provided during such 

taxable year: 

The amount of 

the credit is: 

At least 25 but less than 30 qualified hours of 

charity care ......................................................... $2,000. 

At least 30 but less than 35 qualified hours of 

charity care ......................................................... $2,400. 

At least 35 but less than 40 qualified hours of 

charity care ......................................................... $2,800. 

At least 40 but less than 45 qualified hours of 

charity care ......................................................... $3,200. 

At least 45 but less than 50 qualified hours of 

charity care ......................................................... $3,600. 

At least 50 but less than 55 qualified hours of 

charity care ......................................................... $4,000. 

At least 55 but less than 60 qualified hours of 

charity care ......................................................... $4,400. 

At least 60 but less than 65 qualified hours of 

charity care ......................................................... $4,800. 

At least 65 but less than 70 qualified hours of 

charity care ......................................................... $5,200. 

At least 70 but less than 75 qualified hours of 

charity care ......................................................... $5,600. 

At least 75 but less than 80 qualified hours of 

charity care ......................................................... $6,000. 

At least 80 but less than 85 qualified hours of 

charity care ......................................................... $6,400. 

At least 85 but less than 90 qualified hours of 

charity care ......................................................... $6,800. 

At least 90 but less than 95 qualified hours of 

charity care ......................................................... $7,200. 

At least 95 but less than 100 qualified hours of 

charity care ......................................................... $7,600. 

At least 100 hours of charity care ......................... $8,000. 

3 ‘‘(b) QUALIFIED HOURS OF CHARITY CARE.—For 

4 purposes of this section— 

5 ‘‘(1) QUALIFIED HOURS OF CHARITY CARE.— 

6 The term ‘qualified hours of charity care’ means the 

7 hours that a physician provides medical care (as de8 fined in section 213(d)(1)(A)) on a volunteer or pro 

9 bono basis. 


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1 ‘‘(2) PHYSICIAN.—The term ‘physician’ has the 

2 meaning given to such term in section 1861(r) of the 

3 Social Security Act (42 U.S.C. 1395x(r)).’’. 

4 (b) CONFORMING AMENDMENT.—The table of sec5 tions for subpart A of part IV of subchapter A of chapter 

6 1 of such Code is amended by inserting after the item 

7 relating to section 25D the following new item: 

‘‘Sec. 25E. Charity care credit.’’. 

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2012. 

11 SEC. 210. CREDIT FOR CONTRIBUTIONS MADE FOR PUR12 POSE OF PROVIDING MEDICAL CARE TO THE 

13 INDIGENT. 

14 (a) IN GENERAL.—Subpart B of part IV of sub15 chapter A of chapter 1 of the Internal Revenue Code of 

16 1986 is amended by adding at the end the following new 

17 section: 

18 ‘‘SEC. 30E. CONTRIBUTIONS FOR PROVIDING MEDICAL 

19 CARE TO THE INDIGENT. 

20 ‘‘(a) IN GENERAL.—There shall be allowed as a cred21 it against the tax imposed by this chapter for the taxable 

22 year an amount equal to the indigent care contributions 

23 made by the taxpayer during the taxable year. 

24 ‘‘(b) INDIGENT CARE CONTRIBUTION.—For purposes 

25 of this section, the term ‘indigent care contribution’ means 


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1 any contribution or gift of money or other property to or 

2 for the use of any person if such contribution or gift is 

3 used (or the proceeds from which are used) by such person 

4 for the purpose of providing medical care to indigent indi5 viduals in the United States. 

6 ‘‘(c) VALUATION AND SUBSTANTIATION OF CON7 TRIBUTIONS, ETC.—Rules similar to the rules of sub8 sections (e) and (f) of section 170 shall apply for purposes 

9 of this section. 

10 ‘‘(d) APPLICATION WITH OTHER CREDITS.— 

11 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF

12 GENERAL BUSINESS CREDIT.—So much of the credit 

13 which would be allowed under subsection (a) for any 

14 taxable year (determined without regard to this sub15 section) that is attributable to indigent care con16 tributions made by— 

17 ‘‘(A) any corporation or partnership, or 

18 ‘‘(B) any other person if such contribution 

19 was made in connection with a trade or busi20 ness carried on by such person, 

21 shall be treated as a credit listed in section 38(b) for 

22 such taxable year (and not allowed under subsection 

23 (a)). 

24 ‘‘(2) PERSONAL CREDIT.—For purposes of this 

25 title, the credit allowed under subsection (a) for any 


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1 taxable year (determined after application of para2 graph (1)) shall be treated as a credit allowable 

3 under subpart A for such taxable year. 

4 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—The amount of 

5 any deduction or other credit allowable under this chapter 

6 for any indigent care contribution shall be reduced by the 

7 amount of credit allowable under this section for such con8 tribution.’’. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) Section 38(b) of such Code is amended by 

11 striking ‘‘plus’’ at the end of paragraph (35), by 

12 striking the period at the end of paragraph (36) and 

13 inserting ‘‘, plus’’, and by adding at the end the fol14 lowing new paragraph: 

15 ‘‘(37) the portion of the credit described in sec16 tion 30E(d)(1) (relating to credit for contributions 

17 for providing medical care to the indigent).’’. 

18 (2) Section 38(c)(4)(B) of such Code is amend19 ed by striking ‘‘and’’ at the end of clause (viii), by 

20 striking the period at the end of clause (ix) and in21 serting ‘‘, and’’, and by adding at the end the fol22 lowing new clause: 

23 ‘‘(x) the portion of the credit de24 scribed in section 30E(d)(1) (relating to 


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1 credit for contributions for providing med2 ical care to the indigent).’’. 

3 (3) The table of sections for subpart B of part 

4 IV of subchapter A of chapter 1 of such Code is 

5 amended by adding at the end the following new 

6 item: 

‘‘Sec. 30E. Contributions for providing medical care to the indigent.’’. 

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

8 this section shall apply to contributions made after the 

9 date of the enactment of this Act. 

10 SEC. 211. COBRA CONTINUATION COVERAGE EXTENDED. 

11 (a) UNDER IRC.—Subparagraph (B) of section 

12 4980B(f)(2) of the Internal Revenue Code of 1986 is 

13 amended by striking clauses (i) and (v) and by redesig14 nating clauses (ii), (iii), and (iv) as clauses (i), (ii), and 

15 (iii), respectively. 

16 (b) UNDER ERISA.—Paragraph (2) of section 602 

17 of the Employee Retirement Income Security Act of 2009 

18 (29 U.S.C. 1162) is amended by striking subparagraphs 

19 (A) and (E) and by redesignating subparagraphs (B), (C), 

20 and (D) as subparagraphs (A), (B), and (C), respectively. 

21 (c) UNDER PHSA.—Paragraph (2) of section 

22 2202(2) of the Public Health Service Act (42 U.S.C. 

23 300bb–2(2)) is amended by striking subparagraphs (A) 

24 and (E) and by redesignating subparagraphs (B), (C), and 

25 (D) as subparagraphs (A), (B), and (C), respectively. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply with respect to group health plans, 

3 and health insurance coverage offered in connection with 

4 group health plans, for plan years beginning after the date 

5 of the enactment of this Act. 

6 SEC. 212. HSA CHARITABLE CONTRIBUTIONS. 

7 (a) IN GENERAL.—Subsection (f) of section 223 of 

8 the Internal Revenue Code of 1986 is amended by adding 

9 at the end the following new paragraph: 

10 ‘‘(9) DISTRIBUTIONS FOR CHARITABLE PUR11 POSES.—For purposes of this subsection— 

12 ‘‘(A) IN GENERAL.—Paragraph (2) shall 

13 not apply to any qualified charitable distribu14 tions with respect to a taxpayer made during 

15 any taxable year. 

16 ‘‘(B) QUALIFIED CHARITABLE DISTRIBU17 TION.—For purposes of this paragraph, the 

18 term ‘qualified charitable distribution’ means 

19 any distribution from a health savings account 

20 which is made directly by the trustee to an or21 ganization described in section 170(b)(1)(A) 

22 (other than any organization described in sec23 tion 509(a)(3) or any fund or account described 

24 in section 4966(d)(2)). A distribution shall be 

25 treated as a qualified charitable distribution 


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1 only to the extent that the distribution would be 

2 includible in gross income without regard to 

3 subparagraph (A). 

4 ‘‘(C) CONTRIBUTIONS MUST BE OTHER5 WISE DEDUCTIBLE.—For purposes of this para6 graph, a distribution to an organization de7 scribed in subparagraph (B) shall be treated as 

8 a qualified charitable distribution only if a de9 duction for the entire distribution would be al10 lowable under section 170 (determined without 

11 regard to subsection (b) thereof and this para12 graph). 

13 ‘‘(D) DENIAL OF DEDUCTION.—Qualified 

14 charitable distributions which are not includible 

15 in gross income pursuant to subparagraph (A) 

16 shall not be taken into account in determining 

17 the deduction under section 170.’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2012. 


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1 TITLE III—MEDICARE PREMIUM 

2 ASSISTANCE PROGRAM 

3 SEC. 301. REPLACEMENT OF MEDICARE PART A ENTITLE4 MENT WITH MEDICARE REFORM PREMIUM 

5 ASSISTANCE PROGRAM. 

6 (a) IN GENERAL.—Section 226 of the Social Security 

7 Act (42 U.S.C. 426) is amended by adding at the end the 

8 following new subsections: 

9 ‘‘(k) REPLACEMENT OF ENTITLEMENT WITH PRE10 MIUM ASSISTANCE PROGRAM.— 

11 ‘‘(1) IN GENERAL.—Notwithstanding the pre12 vious provisions of this section, beginning the first 

13 January 1 after the date of the enactment of the Of14 fering Patients True Individualized Options Now Act 

15 of 2013, the Secretary shall establish procedures 

16 under which— 

17 ‘‘(A) in the case of an individual who, but 

18 for the application of this paragraph, would 

19 otherwise become entitled under subsection (a) 

20 on or after such January 1 to benefits under 

21 part A of title XVIII, subject to paragraph (4), 

22 the individual shall in lieu of such entitlement 

23 be automatically enrolled in the Medicare Re24 form Premium Assistance Program established 

25 under subsection (l); and 


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1 ‘‘(B) in the case of an individual who be2 fore such January 1 is entitled under sub3 section (a) to benefits under part A of title 

4 XVIII, the individual may in lieu of such enti5 tlement elect on or after such January 1 to en6 roll in the Medicare Reform Premium Assist7 ance Program established under subsection (l). 

8 ‘‘(2) TREATMENT UNDER THE INTERNAL REV9 ENUE CODE OF 1986.—An individual who is enrolled 

10 under the Medicare Reform Premium Assistance 

11 Program under paragraph (1) shall not be treated 

12 as entitled to benefits under title XVIII for purposes 

13 of section 223(b)(7) of the Internal Revenue Code of 

14 1986. 

15 ‘‘(3) INELIGIBILITY FOR PART B OR D BENE16 FITS.—An individual shall not be eligible for benefits 

17 under part B or D of title XVIII once the individual 

18 is enrolled in the Medicare Reform Premium Assist19 ance Program under paragraph (1). 

20 ‘‘(4) OPT OUT.— 

21 ‘‘(A) IN GENERAL.—Any individual who is 

22 otherwise eligible for automatic enrollment in 

23 the Medicare Reform Premium Assistance Pro24 gram under paragraph (1)(A) may elect (in 

25 such form and manner as may be specified by 


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1 the Secretary of Health and Human Services) 

2 to not be so enrolled. 

3 ‘‘(B) INDIVIDUALS ELECTING TO OPT OUT

4 NOT TREATED AS ENTITLED TO MEDICARE

5 BENEFITS.—In the case of an individual who 

6 makes an election under subparagraph (A)— 

7 ‘‘(i) such individual shall not be eligi8 ble for benefits under part A of title 

9 XVIII; and 

10 ‘‘(ii) the provisions of paragraphs (2) 

11 and (3) shall apply to such individual in 

12 the same manner as such paragraphs apply 

13 to an individual enrolled under the Medi14 care Reform Premium Assistance Program 

15 under paragraph (1). 

16 ‘‘(l) MEDICARE REFORM PREMIUM ASSISTANCE.— 

17 ‘‘(1) ESTABLISHMENT OF PREMIUM ASSIST18 ANCE PROGRAM.—The Secretary shall establish a 

19 program to be known as the Medicare Reform Pre20 mium Assistance Program (in this subsection re21 ferred to as the ‘premium assistance program’) con22 sistent with this subsection. 

23 ‘‘(2) AUTOMATIC ENROLLMENT.—An individual 

24 otherwise entitled under subsection (a) to benefits 

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1 section (k)(4), be enrolled in the premium assistance 

2 program for the period during which such individual 

3 would otherwise be so entitled to benefits. 

4 ‘‘(3) AMOUNT OF PREMIUM ASSISTANCE.— 

5 ‘‘(A) IN GENERAL.—Subject to clause (ii), 

6 for each year that an individual is enrolled in 

7 the premium assistance program, the Secretary 

8 shall provide premium assistance to such indi9 vidual in an amount determined by the Sec10 retary that is based on the geographic location 

11 of the individual and the cost of applicable 

12 health insurance coverage and benefits in such 

13 area. 

14 ‘‘(B) COMPUTATION OF PREMIUM ASSIST15 ANCE AMOUNTS.—The amount of premium as16 sistance provided to an individual located in a 

17 geographic area for a year shall be computed at 

18 100 percent of the sum of the median premium 

19 and median deductible payment for such year 

20 for all health insurance coverage offered by 

21 health insurance issuers in the individual mar22 ket serving such area. 

23 ‘‘(4) PERMISSIBLE USE OF PREMIUM ASSIST24 ANCE.—Premium assistance under paragraph (3) 

25 may be used only for the following purposes: 


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1 ‘‘(A) For payment of premiums, 

2 deductibles, copayments, or other cost-sharing 

3 for enrollment of such individual for health in4 surance coverage offered by health insurance 

5 issuers in the individual market. 

6 ‘‘(B) As a contribution into a MSA plan 

7 established by such individual, as defined in 

8 section 138(b)(2) of the Internal Revenue Code 

9 of 1986. 

10 ‘‘(5) MSA DEPOSITS.—The amount of the pre11 mium assistance received by an individual under this 

12 subsection shall be deposited, on behalf of such indi13 vidual, into the MSA plan of such individual.’’. 

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

15 this section shall take effect on the first January 1 after 

16 the date of the enactment of this Act. 

17 SEC. 302. GRADUAL PHASING OUT OF CMS AND TRANSFER 

18 OF FUNCTIONS TO DEPARTMENT OF THE 

19 TREASURY. 

20 (a) IN GENERAL.—Beginning on January 1 of the 

21 first year beginning after the date of the enactment of this 

22 Act, the Secretary shall provide for the gradual phasing 

23 out over a period (not to exceed 10 years) of the Office 

24 of the Administrator of the Centers for Medicare & Med25 icaid Services and such Centers and the transfer of the 


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1 duties and responsibilities of such Administrator and Cen2 ters to such an office and official within the Department 

3 of the Treasury as the Secretary of the Treasury shall 

4 specify. 

5 (b) REFERENCES.—Any reference in law to the Ad6 ministrator of the Centers for Medicare & Medicaid Serv7 ices, or to such Centers, is deemed to include a reference 

8 to such official and office, respectively, within the Depart9 ment of the Treasury as is specified under subsection (a). 

10 TITLE IV—EMTALA REFORMS 

11 SEC. 401. EMTALA REFORMS. 

12 (a) USE OF QUALIFIED EMERGENCY DEPARTMENT

13 PERSONNEL IN PERFORMING INITIAL SCREENING.—Sub14 section (a) of section 1867 of the Social Security Act (42 

15 U.S.C. 1395dd) is amended— 

16 (1) by designating the sentence beginning with 

17 ‘‘In the case of’’ as paragraph (1), with the heading 

18 ‘‘IN GENERAL.—’’ and appropriate indentation; and 

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

20 paragraph: 

21 ‘‘(2) PERMITTING APPLICATION OF ER

22 TRIAGE.— 

23 ‘‘(A) IN GENERAL.—The requirement of 

24 paragraph (1) that a hospital conduct an appro25 priate medical screening examination of an indiVerDate Mar 15 2010 03:49 Aug 06, 2013 Jkt 029200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H2900.IH H2900

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1 vidual is deemed to be satisfied if a qualified 

2 emergency screener (as defined in subparagraph 

3 (B)) performs a preliminary triage-type screen4 ing in which the personnel— 

5 ‘‘(i) assesses the nature and extent of 

6 the individual’s illness or injury; and 

7 ‘‘(ii) determines, based on such as8 sessment, that an emergency medical con9 dition does not exist. 

10 ‘‘(B) QUALIFIED EMERGENCY SCREENER

11 DEFINED.—In this paragraph, the term ‘quali12 fied emergency screener’ means a physician, li13 censed practical nurse or registered nurse, 

14 qualified emergency medical technician, or other 

15 individual with basic, health care education that 

16 meets standards specified by the Secretary as 

17 being sufficient to perform the screening de18 scribed in subparagraph (A).’’. 

19 (b) REVISION OF EMERGENCY MEDICAL CONDITION

20 DEFINITION.—Subsection (e)(1)(A) of such section is 

21 amended to read as follows: 

22 ‘‘(A) a medical condition manifesting itself 

23 by symptoms of sufficient severity (including se24 vere pain) and with an onset or of a course 

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1 tention could reasonably be expected to pose an 

2 immediate risk to life or long-term health of the 

3 individual (or, with respect to a pregnant 

4 woman, the life or long-term health of the 

5 woman or her unborn child); or’’. 

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

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

8 of this Act and shall apply to individuals who come to an 

9 emergency room on or after the date that is 30 days after 

10 the date of the enactment of this Act. 

11 TITLE V—COOPERATIVE GOV12 ERNING OF INDIVIDUAL AND 

13 GROUP HEALTH INSURANCE 

14 COVERAGE 

15 SEC. 501. COOPERATIVE GOVERNING OF INDIVIDUAL AND 

16 GROUP HEALTH INSURANCE COVERAGE. 

17 (a) IN GENERAL.—Title XXVII of the Public Health 

18 Service Act (42 U.S.C. 300gg et seq.) is amended by add19 ing at the end the following new part: 

20 ‘‘PART D—COOPERATIVE GOVERNING OF INDI21 VIDUAL AND GROUP HEALTH INSURANCE 

22 COVERAGE 

23 ‘‘SEC. 2795. DEFINITIONS. 

24 ‘‘In this part: 


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1 ‘‘(1) PRIMARY STATE.—The term ‘primary 

2 State’ means, with respect to individual or group 

3 health insurance coverage offered by a health insur4 ance issuer, the State designated by the issuer as 

5 the State whose covered laws shall govern the health 

6 insurance issuer in the sale of such coverage under 

7 this part. An issuer, with respect to a particular pol8 icy, may only designate one such State as its pri9 mary State with respect to all such coverage it of10 fers. Such an issuer may not change the designated 

11 primary State with respect to individual or group 

12 health insurance coverage once the policy is issued, 

13 except that such a change may be made upon re14 newal of the policy. With respect to such designated 

15 State, the issuer is deemed to be doing business in 

16 that State. 

17 ‘‘(2) SECONDARY STATE.—The term ‘secondary 

18 State’ means, with respect to individual or group 

19 health insurance coverage offered by a health insur20 ance issuer, any State that is not the primary State. 

21 In the case of a health insurance issuer that is sell22 ing a policy in, or to a resident of, a secondary 

23 State, the issuer is deemed to be doing business in 

24 that secondary State. 


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1 ‘‘(3) HEALTH INSURANCE ISSUER.—The term 

2 ‘health insurance issuer’ has the meaning given such 

3 term in section 2791(b)(2), except that such an 

4 issuer must be licensed in the primary State and be 

5 qualified to sell individual health insurance coverage 

6 in that State. 

7 ‘‘(4) INDIVIDUAL HEALTH INSURANCE COV8 ERAGE.—The term ‘individual health insurance cov9 erage’ means health insurance coverage offered in 

10 the individual market, as defined in section 

11 2791(e)(1). 

12 ‘‘(5) GROUP HEALTH INSURANCE COVERAGE.— 

13 The term ‘group health insurance coverage’ has the 

14 meaning given such term in 2791(b)(4). 

15 ‘‘(6) APPLICABLE STATE AUTHORITY.—The 

16 term ‘applicable State authority’ means, with respect 

17 to a health insurance issuer in a State, the State in18 surance commissioner or official or officials des19 ignated by the State to enforce the requirements of 

20 this title for the State with respect to the issuer. 

21 ‘‘(7) HAZARDOUS FINANCIAL CONDITION.—The 

22 term ‘hazardous financial condition’ means that, 

23 based on its present or reasonably anticipated finan24 cial condition, a health insurance issuer is unlikely 

25 to be able— 


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1 ‘‘(A) to meet obligations to policyholders 

2 with respect to known claims and reasonably 

3 anticipated claims; or 

4 ‘‘(B) to pay other obligations in the normal 

5 course of business. 

6 ‘‘(8) COVERED LAWS.— 

7 ‘‘(A) IN GENERAL.—The term ‘covered 

8 laws’ means the laws, rules, regulations, agree9 ments, and orders governing the insurance busi10 ness pertaining to— 

11 ‘‘(i) individual or group health insur12 ance coverage issued by a health insurance 

13 issuer; 

14 ‘‘(ii) the offer, sale, rating (including 

15 medical underwriting), renewal, and 

16 issuance of individual or group health in17 surance coverage to an individual; 

18 ‘‘(iii) the provision to an individual in 

19 relation to individual or group health in20 surance coverage of health care and insur21 ance related services; 

22 ‘‘(iv) the provision to an individual in 

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1 ations, and investment activities of a 

2 health insurance issuer; and 

3 ‘‘(v) the provision to an individual in 

4 relation to individual or group health in5 surance coverage of loss control and claims 

6 administration for a health insurance 

7 issuer with respect to liability for which 

8 the issuer provides insurance. 

9 ‘‘(B) EXCEPTION.—Such term does not in10 clude any law, rule, regulation, agreement, or 

11 order governing the use of care or cost manage12 ment techniques, including any requirement re13 lated to provider contracting, network access or 

14 adequacy, health care data collection, or quality 

15 assurance. 

16 ‘‘(9) STATE.—The term ‘State’ means the 50 

17 States and includes the District of Columbia, Puerto 

18 Rico, the Virgin Islands, Guam, American Samoa, 

19 and the Northern Mariana Islands. 

20 ‘‘(10) UNFAIR CLAIMS SETTLEMENT PRAC21 TICES.—The term ‘unfair claims settlement prac22 tices’ means only the following practices: 

23 ‘‘(A) Knowingly misrepresenting to claim24 ants and insured individuals relevant facts or 

25 policy provisions relating to coverage at issue. 


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1 ‘‘(B) Failing to acknowledge with reason2 able promptness pertinent communications with 

3 respect to claims arising under policies. 

4 ‘‘(C) Failing to adopt and implement rea5 sonable standards for the prompt investigation 

6 and settlement of claims arising under policies. 

7 ‘‘(D) Failing to effectuate prompt, fair, 

8 and equitable settlement of claims submitted in 

9 which liability has become reasonably clear. 

10 ‘‘(E) Refusing to pay claims without con11 ducting a reasonable investigation. 

12 ‘‘(F) Failing to affirm or deny coverage of 

13 claims within a reasonable period of time after 

14 having completed an investigation related to 

15 those claims. 

16 ‘‘(G) A pattern or practice of compelling 

17 insured individuals or their beneficiaries to in18 stitute suits to recover amounts due under its 

19 policies by offering substantially less than the 

20 amounts ultimately recovered in suits brought 

21 by them. 

22 ‘‘(H) A pattern or practice of attempting 

23 to settle or settling claims for less than the 

24 amount that a reasonable person would believe 

25 the insured individual or his or her beneficiary 


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1 was entitled by reference to written or printed 

2 advertising material accompanying or made 

3 part of an application. 

4 ‘‘(I) Attempting to settle or settling claims 

5 on the basis of an application that was materi6 ally altered without notice to, or knowledge or 

7 consent of, the insured. 

8 ‘‘(J) Failing to provide forms necessary to 

9 present claims within 15 calendar days of a re10 quests with reasonable explanations regarding 

11 their use. 

12 ‘‘(K) Attempting to cancel a policy in less 

13 time than that prescribed in the policy or by the 

14 law of the primary State. 

15 ‘‘(11) FRAUD AND ABUSE.—The term ‘fraud 

16 and abuse’ means an act or omission committed by 

17 a person who, knowingly and with intent to defraud, 

18 commits, or conceals any material information con19 cerning, one or more of the following: 

20 ‘‘(A) Presenting, causing to be presented 

21 or preparing with knowledge or belief that it 

22 will be presented to or by an insurer, a rein23 surer, broker or its agent, false information as 

24 part of, in support of or concerning a fact ma25 terial to one or more of the following: 


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1 ‘‘(i) An application for the issuance or 

2 renewal of an insurance policy or reinsur3 ance contract. 

4 ‘‘(ii) The rating of an insurance policy 

5 or reinsurance contract. 

6 ‘‘(iii) A claim for payment or benefit 

7 pursuant to an insurance policy or reinsur8 ance contract. 

9 ‘‘(iv) Premiums paid on an insurance 

10 policy or reinsurance contract. 

11 ‘‘(v) Payments made in accordance 

12 with the terms of an insurance policy or 

13 reinsurance contract. 

14 ‘‘(vi) A document filed with the com15 missioner or the chief insurance regulatory 

16 official of another jurisdiction. 

17 ‘‘(vii) The financial condition of an in18 surer or reinsurer. 

19 ‘‘(viii) The formation, acquisition, 

20 merger, reconsolidation, dissolution or 

21 withdrawal from one or more lines of in22 surance or reinsurance in all or part of a 

23 State by an insurer or reinsurer. 

24 ‘‘(ix) The issuance of written evidence 

25 of insurance. 


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1 ‘‘(x) The reinstatement of an insur2 ance policy. 

3 ‘‘(B) Solicitation or acceptance of new or 

4 renewal insurance risks on behalf of an insurer 

5 reinsurer or other person engaged in the busi6 ness of insurance by a person who knows or 

7 should know that the insurer or other person 

8 responsible for the risk is insolvent at the time 

9 of the transaction. 

10 ‘‘(C) Transaction of the business of insur11 ance in violation of laws requiring a license, cer12 tificate of authority or other legal authority for 

13 the transaction of the business of insurance. 

14 ‘‘(D) Attempt to commit, aiding or abet15 ting in the commission of, or conspiracy to com16 mit the acts or omissions specified in this para17 graph. 

18 ‘‘SEC. 2796. APPLICATION OF LAW. 

19 ‘‘(a) IN GENERAL.—The covered laws of the primary 

20 State shall apply to individual and group health insurance 

21 coverage offered by a health insurance issuer in the pri22 mary State and in any secondary State, but only if the 

23 coverage and issuer comply with the conditions of this sec24 tion with respect to the offering of coverage in any sec25 ondary State. 


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1 ‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC2 ONDARY STATE.—Except as provided in this section, a 

3 health insurance issuer with respect to its offer, sale, rat4 ing (including medical underwriting), renewal, and 

5 issuance of individual or group health insurance coverage 

6 in any secondary State is exempt from any covered laws 

7 of the secondary State (and any rules, regulations, agree8 ments, or orders sought or issued by such State under or 

9 related to such covered laws) to the extent that such laws 

10 would— 

11 ‘‘(1) make unlawful, or regulate, directly or in12 directly, the operation of the health insurance issuer 

13 operating in the secondary State, except that any 

14 secondary State may require such an issuer— 

15 ‘‘(A) to pay, on a nondiscriminatory basis, 

16 applicable premium and other taxes (including 

17 high risk pool assessments) which are levied on 

18 insurers and surplus lines insurers, brokers, or 

19 policyholders under the laws of the State; 

20 ‘‘(B) to register with and designate the 

21 State insurance commissioner as its agent solely 

22 for the purpose of receiving service of legal doc23 uments or process; 

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1 missioner in any State in which the issuer is 

2 doing business to determine the issuer’s finan3 cial condition, if— 

4 ‘‘(i) the State insurance commissioner 

5 of the primary State has not done an ex6 amination within the period recommended 

7 by the National Association of Insurance 

8 Commissioners; and 

9 ‘‘(ii) any such examination is con10 ducted in accordance with the examiners’ 

11 handbook of the National Association of 

12 Insurance Commissioners and is coordi13 nated to avoid unjustified duplication and 

14 unjustified repetition; 

15 ‘‘(D) to comply with a lawful order 

16 issued— 

17 ‘‘(i) in a delinquency proceeding com18 menced by the State insurance commis19 sioner if there has been a finding of finan20 cial impairment under subparagraph (C); 

21 or 

22 ‘‘(ii) in a voluntary dissolution pro23 ceeding; 

24 ‘‘(E) to comply with an injunction issued 

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1 tition by the State insurance commissioner al2 leging that the issuer is in hazardous financial 

3 condition; 

4 ‘‘(F) to participate, on a nondiscriminatory 

5 basis, in any insurance insolvency guaranty as6 sociation or similar association to which a 

7 health insurance issuer in the State is required 

8 to belong; 

9 ‘‘(G) to comply with any State law regard10 ing fraud and abuse (as defined in section 

11 2795(10)), except that if the State seeks an in12 junction regarding the conduct described in this 

13 subparagraph, such injunction must be obtained 

14 from a court of competent jurisdiction; 

15 ‘‘(H) to comply with any State law regard16 ing unfair claims settlement practices (as de17 fined in section 2795(9)); or 

18 ‘‘(I) to comply with the applicable require19 ments for independent review under section 

20 2798 with respect to coverage offered in the 

21 State; 

22 ‘‘(2) require any individual or group health in23 surance coverage issued by the issuer to be counter24 signed by an insurance agent or broker residing in 

25 that Secondary State; or 


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1 ‘‘(3) otherwise discriminate against the issuer 

2 issuing insurance in both the primary State and in 

3 any secondary State. 

4 ‘‘(c) CLEAR AND CONSPICUOUS DISCLOSURE.—A 

5 health insurance issuer shall provide the following notice, 

6 in 12-point bold type, in any insurance coverage offered 

7 in a secondary State under this part by such a health in8 surance issuer and at renewal of the policy, with the 5 

9 blank spaces therein being appropriately filled with the 

10 name of the health insurance issuer, the name of primary 

11 State, the name of the secondary State, the name of the 

12 secondary State, and the name of the secondary State, re13 spectively, for the coverage concerned: ‘Notice: This policy 

14 is issued by llll and is governed by the laws and 

15 regulations of the State of llll, and it has met all 

16 the laws of that State as determined by that State’s De17 partment of Insurance. This policy may be less expensive 

18 than others because it is not subject to all of the insurance 

19 laws and regulations of the State of lllll, includ20 ing coverage of some services or benefits mandated by the 

21 law of the State of lllll. Additionally, this policy 

22 is not subject to all of the consumer protection laws or 

23 restrictions on rate changes of the State of lllll. 

24 As with all insurance products, before purchasing this pol25 icy, you should carefully review the policy and determine 


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1 what health care services the policy covers and what bene2 fits it provides, including any exclusions, limitations, or 

3 conditions for such services or benefits.’. 

4 ‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS

5 AND PREMIUM INCREASES.— 

6 ‘‘(1) IN GENERAL.—For purposes of this sec7 tion, a health insurance issuer that provides indi8 vidual or group health insurance coverage to an indi9 vidual under this part in a primary or secondary 

10 State may not upon renewal— 

11 ‘‘(A) move or reclassify the individual in12 sured under the health insurance coverage from 

13 the class such individual is in at the time of 

14 issue of the contract based on the health status15 related factors of the individual; or 

16 ‘‘(B) increase the premiums assessed the 

17 individual for such coverage based on a health 

18 status-related factor or change of a health sta19 tus-related factor or the past or prospective 

20 claim experience of the insured individual. 

21 ‘‘(2) CONSTRUCTION.—Nothing in paragraph 

22 (1) shall be construed to prohibit a health insurance 

23 issuer— 


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1 ‘‘(A) from terminating or discontinuing 

2 coverage or a class of coverage in accordance 

3 with subsections (b) and (c) of section 2742; 

4 ‘‘(B) from raising premium rates for all 

5 policy holders within a class based on claims ex6 perience; 

7 ‘‘(C) from changing premiums or offering 

8 discounted premiums to individuals who engage 

9 in wellness activities at intervals prescribed by 

10 the issuer, if such premium changes or incen11 tives— 

12 ‘‘(i) are disclosed to the consumer in 

13 the insurance contract; 

14 ‘‘(ii) are based on specific wellness ac15 tivities that are not applicable to all indi16 viduals; and 

17 ‘‘(iii) are not obtainable by all individ18 uals to whom coverage is offered; 

19 ‘‘(D) from reinstating lapsed coverage; or 

20 ‘‘(E) from retroactively adjusting the rates 

21 charged an insured individual if the initial rates 

22 were set based on material misrepresentation by 

23 the individual at the time of issue. 

24 ‘‘(e) PRIOR OFFERING OF POLICY IN PRIMARY

25 STATE.—A health insurance issuer may not offer for sale 


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1 individual or group health insurance coverage in a sec2 ondary State unless that coverage is currently offered for 

3 sale in the primary State. 

4 ‘‘(f) LICENSING OF AGENTS OR BROKERS FOR

5 HEALTH INSURANCE ISSUERS.—Any State may require 

6 that a person acting, or offering to act, as an agent or 

7 broker for a health insurance issuer with respect to the 

8 offering of individual or group health insurance coverage 

9 obtain a license from that State, with commissions or 

10 other compensation subject to the provisions of the laws 

11 of that State, except that a State may not impose any 

12 qualification or requirement which discriminates against 

13 a nonresident agent or broker. 

14 ‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN15 SURANCE COMMISSIONER.—Each health insurance issuer 

16 issuing individual or group health insurance coverage in 

17 both primary and secondary States shall submit— 

18 ‘‘(1) to the insurance commissioner of each 

19 State in which it intends to offer such coverage, be20 fore it may offer individual or group health insur21 ance coverage in such State— 

22 ‘‘(A) a copy of the plan of operation or fea23 sibility study or any similar statement of the 

24 policy being offered and its coverage (which 


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1 shall include the name of its primary State and 

2 its principal place of business); 

3 ‘‘(B) written notice of any change in its 

4 designation of its primary State; and 

5 ‘‘(C) written notice from the issuer of the 

6 issuer’s compliance with all the laws of the pri7 mary State; and 

8 ‘‘(2) to the insurance commissioner of each sec9 ondary State in which it offers individual or group 

10 health insurance coverage, a copy of the issuer’s 

11 quarterly financial statement submitted to the pri12 mary State, which statement shall be certified by an 

13 independent public accountant and contain a state14 ment of opinion on loss and loss adjustment expense 

15 reserves made by— 

16 ‘‘(A) a member of the American Academy 

17 of Actuaries; or 

18 ‘‘(B) a qualified loss reserve specialist. 

19 ‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 

20 Nothing in this section shall be construed to affect the 

21 authority of any Federal or State court to enjoin— 

22 ‘‘(1) the solicitation or sale of individual or 

23 group health insurance coverage by a health insur24 ance issuer to any person or group who is not eligi25 ble for such insurance; or 


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1 ‘‘(2) the solicitation or sale of individual or 

2 group health insurance coverage that violates the re3 quirements of the law of a secondary State which 

4 are described in subparagraphs (A) through (H) of 

5 section 2796(b)(1). 

6 ‘‘(i) POWER OF SECONDARY STATES TO TAKE AD7 MINISTRATIVE ACTION.—Nothing in this section shall be 

8 construed to affect the authority of any State to enjoin 

9 conduct in violation of that State’s laws described in sec10 tion 2796(b)(1). 

11 ‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 

12 ‘‘(1) IN GENERAL.—Subject to the provisions of 

13 subsection (b)(1)(G) (relating to injunctions) and 

14 paragraph (2), nothing in this section shall be con15 strued to affect the authority of any State to make 

16 use of any of its powers to enforce the laws of such 

17 State with respect to which a health insurance issuer 

18 is not exempt under subsection (b). 

19 ‘‘(2) COURTS OF COMPETENT JURISDICTION.— 

20 If a State seeks an injunction regarding the conduct 

21 described in paragraphs (1) and (2) of subsection 

22 (h), such injunction must be obtained from a Fed23 eral or State court of competent jurisdiction. 


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1 ‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 

2 section shall affect the authority of any State to bring ac3 tion in any Federal or State court. 

4 ‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 

5 this section shall be construed to affect the applicability 

6 of State laws generally applicable to persons or corpora7 tions. 

8 ‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO

9 HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 

10 health insurance issuer is offering coverage in a primary 

11 State that does not accommodate residents of secondary 

12 States or does not provide a working mechanism for resi13 dents of a secondary State, and the issuer is offering cov14 erage under this part in such secondary State which has 

15 not adopted a qualified high risk pool as its acceptable 

16 alternative mechanism (as defined in section 2744(c)(2)), 

17 the issuer shall, with respect to any individual or group 

18 health insurance coverage offered in a secondary State 

19 under this part, comply with the guaranteed availability 

20 requirements for eligible individuals in section 2741. 

21 ‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 

22 BEFORE ISSUER MAY SELL INTO SECONDARY 

23 STATES. 

24 ‘‘A health insurance issuer may not offer, sell, or 

25 issue individual or group health insurance coverage in a 


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1 secondary State if the State insurance commissioner does 

2 not use a risk-based capital formula for the determination 

3 of capital and surplus requirements for all health insur4 ance issuers. 

5 ‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE6 DURES. 

7 ‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur8 ance issuer may not offer, sell, or issue individual or group 

9 health insurance coverage in a secondary State under the 

10 provisions of this title unless— 

11 ‘‘(1) both the secondary State and the primary 

12 State have legislation or regulations in place estab13 lishing an independent review process for individuals 

14 who are covered by individual health insurance cov15 erage or group health insurance offered by a health 

16 insurance issuer, respectively, or 

17 ‘‘(2) in any case in which the requirements of 

18 subparagraph (A) are not met with respect to the ei19 ther of such States, the issuer provides an inde20 pendent review mechanism substantially identical (as 

21 determined by the applicable State authority of such 

22 State) to that prescribed in the ‘Health Carrier Ex23 ternal Review Model Act’ of the National Association 

24 of Insurance Commissioners for all individuals who 

25 purchase insurance coverage under the terms of this 


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1 part, except that, under such mechanism, the review 

2 is conducted by an independent medical reviewer, or 

3 a panel of such reviewers, with respect to whom the 

4 requirements of subsection (b) are met. 

5 ‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL

6 REVIEWERS.—In the case of any independent review 

7 mechanism referred to in subsection (a)(2): 

8 ‘‘(1) IN GENERAL.—In referring a denial of a 

9 claim to an independent medical reviewer, or to any 

10 panel of such reviewers, to conduct independent 

11 medical review, the issuer shall ensure that— 

12 ‘‘(A) each independent medical reviewer 

13 meets the qualifications described in paragraphs 

14 (2) and (3); 

15 ‘‘(B) with respect to each review, each re16 viewer meets the requirements of paragraph (4) 

17 and the reviewer, or at least 1 reviewer on the 

18 panel, meets the requirements described in 

19 paragraph (5); and 

20 ‘‘(C) compensation provided by the issuer 

21 to each reviewer is consistent with paragraph 

22 (6). 

23 ‘‘(2) LICENSURE AND EXPERTISE.—Each inde24 pendent medical reviewer shall be a physician 


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1 (allopathic or osteopathic) or health care profes2 sional who— 

3 ‘‘(A) is appropriately credentialed or li4 censed in 1 or more States to deliver health 

5 care services; and 

6 ‘‘(B) typically treats the condition, makes 

7 the diagnosis, or provides the type of treatment 

8 under review. 

9 ‘‘(3) INDEPENDENCE.— 

10 ‘‘(A) IN GENERAL.—Subject to subpara11 graph (B), each independent medical reviewer 

12 in a case shall— 

13 ‘‘(i) not be a related party (as defined 

14 in paragraph (7)); 

15 ‘‘(ii) not have a material familial, fi16 nancial, or professional relationship with 

17 such a party; and 

18 ‘‘(iii) not otherwise have a conflict of 

19 interest with such a party (as determined 

20 under regulations). 

21 ‘‘(B) EXCEPTION.—Nothing in subpara22 graph (A) shall be construed to— 

23 ‘‘(i) prohibit an individual, solely on 

24 the basis of affiliation with the issuer, 


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1 from serving as an independent medical re2 viewer if— 

3 ‘‘(I) a non-affiliated individual is 

4 not reasonably available; 

5 ‘‘(II) the affiliated individual is 

6 not involved in the provision of items 

7 or services in the case under review; 

8 ‘‘(III) the fact of such an affili9 ation is disclosed to the issuer and the 

10 enrollee (or authorized representative) 

11 and neither party objects; and 

12 ‘‘(IV) the affiliated individual is 

13 not an employee of the issuer and 

14 does not provide services exclusively or 

15 primarily to or on behalf of the issuer; 

16 ‘‘(ii) prohibit an individual who has 

17 staff privileges at the institution where the 

18 treatment involved takes place from serv19 ing as an independent medical reviewer 

20 merely on the basis of such affiliation if 

21 the affiliation is disclosed to the issuer and 

22 the enrollee (or authorized representative), 

23 and neither party objects; or 

24 ‘‘(iii) prohibit receipt of compensation 

25 by an independent medical reviewer from 


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1 an entity if the compensation is provided 

2 consistent with paragraph (6). 

3 ‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL

4 IN SAME FIELD.— 

5 ‘‘(A) IN GENERAL.—In a case involving 

6 treatment, or the provision of items or serv7 ices— 

8 ‘‘(i) by a physician, a reviewer shall be 

9 a practicing physician (allopathic or osteo10 pathic) of the same or similar specialty, as 

11 a physician who, acting within the appro12 priate scope of practice within the State in 

13 which the service is provided or rendered, 

14 typically treats the condition, makes the 

15 diagnosis, or provides the type of treat16 ment under review; or 

17 ‘‘(ii) by a non-physician health care 

18 professional, the reviewer, or at least 1 

19 member of the review panel, shall be a 

20 practicing non-physician health care pro21 fessional of the same or similar specialty 

22 as the non-physician health care profes23 sional who, acting within the appropriate 

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1 cally treats the condition, makes the diag2 nosis, or provides the type of treatment 

3 under review. 

4 ‘‘(B) PRACTICING DEFINED.—For pur5 poses of this paragraph, the term ‘practicing’ 

6 means, with respect to an individual who is a 

7 physician or other health care professional, that 

8 the individual provides health care services to 

9 individual patients on average at least 2 days 

10 per week. 

11 ‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 

12 external review relating to a child, a reviewer shall 

13 have expertise under paragraph (2) in pediatrics. 

14 ‘‘(6) LIMITATIONS ON REVIEWER COMPENSA15 TION.—Compensation provided by the issuer to an 

16 independent medical reviewer in connection with a 

17 review under this section shall— 

18 ‘‘(A) not exceed a reasonable level; and 

19 ‘‘(B) not be contingent on the decision ren20 dered by the reviewer. 

21 ‘‘(7) RELATED PARTY DEFINED.—For purposes 

22 of this section, the term ‘related party’ means, with 

23 respect to a denial of a claim under a coverage relat24 ing to an enrollee, any of the following: 


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1 ‘‘(A) The issuer involved, or any fiduciary, 

2 officer, director, or employee of the issuer. 

3 ‘‘(B) The enrollee (or authorized represent4 ative). 

5 ‘‘(C) The health care professional that pro6 vides the items or services involved in the de7 nial. 

8 ‘‘(D) The institution at which the items or 

9 services (or treatment) involved in the denial 

10 are provided. 

11 ‘‘(E) The manufacturer of any drug or 

12 other item that is included in the items or serv13 ices involved in the denial. 

14 ‘‘(F) Any other party determined under 

15 any regulations to have a substantial interest in 

16 the denial involved. 

17 ‘‘(8) DEFINITIONS.—For purposes of this sub18 section: 

19 ‘‘(A) ENROLLEE.—The term ‘enrollee’ 

20 means, with respect to health insurance cov21 erage offered by a health insurance issuer, an 

22 individual enrolled with the issuer to receive 

23 such coverage. 

24 ‘‘(B) HEALTH CARE PROFESSIONAL.—The 

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1 vidual who is licensed, accredited, or certified 

2 under State law to provide specified health care 

3 services and who is operating within the scope 

4 of such licensure, accreditation, or certification. 

5 ‘‘SEC. 2799. ENFORCEMENT. 

6 ‘‘(a) IN GENERAL.—Subject to subsection (b), with 

7 respect to specific individual or group health insurance 

8 coverage the primary State for such coverage has sole ju9 risdiction to enforce the primary State’s covered laws in 

10 the primary State and any secondary State. 

11 ‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 

12 subsection (a) shall be construed to affect the authority 

13 of a secondary State to enforce its laws as set forth in 

14 the exception specified in section 2796(b)(1). 

15 ‘‘(c) COURT INTERPRETATION.—In reviewing action 

16 initiated by the applicable secondary State authority, the 

17 court of competent jurisdiction shall apply the covered 

18 laws of the primary State. 

19 ‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 

20 of individual health insurance coverage offered in a sec21 ondary State, or group health insurance coveraged offered 

22 by a health insurance issuer in a secondary State, that 

23 fails to comply with the covered laws of the primary State, 

24 the applicable State authority of the secondary State may 


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1 notify the applicable State authority of the primary 

2 State.’’. 

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

4 subsection (a) shall apply to health insurance coverage of5 fered, issued, or sold after the date that is one year after 

6 the date of the enactment of this Act. 

7 (c) GAO ONGOING STUDY AND REPORTS.— 

8 (1) STUDY.—The Comptroller General of the 

9 United States shall conduct an ongoing study con10 cerning the effect of the amendment made by sub11 section (a) on— 

12 (A) the number of uninsured and under-in13 sured; 

14 (B) the availability and cost of health in15 surance policies for individuals with pre-existing 

16 medical conditions; 

17 (C) the availability and cost of health in18 surance policies generally; 

19 (D) the elimination or reduction of dif20 ferent types of benefits under health insurance 

21 policies offered in different States; and 

22 (E) cases of fraud or abuse relating to 

23 health insurance coverage offered under such 

24 amendment and the resolution of such cases. 


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1 (2) ANNUAL REPORTS.—The Comptroller Gen2 eral shall submit to Congress an annual report, after 

3 the end of each of the 5 years following the effective 

4 date of the amendment made by subsection (a), on 

5 the ongoing study conducted under paragraph (1). 

6 SEC. 502. CONTINUING STATE AUTHORITY. 

7 Nothing in this title, or the amendments made by this 

8 title, shall be construed as preventing a State— 

9 (1) from permitting residents of the State to 

10 purchase of health insurance offered by a health in11 surance issuer located outside the State; or 

12 (2) from permitting groups to directly obtain, 

13 through an association health plan or otherwise, 

14 health insurance coverage for their members. 

15 TITLE VI—STATE HEALTH 

16 FLEXIBILITY 

17 SEC. 601. SHORT TITLE. 

18 This title may be cited as the ‘‘State Health Flexi19 bility Act of 2013’’. 

20 SEC. 602. HEALTH GRANTS TO THE STATES FOR HEALTH 

21 CARE SERVICES TO INDIGENT INDIVIDUALS. 

22 (a) HEALTH CARE BLOCK GRANT TO STATES.—The 

23 Social Security Act is amended by adding at the end the 

24 following new title: 


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1 ‘‘TITLE XXII—BLOCK GRANTS TO 

2 STATES FOR HEALTH CARE 

3 SERVICES TO INDIGENT INDI4 VIDUALS 

5 ‘‘SEC. 2201. PURPOSE. 

6 ‘‘The purpose of this title is to provide Federal finan7 cial assistance to the States, in the form of a single grant, 

8 to allow the States maximum flexibility in providing, and 

9 financing the provision of, health-care-related items and 

10 services to indigent individuals. 

11 ‘‘SEC. 2202. GRANTS TO STATES. 

12 ‘‘(a) IN GENERAL.—Subject to the requirements of 

13 this title, each State is entitled to receive from the Sec14 retary of the Treasury a grant for each quarter of fiscal 

15 years 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 

16 2022, and 2023, in an amount that is equal to 25 percent 

17 of the total amount received by a State under title XIX 

18 and title XXI for fiscal year 2012. 

19 ‘‘(b) APPROPRIATION.—Out of any money in the 

20 Treasury of the United States not otherwise appropriated, 

21 there are appropriated for fiscal years 2014, 2015, 2016, 

22 2017, 2018, 2019, 2020, 2021, 2022, and 2023 such sums 

23 as are necessary for grants under this section. 

24 ‘‘(c) REQUIREMENTS RELATING TO INTERGOVERN25 MENTAL FINANCING.—The Secretary of the Treasury 


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1 shall make the transfer of funds under grants under sub2 section (a) directly to each State in accordance with the 

3 requirements of section 6503 of title 31, United States 

4 Code. 

5 ‘‘(d) EXPENDITURE OF FUNDS.— 

6 ‘‘(1) IN GENERAL.—Except as provided in para7 graph (2), amounts received by a State under this 

8 title for any fiscal year shall be expended by the 

9 State in such fiscal year or in the succeeding fiscal 

10 year. 

11 ‘‘(2) USE OF RAINY DAY FUND PERMITTED.— 

12 Of the amounts received by a State under this title, 

13 the State may set aside, in a separate account, such 

14 amounts as the State deems necessary to provide, 

15 without fiscal limitation, health-care-related items 

16 and services for indigent individuals during— 

17 ‘‘(A) periods of unexpectedly high rates of 

18 unemployment; or 

19 ‘‘(B) periods related to circumstances that 

20 are not described in subparagraph (A) and that 

21 cause unexpected increases in the need for such 

22 items and services for such individuals. 

23 ‘‘(3) FUNDS REMAINING AFTER FISCAL YEAR

24 2022.—If, after fiscal year 2023, a State has funds 

25 in the account under paragraph (2), the State may 


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1 only expend such funds if such funds are used in a 

2 manner that is permitted under subsection (e), as 

3 such subsection is in effect on September 30, 2023. 

4 ‘‘(e) USE OF FUNDS.—A State may only use the 

5 amounts received under subsection (a) as follows: 

6 ‘‘(1) GENERAL PURPOSE.—For the purpose 

7 under section 2201, including the provision of 

8 health-care-related items and services as required 

9 under section 2205. Nothing in this title shall be 

10 construed as limiting the flexibility of a State to de11 termine which providers of such items and services 

12 qualify to receive payment from a grant made to the 

13 State under this title. 

14 ‘‘(2) FUNDING FOR RISK ADJUSTMENT MECHA15 NISMS.—To fund qualified high risk pools, reinsur16 ance pools, or other risk-adjustment mechanisms 

17 used for the purpose of subsidizing the purchase of 

18 private health insurance for the high-risk population. 

19 ‘‘(3) AUTHORITY TO USE PORTION OF FEDERAL

20 ASSISTANCE FOR OTHER WELFARE-RELATED PRO21 GRAMS.— 

22 ‘‘(A) IN GENERAL.—Subject to the limit 

23 under subparagraph (B), to carry out a State 

24 program pursuant to any or all of the following 

25 provisions of law: 


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1 ‘‘(i) Part A of title IV of this Act. 

2 ‘‘(ii) Section 1616 of this Act. 

3 ‘‘(iii) The Food and Nutrition Act of 

4 2008. 

5 ‘‘(B) LIMITATION.—A State may not use 

6 more than 30 percent of the amount received 

7 under subsection (a) for a fiscal year to carry 

8 out a State program, or programs, under sub9 paragraph (A). 

10 ‘‘(C) REQUIREMENTS ON FUNDS.—Any 

11 amounts that are used under subparagraph 

12 (A)— 

13 ‘‘(i) shall not be subject to any of the 

14 requirements of subsection (d), subsection 

15 (f), section 2204, or section 2205; and 

16 ‘‘(ii) shall be subject to— 

17 ‘‘(I) the audit requirements 

18 under section 2203; and 

19 ‘‘(II) any requirements that 

20 apply to Federal funds provided di21 rectly for such State program. 

22 ‘‘(f) MAINTENANCE OF CURRENT LAW RESTRIC23 TIONS ON USE OF FEDERAL FUNDS.— 

24 ‘‘(1) IN GENERAL.— 


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1 ‘‘(A) NO FUNDING FOR ABORTIONS.— 

2 None of the funds appropriated in this title 

3 shall be expended for any abortion. 

4 ‘‘(B) NO FUNDS FOR COVERAGE OF ABOR5 TION.—None of the funds appropriated in this 

6 title shall be expended for health benefits cov7 erage that includes coverage of abortion. 

8 ‘‘(C) HEALTH BENEFITS COVERAGE DE9 FINED.—For purposes of this subsection, the 

10 term ‘health benefits coverage’ means the pack11 age of services covered by a managed care pro12 vider or organization pursuant to a contract or 

13 other arrangement. 

14 ‘‘(2) EXCEPTIONS.—The limitations established 

15 in paragraph (1) shall not apply to an abortion in 

16 the case where a woman suffers from a physical dis17 order, physical injury, or physical illness that would, 

18 as certified by a physician, place the woman in dan19 ger of death unless an abortion is performed, includ20 ing a life-endangering physical condition caused by 

21 or arising from the pregnancy itself. 

22 ‘‘(3) STATE FUNDS USED IN CONJUNCTION

23 WITH FEDERAL FUNDS.—The limitations established 

24 in paragraph (1) shall apply to any State funds used 

25 in conjunction with Federal funds appropriated 


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1 under this title to provide, or finance the provision 

2 of, health-care-related items and services to indigent 

3 individuals pursuant to section 2201 or subsections 

4 (d)(2), (e)(1), or (e)(2) of this section. 

5 ‘‘(4) OPTION TO PURCHASE SEPARATE COV6 ERAGE OR PLAN.—Nothing in this subsection shall 

7 be construed as prohibiting a State from purchasing 

8 separate coverage for abortions for which funding is 

9 prohibited under this subsection, or a health plan 

10 that includes such abortions, so long as such cov11 erage or plan is paid for entirely using funds not 

12 provided by this title. 

13 ‘‘(5) OPTION TO OFFER COVERAGE OR PLAN.— 

14 Nothing in this subsection shall restrict any health 

15 insurance issuer from offering separate coverage for 

16 abortions for which funding is prohibited under this 

17 subsection, or a health plan that includes such abor18 tions, so long as— 

19 ‘‘(A) premiums for such separate coverage 

20 or plan are paid entirely with funds not pro21 vided by this title; and 

22 ‘‘(B) administrative costs and all services 

23 offered through such separate coverage or plan 

24 are paid for using only premiums collected for 

25 such coverage or plan. 


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1 ‘‘(6) CONSCIENCE PROTECTIONS.— 

2 ‘‘(A) None of the funds appropriated in 

3 this Act may be made available to a Federal 

4 agency or program, or to a State or local gov5 ernment, if such agency, program, or govern6 ment subjects any institutional or individual 

7 health care entity to discrimination on the basis 

8 that the health care entity does not provide, pay 

9 for, provide coverage of, or refer for abortions. 

10 ‘‘(B) In this paragraph, the term ‘health 

11 care entity’ includes an individual physician, 

12 pharmacist, or other health care professional, a 

13 hospital, a provider-sponsored organization, a 

14 health maintenance organization, a health in15 surance plan, or any other kind of health care 

16 facility, organization, or plan. 

17 ‘‘(g) NO FUNDING FOR ILLEGAL ALIENS.—Except as 

18 provided under this section and section 2205, no funds 

19 appropriated in this title may be used to provide health20 care-related items and services to an alien who is not law21 fully admitted for permanent residence or otherwise per22 manently residing in the United States under color of law. 

23 ‘‘(h) NONENTITLEMENT.—Nothing in this title shall 

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1 ment to health-care-related items and services under this 

2 title. 

3 ‘‘SEC. 2203. ADMINISTRATIVE AND FISCAL ACCOUNT4 ABILITY. 

5 ‘‘(a) AUDITS.— 

6 ‘‘(1) CONTRACT WITH APPROVED AUDITING EN7 TITY.—Not later than October 1, 2014, and annu8 ally thereafter, a State shall contract with an ap9 proved auditing entity (as defined under paragraph 

10 (3)(B)) for purposes of conducting an audit under 

11 paragraph (2) (with respect to the fiscal year ending 

12 September 30 of such year). 

13 ‘‘(2) AUDIT REQUIREMENT.—Under a contract 

14 under paragraph (1), an approved auditing entity 

15 shall conduct an audit of the expenditures or trans16 fers made by a State from amounts received under 

17 a grant under this title, or from State funds de18 scribed in section 2202(f)(3), with respect to the fis19 cal year which such audit covers, to determine the 

20 extent to which such expenditures and transfers 

21 were expended in accordance with this title. 

22 ‘‘(3) ENTITY CONDUCTING AUDIT.— 

23 ‘‘(A) IN GENERAL.—With respect to a 

24 State, the audit under paragraph (2) shall be 

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1 cordance with generally accepted auditing prin2 ciples. 

3 ‘‘(B) APPROVED AUDITING ENTITY.—For 

4 purposes of this section, the term ‘approved au5 diting entity’ means, with respect to a State, an 

6 entity that is— 

7 ‘‘(i) approved by the Secretary of the 

8 Treasury; 

9 ‘‘(ii) approved by the chief executive 

10 officer of the State; and 

11 ‘‘(iii) independent of any Federal, 

12 State, or local agency. 

13 ‘‘(4) SUBMISSION OF AUDIT.—Not later than 

14 December 31, 2014, and annually thereafter, a State 

15 shall submit the results of the audit under para16 graph (2) (with respect to the fiscal year ending on 

17 September 30 of such year) to the State legislature 

18 and to the Secretary of the Treasury. 

19 ‘‘(5) ADDITIONAL ACCOUNTING REQUIRE20 MENTS.—The provisions of chapter 75 of title 31, 

21 United States Code, shall apply to the audit require22 ments of this section. 

23 ‘‘(b) REIMBURSEMENT AND PENALTY.— 

24 ‘‘(1) IN GENERAL.—If, through an audit con25 ducted under subsection (a), an approved auditing 


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1 entity finds that any amounts paid to a State under 

2 a grant under this title were not expended in accord3 ance with this title— 

4 ‘‘(A) the State shall pay to the Treasury of 

5 the United States any such amount, plus 10 

6 percent of such amount as a penalty; or 

7 ‘‘(B) the Secretary of the Treasury shall 

8 offset such amount plus the 10 percent penalty 

9 against any other amount in any other fiscal 

10 year that the State may be entitled to receive 

11 under a grant under this title. 

12 ‘‘(2) MISUSE OF STATE FUNDS.—If, through an 

13 audit conducted under subsection (a), an approved 

14 auditing entity finds that a State violated the re15 quirements of section 2202(f)(3), the State shall pay 

16 to the Treasury of the United States 100 percent of 

17 the amount of State funds that were used in viola18 tion of section 2202(f)(3) as a penalty. Insofar as a 

19 State fails to pay any such penalty, the Secretary of 

20 the Treasury shall offset the amount not so paid 

21 against the amount of any grant otherwise payable 

22 to the State under this title. 

23 ‘‘(c) ANNUAL REPORTING REQUIREMENTS.— 

24 ‘‘(1) IN GENERAL.—Not later than January 31, 

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1 mit to the Secretary of the Treasury and the State 

2 legislature a report on the activities carried out by 

3 the State during the most recently completed fiscal 

4 year with funds received by the State under a grant 

5 under this title for such fiscal year. 

6 ‘‘(2) CONTENT.—A report under paragraph (1) 

7 shall, with respect to a fiscal year— 

8 ‘‘(A) contain the results of the audit con9 ducted by an approved auditing entity for a 

10 State for such fiscal year, in accordance with 

11 the requirements of subsection (a) of this sec12 tion; 

13 ‘‘(B) specify the amount of the grant made 

14 to the State under this title that is used to 

15 carry out a program under section 2202(e)(3); 

16 and 

17 ‘‘(C) be in such form and contain such 

18 other information as the State determines is 

19 necessary to provide— 

20 ‘‘(i) an accurate description of the ac21 tivities conducted by the State for the pur22 pose described under section 2201 and any 

23 other use of funds permitted under sub24 sections (d) and (e) of section 2202; and 


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1 ‘‘(ii) a complete record of the pur2 poses for which amounts were expended in 

3 accordance with this title. 

4 ‘‘(3) CONFORMITY WITH ACCOUNTING PRIN5 CIPALS.—Any financial information in the report 

6 under paragraph (1) shall be prepared and reported 

7 in accordance with generally accepted accounting 

8 principles, including the provisions of chapter 75 of 

9 title 31, United States Code. 

10 ‘‘(4) PUBLIC AVAILABILITY.—A State shall 

11 make copies of the reports required under this sec12 tion available on a public Web site and shall make 

13 copies available in other formats upon request. 

14 ‘‘(d) FAILURE TO COMPLY WITH REQUIREMENTS.— 

15 The Secretary of the Treasury shall not make any pay16 ment to a State under a grant authorized by section 

17 2202(a)— 

18 ‘‘(1) if an audit for a State is not submitted as 

19 required under subsection (a), during the period be20 tween the date such audit is due and the date on 

21 which such audit is submitted; 

22 ‘‘(2) if a State fails to submit a report as re23 quired under subsection (c), during the period be24 tween the date such report is due and the date on 

25 which such report is submitted; or 


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1 ‘‘(3) if a State violates a requirement of section 

2 2202(f), during the period beginning on the date the 

3 Secretary becomes aware of such violation and the 

4 date on which such violation is corrected by the 

5 State. 

6 ‘‘(e) ADMINISTRATIVE SUPERVISION AND OVER7 SIGHT.— 

8 ‘‘(1) LIMITED ROLE FOR SECRETARY OF TREAS9 URY AND THE ATTORNEY GENERAL.— 

10 ‘‘(A) TREASURY.—The authority of the 

11 Secretary of the Treasury under this title is 

12 limited to— 

13 ‘‘(i) promulgating regulations, issuing 

14 rules, or publishing guidance documents to 

15 the extent necessary for purposes of imple16 menting subsection (a)(3)(B), subsection 

17 (b), and subsection (d); 

18 ‘‘(ii) making quarterly payments to 

19 the States under grants under this title in 

20 accordance with section 2202(a); 

21 ‘‘(iii) approving entities under sub22 section (a)(3)(B) for purposes of the audits 

23 required under subsection (a); 

24 ‘‘(iv) withholding payment to a State 

25 of a grant under subsection (d) or offsetVerDate Mar 15 2010 02:33 Aug 06, 2013 Jkt 029200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\H2900.IH H2900

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1 ting a payment of such a grant to a State 

2 under subsection (b); and 

3 ‘‘(v) exercising the authority relating 

4 to nondiscrimination that is specified in 

5 section 2204(b). 

6 ‘‘(B) ATTORNEY GENERAL.—The authority 

7 of the Attorney General to supervise the 

8 amounts received by a State under this title is 

9 limited to the authority under section 2204(c). 

10 ‘‘(2) FEDERAL SUPERVISION.— 

11 ‘‘(A) IN GENERAL.—Except as provided 

12 under paragraph (1), an administrative officer, 

13 employee, department, or agency of the United 

14 States (including the Secretary of Health and 

15 Human Services) may not— 

16 ‘‘(i) supervise— 

17 ‘‘(I) the amounts received by the 

18 States under this title; or 

19 ‘‘(II) the use of such amounts by 

20 the States; or 

21 ‘‘(ii) promulgate regulations or issue 

22 rules in accordance with this title. 

23 ‘‘(B) LIMITATION ON SECRETARY OF

24 HEALTH AND HUMAN SERVICES.—The Sec25 retary of Health and Human Services shall 


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1 have no authority over any provision of this 

2 title. 

3 ‘‘(f) RESERVATION OF STATE POWERS.—Nothing in 

4 this section shall be construed to limit the power of a 

5 State, including the power of a State to pursue civil and 

6 criminal penalties under State law against any individual 

7 or entity that misuses, or engages in fraud or abuse re8 lated to, the funds provided to a State under this title. 

9 ‘‘SEC. 2204. NONDISCRIMINATION PROVISIONS. 

10 ‘‘(a) NO DISCRIMINATION AGAINST INDIVIDUALS.— 

11 No individual shall be excluded from participation in, de12 nied the benefits of, or subjected to discrimination under, 

13 any program or activity funded in whole or in part with 

14 amounts paid to a State under this title on the basis of 

15 such individual’s— 

16 ‘‘(1) disability under section 504 of the Reha17 bilitation Act of 1973 (29 U.S.C. 794); 

18 ‘‘(2) sex under title IX of the Education 

19 Amendments of 1972 (20 U.S.C. 1681 et seq.); or 

20 ‘‘(3) race, color, or national origin under title 

21 VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d 

22 et seq.). 

23 ‘‘(b) COMPLIANCE.— 

24 ‘‘(1) If the Secretary of the Treasury deter25 mines that a State or an entity that has received 


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1 funds from amounts paid to a State under a grant 

2 under this title has failed to comply with a provision 

3 of law referred to in subsection (a), the Secretary of 

4 the Treasury shall notify the chief executive officer 

5 of the State of such failure to comply and shall re6 quest that such chief executive officer secure such 

7 compliance. 

8 ‘‘(2) If, not later than 60 days after receiving 

9 notification under paragraph (1), the chief executive 

10 officer of a State fails or refuses to secure compli11 ance with the provision of law referred to in such 

12 notification, the Secretary of the Treasury may— 

13 ‘‘(A) refer the matter to the Attorney Gen14 eral with a recommendation that an appropriate 

15 civil action be instituted; or 

16 ‘‘(B) exercise the powers and functions 

17 provided under section 505 of the Rehabilita18 tion Act of 1973 (29 U.S.C. 794a), title IX of 

19 the Education Amendments of 1972 (20 U.S.C. 

20 1681 et seq.), or title VI of the Civil Rights Act 

21 of 1964 (42 U.S.C. 2000d et seq.) (as applica22 ble). 

23 ‘‘(c) CIVIL ACTIONS.—If a matter is referred to the 

24 Attorney General under subsection (b)(2)(A), or the At25 torney General has reason to believe that a State or entity 


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1 has failed to comply with a provision of law referred to 

2 in subsection (a), the Attorney General may bring a civil 

3 action in an appropriate district court of the United States 

4 for such relief as may be appropriate, including injunctive 

5 relief. 

6 ‘‘SEC. 2205. EMERGENCY ASSISTANCE. 

7 ‘‘(a) IN GENERAL.—A State that receives a grant 

8 under this title for a fiscal year shall provide payment for 

9 health-care-related items and services provided to a cit10 izen, legal resident, or an alien who is not lawfully admit11 ted for permanent residence or otherwise permanently re12 siding in the United States under color of law, consistent 

13 with the requirements of section 1867, if— 

14 ‘‘(1) such health-care-related items and services 

15 are— 

16 ‘‘(A) necessary for the treatment of an 

17 emergency medical condition; and 

18 ‘‘(B) health-care-related items and services 

19 that such State would provide payment for 

20 under this title, if provided to an indigent indi21 vidual; 

22 ‘‘(2) the individual meets all necessary eligi23 bility requirements for health-care-related items and 

24 services under the State program funded under this 


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1 title, except for any requirement related to immigra2 tion status; and 

3 ‘‘(3) such items and services are not related to 

4 an organ transplant procedure. 

5 ‘‘(b) EMERGENCY MEDICAL CONDITION.—For pur6 poses of this section, the term ‘emergency medical condi7 tion’ means a medical condition (including emergency 

8 labor and delivery) manifesting itself by acute symptoms 

9 of sufficient severity (including severe pain) such that the 

10 absence of immediate medical attention could reasonably 

11 be expected to result in— 

12 ‘‘(1) placing the patient’s health in serious jeop13 ardy; 

14 ‘‘(2) serious impairment to bodily functions; or 

15 ‘‘(3) serious dysfunction of any bodily organ or 

16 part. 

17 ‘‘SEC. 2206. DEFINITIONS. 

18 ‘‘For purposes of this title: 

19 ‘‘(1) HEALTH-CARE-RELATED ITEMS AND SERV20 ICES.—The term ‘health-care-related items and serv21 ices’ shall be defined by a State with respect to use 

22 of such term for purposes of the application of this 

23 title to the State. 


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1 ‘‘(2) HIGH-RISK POPULATION.—The term ‘high2 risk population’ means individuals who are described 

3 in one of the following subparagraphs: 

4 ‘‘(A) Individuals who, by reason of the ex5 istence or history of a medical condition, are 

6 able to acquire health coverage only at rates 

7 which are at least 150 percent of the standard 

8 risk rates for such coverage. 

9 ‘‘(B) Individuals who are provided health 

10 coverage by a qualified high risk pool. 

11 ‘‘(3) INDIGENT INDIVIDUAL.—The term ‘indi12 gent individual’ shall be defined by a State with re13 spect to use of such term for purposes of the appli14 cation of this title to the State. 

15 ‘‘(4) QUALIFIED HIGH RISK POOL.—The term 

16 ‘qualified high risk pool’ has the meaning given such 

17 term in section 2745(g)(1)(A) of the Public Health 

18 Service Act. 

19 ‘‘(5) RISK-ADJUSTMENT MECHANISM DE20 FINED.—For purposes of this section, the term 

21 ‘risk-adjustment mechanism’ means any risk-spread22 ing mechanism to subsidize the purchase of private 

23 health insurance for the high-risk population, includ24 ing a qualified high risk pool.’’. 


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1 (b) REPORT ON REDUCTION OF FEDERAL ADMINIS2 TRATIVE EXPENDITURES.—Beginning not later than Oc3 tober 31, 2014, and annually thereafter until October 31, 

4 2023, the Secretary of Health and Human Services, in 

5 consultation with the Secretary of the Treasury, shall sub6 mit a report to the Committee on Energy and Commerce 

7 in the House of Representatives and the Finance Com8 mittee in the Senate containing a description of the total 

9 reduction in Federal expenditures required to administer 

10 and provide oversight for the programs to provide health11 care-related items and services to indigent individuals 

12 under this Act, compared to the expenditures required to 

13 administer and provide oversight for the programs under 

14 titles XIX and XXI of the Social Security Act, as in effect 

15 on September 30, 2012. 

16 (c) STATE DEFINED.—Section 1101(a)(1) of the So17 cial Security Act (42 U.S.C. 1301(a)(1)) is amended— 

18 (1) in the first sentence, by striking ‘‘and XXI’’ 

19 and inserting ‘‘XXI, and XXII’’; and 

20 (2) in the fourth sentence, by striking ‘‘and 

21 XXI’’ and inserting ‘‘, XXI, and XXII’’. 

22 SEC. 603. REPEAL OF FEDERAL REQUIREMENTS OF MED23 ICAID AND CHIP. 

24 Titles XIX and XXI of the Social Security Act are 

25 repealed. 


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1 SEC. 604. SEVERABILITY. 

2 If any provision of this title, or the application of 

3 such provision to any person or circumstance, is found to 

4 be unconstitutional, the remainder of this title, or the ap5 plication of that provision to other persons or cir6 cumstances, shall not be affected. 

7 SEC. 605. EFFECTIVE DATE. 

8 This title and the amendments made by this title 

9 shall take effect with respect to items and services fur10 nished on or after October 1, 2013. 

Æ 


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